617th Policy Quiz Event - Housing Lease Contract Reporting System: A System for Market Transparency and Tenant Protection

Background and Purpose of the Introduction of the System

The rental market has long faced issues of information asymmetry. Landlords are often the only ones fully aware of the terms of the contract, while tenants struggle to obtain reliable information at the time of signing, leading to unfair contracts and violations of rights. In response, the government has introduced a reporting system for rental transactions to protect tenants' rights and promote transparency and stability in the rental market. This system is based on the "Act on the Reporting of Real Estate Transactions," enacted in August 2020, and it began full implementation in June 2021. For the initial four years, the system operates without fines as a grace period to ensure its establishment, and from June 2025, fines will be imposed.

Report Target

Contracts that require reporting must meet all three of the following criteria. Contract timing: Contracts signed after June 1, 2021, including new contracts, renewal contracts (including rent changes), modifications to contract terms, and cancellation contracts. Regional criteria: Capital area (Seoul, Incheon, Gyeonggi), metropolitan cities (excluding counties), Sejong City, Jeju Island. However, county areas in Gyeonggi Province are excluded. Amount criteria: Only contracts with a deposit exceeding 60 million won or monthly rent exceeding 300,000 won are subject to reporting. Implicit renewals with no change in rent are excluded from the reporting requirements.

Reporting entity and method

The reporting obligation applies to both landlords and tenants. However, if one party submits the report, it is considered a joint report, which helps to reduce administrative burdens. The reporting deadline is within 30 days from the date of contract signing. There are two methods for reporting. First, in-person reporting: This involves visiting the resident center located at the property. Second, online reporting: This can be done through the Ministry of Land, Infrastructure and Transport's Real Estate Transaction Management System (RTMS), and easy authentication via PC, smartphone, or tablet is also available, making it very convenient.

Report items and submission documents

The report items include the following information: details of the landlord and tenant, the address of the property, area, purpose, security deposit and monthly rent, contract period and date of execution, and in the case of a renewal contract, the previous rent amount and whether the renewal option has been exercised. The required documents are as follows: housing rental report form, a copy of the contract (mandatory if for the purpose of obtaining a certified date), identification, and if the contract is not submitted: a deposit slip, a copy of the bankbook, and other proof materials are required.

Effect of Automatic Granting of Certainty Date

When the report of the rental contract is completed, a confirmation date is automatically granted. This ensures that if the tenant meets certain legal requirements while residing in the property, they obtain rights such as priority in claims against third parties and the right of preferential repayment, allowing them to recover their security deposit in auctions and other situations. This substantial legal protection enhances the tenant's ability to live more securely and significantly helps defend against violations of their rights.

Grace Period and Penalty

The grace period is from June 1, 2021, to May 31, 2025. During this time, no fines will be imposed for late reporting or non-compliance. The full enforcement will begin after June 1, 2025. For late reports, fines will range from 20,000 to 300,000 won, and for false reports, fines can be as high as 1,000,000 won. Therefore, being well-informed about this system can help avoid disadvantages.

Social effects of the system

The rental reporting system goes beyond simple administrative procedures and contributes to solving structural problems in real estate transactions. Increased market transparency: By reflecting real transaction information in real-time, it encourages reasonable rent pricing and contract practices. Protection of tenant rights: By automatically granting a confirmed date, it effectively protects tenants' property rights. Establishing a policy foundation: The government can develop more sophisticated housing policies and market stabilization measures based on the collected transaction information.