Legal Issues Related to Leasing a House in Korea_[Housing Protection Act]

Q1) 

Mr. Fraser, U.S. Citizen, had leased an apartment located at Yongsan-gu, Seoul for two-year period. Prior to the expiration date of the lease, the landlord notified him that he intends to increase monthly rent by 20% in case of a renewal. Mr. Fraser talked to some of his Korean friends; and was told he has right to renewal the lease with 5% rent-increase cap in accordance with [Housing Protection Act]. When Mr. Fraser pointed out his right, the landlord’s realtor said; [Housing Protection Act] is only applicable to Korean-nationals. Is this true?

 

A1) 

In principle, it is correct that [Housing Protection Act] is only applicable to Korean nationals since the Article 1 of the Act stipulates that the purpose of the Act is to ‘secure stability in the residential life of national citizens’.    

 

However, in case the foreigner report/register the address of premise as the place of stay with Immigration Center; it is eligible to claim the right to get protected under the Act.

 

Q2) 

When Mr. Fraser responded to the realtor that he had reported/registered the premise as the place of stay with Immigration Center; thus 5% of cap should be applied for renewal of the lease. Now, realtor says the landlord shall move into the premise; thus Mr. Fraser needs to move out on the date of expiration of lease. What can Mr. Fraser do?

 

A2) 

In case the landlord (including his/her lineal ascendants or descendants) intends to actually reside in the premise; he/she can refuge the request for renewal of the lease to the lessee in accordance with Article 6-3-(1)-8. of the Act.

 

However, there are cases that the landlord actually does not move into the premise when the lessee moves out. In such case, the lessee can file a lawsuit against the landlord for the damages up to the amount stipulated in Article 6-3-(6) of the Act:    

(6) The amount of compensation for loss referred to in paragraph (5) shall be the greater of the following amounts, unless an agreement is reached between the parties concerned on the scheduled amount of compensation at the time of refusal:

 1. An amount equivalent to three months' monthly rent paid at the time of the refusal of renewal (where a deposit other than the rent exists, including an amount obtained by converting the deposit into a monthly rent based on the lower of the rates referred to in the subparagraphs of Article 7-2; hereinafter referred to as "converted monthly rent");

2. An amount equivalent to two years' amount of the difference between the converted monthly rent that the lessor obtains by leasing the house to a third person and the converted monthly rent at the time of the refusal of renewal;

3. The amount of loss suffered by the lessee due to the

refusal of renewal on the ground under paragraph (1) 8.

please contact Seo Yun Jung (syjung@nhanyang.com) for any further queries; a K-Laywer4U at New Hanyang Law Firm (nhylaw.co.kr)