“I will raise the deposit”… 500,000 leasing business lawsuit notice

The wave is expected to increase as the court presented a judgment that contradicted the government’s interpretation of “first rent”. On the 20th, the court ruled that after signing a housing lease contract, a lessor registered as a housing rental business could receive a rent in excess of the 5% upper limit for jeon and monthly rent. This is an overturning interpretation of the authority that the government stated in August last year that immediately after the enforcement of the lease-related law, “leaseholders must also adhere to the 5% limit on deposits. In particular, as a result of the Maeil Economic Daily report, despite the court ruling on the day, the government showed its position to maintain the 5% cap as interpreted by the existing voters, which is expected to intensify market confusion.

According to the Korea Housing Rental Business Association on the 20th, the southern district court in Seoul raised the hand of the landlord, rental business owner A, in a civil lawsuit related to the increase in the deposit for jeonse on the 19th. A signed a charter contract with tenant B for 500 million won in December 2018, and then registered as a rental business in January of the following year. Ahead of the maturity of the jeonse, in December of last year, Mr. A requested an increase in jeon tax of 300 million won in line with the surrounding market, but the tenant refused to raise the upper limit of 5% according to the revised Lease Protection Act.

The problem was that the existing private rental housing special law and the government-revised rental law conflicted. According to the Private Law for Rental Housing Businesses, even if an existing lease contract was signed, the first contract made after registering as a rental company was considered the first contract.

However, the revised lease law set the rent increase rate at 5% when renewing the contract, and the government interpreted the right to obey the lease law because there is no provision related to the contract renewal application area in the civil special law. Governments such as the Ministry of Land, Infrastructure and Transport also insisted on a 5% upper limit on rent, saying, “Under the Special Civil Law, the right to apply for contract renewal is not excluded,” through the Commentary on the Housing Lease Protection Act in August. The court’s judgment is considered to have given power to rental companies’ arguments that the private law is a’special law’ that takes precedence over the general law. This is the first time the court has fully heard the landlord’s claim.

As the government’s interpretation of the 5% upper limit is shaken, it is observed that similar lawsuits will follow a line, mainly among rental companies. Landlords have even posted a petition for the Blue House on the 1st, asking for the adjustment of the initial contract criteria from the existence of a surviving lease to the time of registration as a rental business. The petition entitled’Please change the first rental fee standard for private rental business owners’ has received consent from 1477 people as of the 20th.

There are 530,000 private rental companies nationwide (as of the first half of last year). As of the first half of last year, only private rental houses registered by rental companies were about 1.67,000 households nationwide.

A rental business operator in Gyeonggi-do said, “Even if the price of jeonse around the area rises significantly due to the jeonse crisis, we will only listen to the government and make a contract with the 5% ceiling, but we will have to check whether we can hold the government responsible for the damage that occurred.” However, even if the contract was signed according to the government’s interpretation of the authority, it is unlikely to be held accountable. “It is difficult to file a claim against the government because the government has interpreted the authority, but it is due to the contract between the landlord and the tenant,” said Park Il-gyu, lawyer at Law Firm Jowoon.

The Ministry of Land, Transport and Maritime Affairs is in a position to wait for the judgment of the superior judgment. An official from the Ministry of Land, Infrastructure and Transport explained, “It is not a situation where the Supreme Court’s final judgment has been issued, and the Ministry of Legislative Affairs has also decided in the same manner as the administration’s authoritative interpretation, so we will wait for the court’s further judgment.” However, as the Ministry of Land, Infrastructure and Transport adheres to its existing position, market turmoil is expected to intensify. Attorney Park said, “Landlords with similar problems will sue one after another.” “The landlords who are about to re-contract will be confused whether they believe the court’s judgment or the interpretation of the authority of the Ministry of Land, Infrastructure, and Transport, but for the time being, extreme confusion seems inevitable. “It was evaluated.

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