A woman surnamed Lee in her 30s rented an apartment on a jeonse deposit last May in Hongje-dong, Seodaemun-gu, Seoul, and has been living there. But less than a year after moving in, she received a request to move out from the landlord. The landlord put the dwellings on the market due to the burden of heavier capital gains taxes and said a prospective buyer was demanding immediate move-in, asking for understanding while offering 10 million won for moving expenses and consolation money. After insisting, "I won't move out," Lee eventually found a new jeonse home and signed a written commitment to vacate.
With the reinstatement of heavier capital gains taxes on multiple-home owners about 50 days away, the number of tenants like Lee receiving sudden requests to move out is increasing. Landlords, who must somehow get tenants to leave due to tax burdens, are equally at a loss. They are sweating as they try to persuade tenants to vacate by adding consolation money on top of moving expenses.
According to the brokerage industry on the 19th, conflicts have been growing recently between landlords rushing to dispose of dwellings before contracts expire and tenants who had in mind renewing their leases. An employee at a licensed real estate agency in Hongje-dong, Seodaemun-gu, Seoul, said, "Multiple-home owners are eager to sell dwellings quickly and have no room to consider the tenant's situation, and from the tenant's point of view, their place to live disappears overnight, so conflicts are flaring up everywhere."
The government has allowed the move-in of a new landlord (buyer of the dwellings) to be postponed until the existing tenant's lease ends, but many want to move in for actual residence as soon as they acquire the dwellings due to reasons such as lending regulations. The employee said, "If the tenant has already taken out a jeonse loan using the dwellings as collateral, the buyer can only receive a subordinated loan for the difference after subtracting the jeonse deposit from the loan limit calculated by applying the loan-to-value ratio (LTV; 40% in a regulated area)," and noted, "There have been cases where the buyer demanded the tenant move out because the loan didn't come through."
There are also many cases where the landlord says they will sell the home they live in and move into a rental dwelling. A staffer at a brokerage in Gil-eum-dong, Seongbuk-gu, said, "When the landlord moves in for actual residence, the tenant cannot exercise the right to renew the contract. There's no need for documents like a confirmation of the end of the residential lease contract, so it is easier to have the tenant leave, and quite a few multiple-home owners choose actual residence." In a land transaction permission zone, an obligation to reside is imposed when purchasing dwellings, so the land transaction permit and the tenant's written commitment to vacate must be submitted to the district office together.
Tenants facing eviction are often demanding large sums in consolation money or refusing to show the home, and such cases are numerous. On online real estate communities, posts are appearing such as "I'm not answering the landlord's calls and not reading texts asking to show the home" and "Just hold out. Isn't it better for us if the home doesn't sell because we don't show it?" The staffer said, "I can understand the tenants who were blindsided, but quite a few are refusing contact not only from landlords but also from brokers," and added, "Under current law, tenants have no obligation to show the home, so in the end, reaching an amicable agreement through moving expenses is the best option. Recently, there was a case where the landlord paid 20 million won to the tenant."