From now on, operators of private rental housing must disclose fees such as maintenance charges and appliance or furniture usage fees transparently when signing a lease. The move is to block the practice of covertly raising effective rent by increasing maintenance fees and the like. In addition, the authority to cap rent increases for rental complexes with more than 100 households will be expanded to metropolitan local governments.
The Ministry of Land, Infrastructure and Transport said on the 13th it will preannounce for legislation from Jul. 14 to Aug. 24 a revision to the Enforcement Decree and Enforcement Rule of the Special Act on Private Rental Housing centered on these measures. The step focuses on preventing unfair rent hikes under the pretext of maintenance fees or furniture lending fees and on overhauling the system so that city and provincial governments can more thoroughly manage and supervise rental housing.
Under the revision, items that landlords must submit when reporting lease contracts will increase. Previously, it was enough to report only the contract period, rent, and loan status, but going forward, they must also report the specific amounts or calculation methods of imposed maintenance fees and usage fees. The measure aims to prevent side effects of effectively raising rent by setting high charges for so-called "options" such as home appliances, system air conditioners, and built-in closets.
Along with this, the standard lease contract form will also change. From the point the tenant signs, the contract must clearly state the amounts of maintenance fees and various usage fees, or how these are calculated. If a tenant or the tenants' representative meeting requests an audit to check whether maintenance fees were used appropriately, the landlord must accept the request unless there is a special reason not to.
Oversight powers of local governments will also be strengthened. The authority to enact a local government ordinance and to verify rental deposit guarantee enrollment information, which previously rested only with basic local governments (cities, counties, districts), will be expanded to metropolitan local governments (cities and provinces) such as Seoul City or Gyeonggi Province. Accordingly, for private rental housing complexes with 100 or more households, cities and provinces will be able to directly set the rent increase rate by local government ordinance, and they will also be able to directly verify guarantee enrollment through Renthome, the rental housing information system.
Some administrative procedures and regulations will also be adjusted. Mayors, county heads, and district heads must post the rental condition information reported by landlords not only in the existing local government gazette but also on their website so that ordinary citizens can easily view it. Meanwhile, reflecting requests from local governments to ease fines imposed for minor legal violations such as omitting a contract report due to simple error, the level of penalties will be partially lowered. For a first violation, fines will be reduced from 5 million won to 3 million won, and for a second violation, from 7 million won to 5 million won. However, the 10 million won fine imposed for a third violation will remain unchanged.
Han Seong-su, director general for housing welfare policy at the Ministry of Land, Infrastructure and Transport (MOLIT), said, "We expect this revision to make maintenance fees and usage fees in private rental housing more transparent and to strengthen housing stability for tenants."