Shortly after President Moon Jae-in mentioned the pain of rent for small business owners and self-employed persons whose business was restricted due to quarantine measures, reports of the claim that “rent reduction is unconstitutional because it is a violation of private property rights” followed. Aggressive reports also faded when the Democratic Party leadership drew a line on rent cuts. Instead of leading a discussion on policy, it has been repeated again to determine the direction key.
The discussion on rent was fueled by President Moon’s remarks at the Blue House chief and aides meeting on the 14th. President Moon said, “It sounds very painful to ask whether it is fair to bear the burden of rent and the sharp decline in sales if business is restricted or prohibited in accordance with the quarantine guidelines.” “The whole society shares the weight of pain and the government We need to gather various solutions and wisdom for ways to increase our responsibility and role.” On the same day, Democratic Party lawmaker Lee Dong-ju proposed the’rental suspension method’, and the Justice Party leadership insisted on the pain sharing of the government, renters, and tenants. Rep. Yong Hye-in of the Basic Income Party recently issued an amendment to the Disaster Safety Act in which renters are also partially or fully exempted when ordering to suspend or restrict business of commercial buildings.
This is not the first time there has been a claim to solve the rent problem for small business owners and self-employed people. After the amendment of the Commercial Lease Protection Act in September, a higher level of rental support has been demanded steadily. Since September, the Participation Solidarity has argued that “a legislative for emergency relief is necessary for’reduction’ beyond’deferral’ of shopping mall rental fees.” ‘Pain-sharing emergency legislation in which the government or local governments reduce the rent of commercial tenants who suffer losses or suffer enormous pain due to compulsory business restrictions through administrative measures equivalent to an emergency fiscal order, and the government shares part of the reduction or exemption. It is an argument to review’. Democratic Party lawmaker Lee Seong-man proposed the’Half-Price Rent Law’ in September, in which a special disaster zone is declared in accordance with the Disaster Safety Act, and when a special disaster zone is declared, the rent is increased or decreased. In local governments, Goyang Mayor Lee Jae-joon has filed a petition on the Blue House National Petition’s website, stating that “I will promptly urge small business owners to reduce their rent”.
Until now, Korea’s initial quarantine results have led to a delay in responding to rent. Small business owners and self-employed people appealed for the need for additional supplementary measures even after the Commercial Lease Act was revised in September, but the government and the ruling party began to move only after the third-stage distancing measures were taken.
However, even before the debate began in earnest, some media labeled it’unconstitutional’. The proportion of related reports is clearly prominent in the economic magazine. On the 16th, the Korea Economic Daily (in a word…the shopping mall rent is also controlled) and Maeil Economic Daily (let’s say the President’s word…與, promoting the shopping district rental discount) all dealt with the discussion of rent reductions as’private property infringement controversy. Conservative newspapers stipulated the discussion of rent reduction or exemption as “fighting” and “splitting sides” between landlords and tenants. △ The Chosun Ilbo “How to Stop Renting”… ‘Controversy over renters and tenants’ controversy” △The JoongAng Ilbo (private) “Relieving the burden of rent should not be on the side”.
At that time, the government and the ruling party did not disclose specific directions. First of all, President Moon, who threw the buzzword, as well as the next day, the following day, Kim Tae-nyeon, the representative of the hospital, simply said, “I will come up with a fair rental solution.” It was unreasonable to analyze government policy in detail or to conclude that it was’unconstitutional’. Therefore, it could not go beyond criticism such as “the government’s willingness to actively intervene in the private sector” or “the idea itself is unconstitutional”.
Song Gi-chun, a professor at Chonbuk National University Law School, said, “Depending on the content, the rental policy may sometimes be a violation of the private property system or a communist idea. I pinched it. The media needs to meticulously demonstrate how the lessor and tenant can find the best place to live together. It was also the responsibility of the media to introduce specific overseas cases and to suggest directions that fit the Korean reality.
Overseas countries have already implemented policies such as rent support for small business owners and self-employed persons. In the United States, even if a tenant fails to pay the rent since March, they will not be expelled for up to 120 days, and the lessor who has not paid the loan will not be seized for non-payment of the loan. Canada requires property owners to reduce their rent by at least 75%, the government pays 50% and tenants up to 25%. Landlords receive benefits such as tax cuts and delays in repayment of loans.
Australia (New South Wales) requires rents to be adjusted through negotiations between landlords and tenants. The landlord must reduce the rent as much as land tax, utility bills, and insurance premiums have been reduced. In the case of the tenant, in case of damage due to’shutdown’, etc., the tenant must state the fact of the damage and provide relevant evidence. Both the landlord and tenant can request renegotiation, and if the landlord and tenant do not agree, mediation proceeds.
Professor Song said, “It will be necessary to consider all the interrelated parties, rather than seeing (the rent) only as a matter between the lessor and the tenant. It is true that self-employed and small business owners have difficulties in the midst of Covid 19, but this difficulty is a chain, so it seems that they are not only enjoying profits in the midst of being a lessor.” “If you have measures such as rent, you can keep the rent as it is, but It would be good to do it in a way that preserves a portion or a certain percentage.” For example, in order to receive the government’s rent guarantee, the lessor cuts the rent by 10-20%, and in this case, the government directly compensates the renter with 30% of the rent.
Han Sang-hee, a professor at Konkuk University’s Law School, also stressed that the important thing is the question of how the rent cuts work. Professor Han said, “The most important thing is whether there is a system that can consider individual equity. The owner of the building may have a very large store inexpensively because it is well-run. In that case, it may be wrong to ask them to cut down.” It would be okay to set up a rent adjustment deliberation committee at the basic local government unit, listen to the opinions of the tenant and the tenant, and adjust it in units such as ward, county, city, etc. through public hearings.”
However, it was considered that the possibility of realization such as the president’s request for the issuance of an emergency economic order was low. Professor Han said, “If the Korean National Assembly is finally blown up, it is impossible without knowing it. He added, “If the power of the people goes out of the field and is not a unit that refuses to attend the National Assembly, it cannot be exercised,” he added. “The ruling party now has 180 seats, but would it be necessary to invoke the emergency economic order?”
The government and the ruling party have stepped up toward providing direct rent to tenants. In chronological order, the leadership of the ruling party said that the Democratic Party was also concerned about’unconstitutional possession’ or that the party was also directly reviewing the direction of support after reports of’controversy occurred’. However, the ruling party has not even specified what is unconstitutional. Media that instigated the controversy over the unconstitutionality in the discussion of rent reduction and exemption have argued for the unconstitutionality of the 3rd Lease Act, but will it not respond to this? Criticism is now being made on how useful one-time support measures can be. Politicized reports that put the constitution ahead of necessity are also a problem, but the reason is that the government and the ruling party are also swayed by public opinion rather than elaborate discussions and are missing fundamental measures.
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