The controversy over the amendment to the Housing Lease Protection Act proposed by Representative Park Min-min and Democratic Party Democratic Party (pictured below) on the 9th is growing. The contents are as follows. 1) As long as the tenant is not negligent, such as a three-payment overdue, the landlord must unconditionally extend the monthly rent contract for two years. 2) The increase in the rent to cheonsei amount cannot exceed 5% of the previous amount.
Conservative opposition critics say it is an unconstitutional law that infringes people's property rights, but Senator Park says Germany, France, the United Kingdom, and Japan already have similar lease stabilization policies. As it is a policy chosen by major capitalist countries, it is better to carefully examine whether it fits our system or people's emotions and how to minimize the impact of policy introduction rather than controversial controversy.
I would like to tell you about the case of Japan, who worked as a correspondent in 2016-2018. In Japan, the lease system is based on a two-year monthly rent contract, and, as Rep. Park's amendment, stipulates, "If a building landlord is not admitted to have justifiable grounds, the contract cannot be terminated." There is. What is going on in this Japanese rental market?
1. A landlord and building owner who picks tenants in a difficult way
I also rented a house in Tokyo, but I can live comfortably. The two-year contract is almost renewed as the first monthly rent. Psychological stability is also substantial. On the other hand, Japanese landlords have complicated thoughts. You can raise your monthly rent at will, or you can export your tenants at will. So, Japanese landlords pick tenants from the very beginning. We check whether the rent will not be pushed, whether the house will be clean, or if there will be a conversation. In real estate agencies 1) No pets 2) No children or few 3) Not foreigners 4) There are many cases where there are certain jobs and incomes.
In the case of Toyota Motor, when foreign engineers who came to Japan were unable to find a house, the company contacted real estate agencies to ask them not to discriminate against foreigners. My acquaintance was denied a contract because he had two puppies, but I finally managed to rent a house by telling other landlords'I would raise my rent 10% more.' There are also many unusual landlords. I don't know why, but I have heard of a landlord who said he would not accept officials. In the case of a shopping mall, the store owner sometimes submitted a report or a PT to the landlord saying, "I will do this business, and I won't be making money on this." What about in Korea? Isn't there a lot more landlords who want to save tenants except for some areas like Seoul and Gangnam? It would be difficult to save the tenant if such conditions were established.
2. Complex procedure
for rent increase In order for a landlord, a Japanese landlord, to request a rent increase, the following steps must be taken. ▷ Notification of the request for raises and supporting documents are sent to the tenant. ▷ If the tenant refuses, request the arbitration to the local simple court ▷ Go to the tribunal once a month for formal consultation with the tenant ▷ Formal trial in case of final breakdown. Japanese lawyers advise that "you should give enough reason why you need to increase your monthly rent when sending notices to tenants." This is because it is said to be a'no impression without evidence' in the simple court. Just like us, we can't just notify you of a rent increase and say, "If you can't, get out!"
Of course, in many cases, the tenant accepts an increase in monthly rent. It is a case where there is a big difference from the surrounding price. If there is a high likelihood that the simple court will raise the landlord's hand, you simply accept the rent increase. The landlord doesn't want a legal argument. In Japan, when renewing a two-year contract, the tenant pays the renewal fee (about a month's worth of rent) to the landlord, and the landlord sometimes suggests "I will not receive a renewal fee instead" in order to increase the monthly rent.
In the revised bill, Park set the upper limit of the monthly rent increase to less than 5%. In addition, each municipality has a housing lease calculation committee, and every year, appropriate standard rental standard for each region is calculated and announced.
3. What is the judgment of the Japanese simplified court?
If you go to the simple court, the landlord has to pay a significant amount. You also need to get a lawyer, and you need a real estate appraisal to prove that the rent is cheaper than the surroundings. No matter how well you prepare your documents, it is not easy to be recognized for an increase in monthly rent. This is because the simplified court considers the tenant's right to life more importantly.
Attorney Abe Tetsuo (pictured above), whom I met as a correspondent, said: "Let's say that there is one ramen shop. If the shop had been in a place for a long time, it would have been a lot of effort to gather local customers from the beginning. Also, a small commercial center would have been built around a ramen shop. It acknowledges the store's efforts, and if the store disappears, the regular customers' life patterns and lives change, and we even see this, of course, the rent is cheaper than the surroundings, so maybe it's an impression. More than 20%, more than 20% must be cheap, and the landlord must prove it with an appraisal, etc., and in my experience, it is difficult to raise it if it is about 10% cheaper. Considering this, it is rather negative for the landlord."
Personally, I think it is thanks to this lease system that 100-year-old restaurants are maintained in Japan, and the so-called genrification phenomenon does not happen well.
But even if you don't go to trial, the landlord's request to raise the rent will be a burden to the tenant. As far as I know, a Japanese president has been using an office in downtown Tokyo for 6 years, and in the 7th year, the landlord demanded a 20% increase in rent. Of course, I refused immediately. I still use the office as it is. However, we are still considering relocating the office.
4. Conflict with the undiscovered landlord, the landlord
“I want to raise my rent, but I was rejected, but I still want to send out this tenant and raise my rent on the next tenant!” What comes out of this situation is the landlords and landlords. It catches various pods and harass tenants. "It often damages the rental space", "complaints come in from around", and the smallest part of the contract, "breaches the contract," and makes a fuss. Is there already a good reason or has the contract been violated? It doesn't matter. It's just mentally pressing the tenant to demand eviction. It's Yangban who's calling for'Long-term remodeling due to aging building'. Tenants often agree to eviction because it is Japan with many earthquakes.
If the landlord requests the eviction first, the eviction fee (transfer fee) must be paid to the tenant. There was also a building owner who supported up to 30 million yen for the eviction fee and various support fees to evoke a 200,000 yen monthly restaurant.
5. Significant increases against new tenants?
Finally, the tenants who had been sitting down for a long time with cheap rent were finally released. Then, the new tenant has to get a lot of rent. One 30,40%? But it is also not easy. It is because there are not many cases where the tenant demands a reduction in monthly rent when the next contract is renewed. The tenant prepares the same data and asks the simple court for mediation. "It's too high for the surrounding price."
Moreover, Japan has a strong concept that'buildings are aging' due to frequent earthquakes. It is not easy to emotionally increase rents unless the development around them is enormous, or the commercial zone is rapidly activated. We tend to see it as ``Japan=Tokyo'', but local cities are often in poor economic conditions, so deflation is serious, including rent.
6. Impact of Real Estate Property Value
This rental system has a great impact on the Japanese real estate market. There are two types of real estate revenue: rental income + value increase. By the way, rental income can produce stable profits, but you cannot make big money. So what's left is investments in value-added real estate. You have to look carefully at which areas will be developed and which commercial areas will be developed. So when you go to a bookstore in Japan, there are a lot of books on urban development.
This is what Tokyo looks like in 20**! The development plan of each area in Tokyo is explained in color. You can use this information to buy new real estate for sale. And, you get a high monthly rent from your first tenant.
The Tokyo real estate market also rose. In particular, the rise began after the announcement of the 2020 Tokyo Olympic Games. In other words, the value of real estate has risen or there was an expectation of a rise in value due to the favorable development of the metropolitan area in line with the Tokyo Olympics. Not because of rental revenue. What will change in Korea?
It is not yet known whether Park Joo-min's amendment to the Housing Lease Protection Act will pass the National Assembly. Our rent to cheonsei system has a long history. As it is a law that will bring about a big change, we look forward to a close analysis of the pain of the common people, the property rights of homeowners, international trends, and the impact on the economy.