[WORD_ON_THE_WEB] 'What law in the world has only good effects?'A growing number of people are exercising their contract renewal rights when renewing their housing lease contracts for apartments in Seoul.
According to Yonhap News and Real Estate R114’s results, analyzing 183,103 contracts dealing with apartments in the Seoul district from last June to this March, the change was more prominent for key money deposit deals than monthly rent deals.
Seventy-two-point-six percent of the people who secured key money deposit deals utilized their contract renewal rights. That was 19.1 percentage points higher than those of monthly rent deals, which was 53.5 percent.
The explanation for this is that the deposit for key money deposit deals is considerably larger than that for monthly rent deals.
Due to the three laws related to tenants’ rights, which first went into action in July 2020, a tenant is guaranteed a right to extend their contract for up to two years with a 5 percent cap for a rent rise.
This means that the leaseholder can’t up the rent more than 5 percent during the term of the contract.
Accordingly, the deposit for key money deposit deals is expected to show a steep rise at the end of this July, which is when the contract renewal rights after the three laws were introduced would be exhausted.
The Korea Real Estate Board says that the average key money deposit price of apartments in Seoul last March was 632.942 million won. That is 37.6 percent higher than the same period in 2020, which was 460.7 million won.
“The three laws don’t help anyone. The government should leave the real estate market as it is.”
“The three laws should be thrown away. They only make the key money deposit deals pricier. There are fewer sales offers, and of course, the prices climb. The laws are a short-sighted decision.”
“The laws are meant to protect the tenants for four years. If there is something faulty with it, we should talk about fixing the problem, not abolishing the law for good.”
“What law in the world has only good effects? It’s not logical to only blame the three laws for higher deposits.”
“Rents are pricier because houses prices are higher... Not because of the three laws.”
“There would be many reasons behind the price climb, but you can’t say that the three laws are the main cause. The rent is pricier because of the short supply. Even more so for the capital areas.”
BY LEE SI-YEOUNG, YOO JI-WOO [firstname.lastname@example.org]