Prosecutor's Deferred Indictment for Misjudging Rental Business Status... Constitutional Court Orders "Cancel It"

"Whether a Rental Business Operator Applies Should Be Determined for Each Housing Unit"

The Constitutional Court annulled the prosecutor's suspension of indictment decision made on the charge of treating a person who is not a rental business operator under the Rental Housing Act as a rental business operator and failing to fulfill the obligation to subscribe to a rental guarantee.

This decision follows the existing stance of the Constitutional Court that whether a person qualifies as a rental business operator obligated to subscribe to a guarantee for rental deposits must be judged individually for each rental housing unit.

Constitutional Court Grand Bench.
Photo by Jinhyung Kang aymsdream@

On the 1st, the Constitutional Court announced that it unanimously accepted the constitutional complaint filed by Mr. Yoon, who claimed that the prosecutor's suspension of indictment decision by the Daegu District Prosecutors' Office Western Branch violated his constitutional rights to equality and the pursuit of happiness.

The Constitutional Court stated, "The suspension of indictment decision made by the respondent against the petitioner infringes upon the petitioner's rights to equality and the pursuit of happiness under the Constitution, and therefore it is annulled."

Mr. Yoon completed the registration as a rental business operator for Apartment A, Unit B, a rental apartment located in Chungju City, Chungbuk Province, on May 31, 2018. On June 8 of the same year, he purchased and registered another rental apartment in Gwangyang City, Jeonnam Province, but did not register as a rental business operator for that property.

The mayor of Gwangyang City sent a public notice to Mr. Yoon on January 21, 2019, stating that the rental housing purchased by Mr. Yoon is a public construction rental housing and that he must subscribe to a guarantee for the rental deposit according to the Rental Housing Act. The notice requested that he subscribe to the guarantee and submit a copy of the guarantee certificate by January 31 of the same year. The notice also included a warning that failure to subscribe to the guarantee would result in criminal punishment under the Rental Housing Act.

Despite receiving the notice, Mr. Yoon did not subscribe to the guarantee. Consequently, the mayor of Gwangyang City reported Mr. Yoon to the Gwangyang Police Station on February 18, 2019, for violating the Rental Housing Act. The prosecution, having received the case from the police, issued a suspension of indictment decision stating that although the criminal charges were recognized, prosecution would not proceed.

Mr. Yoon filed a constitutional complaint with the Constitutional Court, arguing that the prosecutor's suspension of indictment decision violated his fundamental rights. Unlike non-prosecution decisions such as 'not a crime' or 'no charges,' a suspension of indictment decision acknowledges the existence of criminal charges, allowing the accused to file a constitutional complaint with the Constitutional Court.

The Constitutional Court stated, "Whether a person is registered as a rental business operator must be judged individually for each housing unit. A person registered as a rental business operator for a rental housing unit cannot be considered to hold the status of a rental business operator for housing units not registered as rental housing."

As grounds, the Constitutional Court cited the following: ▲ Under the Rental Housing Act, a person applying for registration as a rental business operator must, in principle, submit the purchase contract for the housing intended for rental along with the application to the competent authority; ▲ The competent authority must verify the registration details certificate of the housing intended for rental; ▲ The application form prescribed by the Enforcement Rules of the Rental Housing Act requires the inclusion of details such as the 'location' and 'unit number' of the rental housing.

The Constitutional Court has expressed this position several times in previous cases.

The Court judged, "The petitioner registered as a rental business operator for another rental housing in Chungju City around May 2018, but there is no record confirming that he registered as a rental business operator for the rental housing in Gwangyang City at issue in this case. Therefore, the petitioner cannot be considered a rental business operator obligated to subscribe to a guarantee for rental deposits under the Rental Housing Act for the rental housing in this case."

Furthermore, the Court concluded, "Nevertheless, the suspension of indictment decision in this case recognizes the petitioner as a rental business operator obligated to subscribe to a guarantee for the rental housing in this case solely because he is registered as a rental business operator for another rental housing. This constitutes a misinterpretation of the law and infringes upon the petitioner's rights to equality and the pursuit of happiness."