[EDITORIALS]Hasty legislation hurts all

Home > Opinion > Editorials

print dictionary print

[EDITORIALS]Hasty legislation hurts all

A new law governing the leasing of commercial buildings has created huge problems because it was sloppily drafted. The hastily enacted law, which is supposed to protect small merchants, is actually distressing business operators. Owners of commercial properties, believing that the new law would prevent them from increasing rents, have been rushing to do so before the new law goes into effect in January. A civic group that campaigns on behalf of lessees claims that 1,000 complaints nationwide have been filed about sharp rent hikes.

Belatedly, the government has scrambled to calm the backlash, saying the law allows property owners to renew leases and adjust rents on an annual basis. Enforcement of the law has been delayed one year to give the government time to draft measures to prevent rent increases.

But what has the government done? The Commercial Building Lease Protection Act stipulates that the administration put a ceiling on rent increases and determine the amount of deposit money that should be repaid to lessees if the property owner goes bankrupt. But the government has not begun to draft the enforcement decree.

Worse yet, the National Tax Service has announced that it will launch a massive investigation of property owners suspected of unfairly raising rents. We doubt that the tax service's threat will help lower rents that have already been raised.

Any policy has both good and bad aspects. If the new law favors tenants, property owners will act to protect their interests.

The latest surge in commercial building rents results from the government's failure to recall the lessons from its 1999 revision of the Housing Lease Protection Act, which was intended to put a limit on rental increases but instead led to a surge in prices.

The government should try to find reasonable solutions by reducing the contract period to three years from five and by limiting compulsory protection of tenants' rights to small business operators. It should also readjust the ceiling on rental increases. Most importantly, issues like commercial property leases would better be left to market forces, keeping the government's intervention at a minimum level.
Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
s
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)

What’s Popular Now