The path forward for the housing lease system of reunified Korea

Abstract

South and North Korea have diametrically opposite property systems, the disparity of which is most evident in respect of immovables. While South Korea, a capitalist market economy, adopts an open market approach, North Korea under communist rule favors a heavily centralized and strictly regulated approach towards immovable property. Such a stark contrast will prove be very challenging in harmonizing the two systems if the time comes for reunification on the Korean peninsula. Although it is virtually impossible to predict the form and process by which reunification may occur, it is vital that we prepare for such an event. The objective of this paper is to do just that by considering some of the critical questions that are likely to arise in the process of harmonizing the property and housing systems of South and North Korea. One such question regards the matter of privatization. Given the general lack of housing in North Korea, we need to introduce special legislation in the Northern part of the Korean peninsula allowing for, as a rule, one house per household, at least during the initial stages of the reunification. Also, only those who are officially registered by the North Korean authorities as the lawful possessors of these houses should be recognized as being viable for acquiring house ownership. The other critical question addressed in the paper is the direction of reorganizing the housing lease system in post-reunification Korea. The current Housing Lease Protection Act of South Korea will be inadequate for applying in the North. The matters of its scope of application, the opposing power of the lessee, duration of lease, regulation of rent and the right to demand renewal of the lease contract are all dealt with in the paper.