"Does the landlord really live there?" ... Telecom, TV, and card data all under review [Real Estate Atoz]

[Financial News] The Ministry of Land, Infrastructure and Transport said in a recent report to the National Assembly that it would move to block illegal acts that exploit loopholes in the system. One of its measures is a fact-finding survey into violations of the residency requirement for homes subject to the price cap system.  
A three-year grace period for the residency requirement on homes under the price cap system has been in effect since March 2024. The end of that grace period is now approaching. Although the three-year suspension has been controversial, no policy changes have been made amid government and political indifference.

Homes subject to the price cap system are assigned a residency requirement based on the relationship between the sale price and market prices. For homes on public land, the requirement is five years if the sale price is less than 80% of nearby market prices, and three years if it is between 80% and 100%. For homes on private land, the periods are three years and two years, respectively. In both public and private land cases, no residency requirement applies if the sale price is set above nearby market prices.
The residency requirement is determined through local government review. Kim Gyu-jeong, a real estate analyst at Korea Investment & Securities Co., Ltd., said, "The residency period ultimately depends on which complex the local government compares with nearby market prices."

According to the ministry's plan, it will require reports at the start and end of the grace period and conduct fact-finding surveys to prevent fraudulent address registrations and other misconduct during the suspension period. Detailed surveys are expected to begin early next year after related systems are revised.
The survey method will also become more detailed. According to the government, the survey will focus not on whether a person is registered at the address on paper, but on whether they actually live there. Inspectors will also conduct on-site checks by visiting the home directly. To improve the effectiveness of those inspections, the government plans to use telecom records, card usage data, TV reception records, and materials held by management offices.
If a person subject to the residency requirement for a home under the price cap system falsely claims to have lived there without actually doing so during the required period, they could face up to three years in prison or a fine of up to 30 million won under the Housing Act.

In fact, the residency requirement has more than a few issues that need to be fixed. First, whether the requirement applies, and for how long, can vary depending on local government discretion.
For example, Acro Ritz County in Bangbae-dong, Seocho District, which accepted applications in December 2024, was a so-called lottery complex under the price cap system, with potential capital gains of as much as 800 million won for winners. But the residency requirement did not apply because the local government judged that the sale price had been set above nearby market levels. Even among price-capped complexes in the Gangnam area, the rules vary widely.

Another problem is its conflict with the lease renewal request right. The residency requirement has a three-year grace period, but rental contracts guarantee at least four years through the "2+2 years" system. In other words, tenants can stay for four years if they want. Yet the landlord's residency obligation within three years effectively strips tenants of their rights.
Earlier, the Yoon Suk Yeol administration had promised to abolish the residency requirement through its Jan. 3 measures in 2023. But the related legal revision stalled amid opposition from the then-opposition party, and in February 2024 it was amended to a three-year grace period and passed. The move was seen as an effort to take the April general election that year into account.
At the time, the basis for choosing "three years" was also unclear. In addition, conflicts with the lease renewal request right sparked debate. In response to the criticism, the government and political circles said they would "first implement it and then fix the problems."
But even now, three years later, no reform has been made. As the end of the three-year grace period finally approaches, the government has turned to a sweeping fact-finding survey.
[email protected] Lee Jong-bae Reporter