Reporter Jung Da-eun, friendly economist. Reporter Jung, the details of the Rent 3 Act are coming out little by little, but how do they change specifically when tenants renew their contracts?


Yes. The Jeonwol rent market is tumbling as the legislation of the Lease 3 Act approaches.

Lease 3 Act refers to the rent lease report system, the rent lease system limit, and the right to apply for contract renewal.

There were several opinions as to how many times the tenant's contract renewal was guaranteed, but if the tenant wants, the proposal that allows the tenant to extend the contract once more after the initial two-year contract is influential.

From the tenant's point of view, they can live stably for up to four years. It was also suggested that the extension of the contract could be guaranteed twice to guarantee a total contract period of 6 years.

That's why elementary schools are six years old, and middle and high schools are three years each, helping tenants' families to go to school stably.

It is known that the government has decided to pass a one-time extension plan first to minimize market resistance.

So, if you have renewed your contract more than once before the law goes into effect, can't you exercise your right to apply for a contract?

Existing tenants will be able to exercise their renewal rights no matter how many times they extend the contract before the law takes effect.

However, if the landlord says he will go directly to the house where the rent was rented, he cannot exercise the right to renew the contract.

In this case, if the landlord does not live directly and lends it to someone else, the compensation system for compensation to existing tenants is also being considered.


Reporter Jung, if this law is passed, will there be restrictions on how the landlords will raise rent?


Yes. When renewing a contract, you will not be able to raise your rent more than 5%. The rate of increase may be set lower by the municipality.

In particular, in the metropolitan areas such as Seoul, where the rent to cheonsei rents are high, rent growth is expected to be lower than 5%. However, in the case of the monthly rent limit, it only applies when renewing an existing contract.

Therefore, when the landlord closes the existing contract and receives a new tenant, he is raising the rent that he has not been able to raise all at once. It means that every 4 years, not 2 years, the total set value can go up all at once.

So, even in the case of a new contract, a plan was proposed to limit the increase in rent, but the government withheld the decision to discuss the new contractor again if there were any side effects.

Even applying new contracts seems to be aware of the backlash that the landlord's property rights are infringed excessively.


I think the backlash from the landlord's position is going to be difficult, but there may be a pre-war crisis, and you're also concerned about this?


Yes. Ahead of passing the'Lease 3 Act', the previous set price has already risen significantly, and it has risen for 56 consecutive weeks as it renews its daily highs.

In the third week of July, the weekly apartment rental price in Seoul rose 0.12% from the previous week. Nationwide rents rose 0.14%, both metropolitan and provincial areas rose, raising concerns that rents will be higher before the law goes into effect.

In addition, landlords who notify tenants of the contract termination in advance are also coming to the scene. So, the government has also taken measures to prevent such side effects.

Even if the rent was raised by more than 5% before the law was enforced, the tenant could lower it again to within 5% if desired.

For example, if the landlord asks you to increase the rent by 10% before the end of the contract, and you sign the contract again, you can leave the rent up to 5% after the law goes into effect and get the rest of the money back.

The'Lease 3 Act' will be passed at the plenary session of the National Assembly on the 4th of next month as early as possible, but retrospective application is likely to be controversial in the legislative process due to the possibility of unconstitutional fertilization.