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The amendment to the Commercial Lease Protection Act only stipulates the basic rights of tenants and landlords affected by Corona 19, but due to the lack of detail, market conflicts and confusion are concerned. In the photo, restaurants in Jongno-gu, Seoul, were closed in a row after Corona 19, and posters were hung looking for vacant tenants. [이충우 기자]The National Assembly is expected to pass the revised Bill for the Commercial Leasing Protection Act. However, the amendment only stipulates the basic rights of tenants and landlords affected by Corona 19, but all details are omitted. For this reason, many views are concerned that there is more confusion than when the Housing Lease Protection Act was enforced in late July.
There are three main contents added or changed through the ‘Amendment to the Law for the Protection of Leasing of Shopping Center Buildings’ approved by the Legislative Judicial Committee of the National Assembly on the 23rd. First, it was recently established as a reason to demand a reduction in rent or deposit due to ‘unprecedented change in economic conditions due to first degree infectious diseases, etc.’ This means that if you cannot pay your rent because you cannot do business with Corona 19, you can request a reduction.
Second, for six months from the effective date of the invoice, even if the tenant does not pay the rent, the landlord cannot request termination of the lease. In the previous law, the tenant could terminate the lease if he did not pay the rent for three months. However, this ‘6 months late’ rule is a temporary special provision and applies temporarily only to the current situation where the damage caused by Corona 19 is severe.
Finally, when rent is reduced after the emergency situation is over, the ‘5% upper limit rule’ does not apply. The 5% upper limit rule is a number established by the Presidential Decree and prevents the landlord from increasing the rent by more than 5% when renewing the contract. That is, when the emergency situation caused by Corona 19 ends and the landlord requests a rent increase, it is interpreted to mean that the rent can be raised without restrictions to the level of the rent before the reduction. “In the wake of Corona 19, rent is a huge burden on the tenants of the mall after Corona 19,” said Chou Gyeong-ho, Rep. It is intended to facilitate the legislation, “explained the purpose of the legislation.
However, the experts responded that “the details of the bill are inadequate and there is no institution that can provide legally binding interpretations, so the relevant lawsuits may erupt upon implementation.”
First, it did not set a limit on the amount of reduction that the tenant can request. One lawyer said: “As the revised bill stipulates that the 6-month rent is not a temporary special case, it appears that it is theoretically possible to reduce the rent by 100% if the tenant wishes,” he said. It is not clear whether the rules will apply. “Another factor that raises the potential for controversy is that there is no content to enforce the landlord’s request for abatement if the landlord does not accept the tenant’s request.
Additionally, the parties are curious if the back rent can be received at a later date, if back interest can be received when the rent is received, and if there are financial assistance benefits for landlords who have not received rent for 6 months. Not only the National Assembly, but also the relevant ministries such as the Ministry of Justice and the Ministry of Lands, Infrastructure and Transport did not present it at all.
Some point out that if the lawsuit between the landlord and the tenant starts in earnest, the tenant will have to cover the costs first if it is correct that the tenant was unable to pay the rent due to Corona 19. In a word, it is said that if the tenants Commercials and landlords interpret the ‘well done’ bill according to their interests, disputes will increase and confusion will increase.
Professor Shim Gyo-eon from Konkuk University’s Department of Real Estate said: “It is understood that the purpose of sharing the pain caused by the Corona 19 crisis is understood, but there must be incentives for the policy to be effective.” If forced, the rental car market will become unstable. “Professor Kwon Dae-jung from the Department of Real Estate at Myongji University said,” The rental housing law did not clarify the detailed regulations, so the Market confusion worsened, but the commercial leasing law also lacked specifics. “The shopping center rental market is expected to be confusing as content is lacking.”
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