Representative Proposal for Amendments to the "Housing Lease Protection Act" and the "Special Act on Private Rental Housing"
Rep. Kim Hoe-jae Urges Legal Revisions to Prevent Additional Hardships for Low-Income Citizens
[Yeosu=Asia Economy Honam Reporting Headquarters Reporter Choi Cheol-hoon] Kim Hoe-jae, a member of the Democratic Party of Korea (Jeonnam Yeosu-si Eul), announced on the 8th that he has taken the lead in proposing amendments to the 「Housing Lease Protection Act」 and the 「Special Act on Private Rental Housing」 to prevent jeonse fraud.
The amendment to the 「Housing Lease Protection Act」 proposed by Representative Kim stipulates that once the move-in report is filed, the tenant immediately gains opposability against third parties, and if a fixed date is obtained on the lease contract certificate, the tenant is recognized with a priority right to repayment of the lease deposit claim.
The current Housing Lease Protection Act states that once the move-in report is filed and a fixed date is obtained on the lease contract, opposability arises, granting the tenant the right to priority repayment of the deposit. However, jeonse fraud exploiting the fact that opposability arises not on the same day but from 0:00 the next day is rampant.
If the landlord takes out a loan secured by the house and registers a mortgage on the same day the move-in report is filed, the tenant’s jeonse deposit is subordinated by just one day.
Additionally, Representative Kim introduced a provision requiring that the order of precedence between the move-in report and registration be verified, and that the contents of the move-in report be sent to the competent district court to ensure that the rights of mortgage holders are not infringed.
Through the amendment to the 「Special Act on Private Rental Housing」, Representative Kim also strengthened regulations against bad landlords who do not return deposits.
Under current law, if a rental business operator does not return the deposit to the tenant, their qualification as a rental business operator is revoked; however, if the Housing and Urban Guarantee Corporation (HUG) performs the debt on behalf of the rental business operator under the Jeonse Deposit Return Guarantee System, the qualification is not revoked.
According to HUG, 61% of bad landlords maintain their rental business operator qualifications by exploiting legal blind spots.
Accordingly, Representative Kim proposed an amendment to the 「Special Act on Private Rental Housing」 to allow the revocation of rental business operator qualifications even when the guarantee company fulfills the guarantee obligation due to the rental business operator’s failure to return the deposit, and to prevent additional guarantees from being issued to such landlords if they have debts to the guarantee company.
Representative Kim Hoe-jae said, “A significant portion of recent jeonse fraud cases occur by cleverly exploiting institutional shortcomings,” and added, “The law must be amended swiftly to prevent further damage to ordinary citizens.”
Yeosu=Asia Economy Honam Reporting Headquarters Reporter Choi Cheol-hoon hss79@asiae.co.kr
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