One Year Since New Lease Law Enforcement... Frontline Conflicts Persist
Disputes Over Contract Renewal Rights Especially Frequent
Landlords Reverse Last Minute After Claiming Actual Residence
Tenants Asked to Sign Agreement "No Lawsuit Filed"
Tenants Also 'Hold Out' Against Landlords' Actual Residence Notices
A, who was living in apartment S in Tanbang-dong, Seo-gu, Daejeon on a jeonse lease, received a notice from the landlord last June stating, "My daughter needs to live here, so please vacate the house by the contract expiration in early August." Faced with this sudden notice of actual residence, A hurriedly found a new place to move into, albeit at a somewhat higher price. However, just before the moving day, the landlord changed their mind, saying, "I can no longer live here," and demanded, "I will give you 500,000 won, but please sign an agreement stating you will not file a compensation lawsuit." The jeonse price in this complex has risen by about 50 million won over two years. Although A was furious, he had no choice but to sign the agreement to get his deposit back and move into the new house. He lamented, "Even if it seems the landlord never intended to actually live here from the start, as a tenant, there is no way to verify this unless you file a lawsuit."
According to the real estate industry on the 11th, although it has been a year since the new lease law, including the right to request contract renewal and the cap on rent increases, was implemented, the frontline housing lease market is still experiencing confusion due to various tricks and conflicts. Contrary to the government's promise that the revised law would settle over time and stabilize the jeonse and monthly rent market, distrust and legal disputes between landlords and tenants are only increasing.
According to the Korea Legal Aid Corporation, the total number of consultations related to lease disputes submitted to the Housing Lease Dispute Mediation Committee increased by 37.9%, from 5,290 cases between January and July last year to 7,293 cases from August last year to June this year, after the law was enacted. In particular, conflicts between landlords and tenants over the right to request a two-year extension of the jeonse period are known to be significant. This is because there is a large legal blind spot regarding the landlord's actual residence requirement that nullifies the right to request contract renewal.
As in the case above, even if the landlord initially said they would live in the property but reversed their decision at the last minute, tenants who have already secured another jeonse house find it difficult to cancel their move. Tenants can claim compensation, but it is not easy to proceed with a lawsuit, and even if they do, the practical benefits may not be significant compared to the time and cost involved.
From the landlord's perspective, even if they are held liable for compensation in the worst case, accepting a new tenant and raising the rent to market rates is more profitable, so many landlords demand an agreement to discourage lawsuits or respond with an attitude of "go ahead and sue if you want."
Real estate specialist lawyer Eom Jeong-sook explained, "Even if an agreement is made not to file a compensation lawsuit, if the agreement is signed before the lease relationship ends, it is disadvantageous to the tenant and can be considered invalid, allowing the tenant to receive compensation. However, if the landlord intended to live in the property but had no choice but to rent it to another tenant due to unavoidable circumstances, they may not be held responsible."
On the other hand, tenants sometimes exploit loopholes in the right to request contract renewal to nullify the regulations. Online, there is a solution circulating that says, "Even if the landlord refuses to allow the exercise of the right to request contract renewal citing actual residence, you should not leave after the contract expires and must hold out." If the landlord falsely claims actual residence to raise the deposit, eviction lawsuits cannot be filed, and if not, the landlord must vacate the house if a lawsuit is actually filed. One tenant pointed out, "If you follow the law strictly, you become a fool in this world."
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