A study on the preferential conversion for the sale of insolvent rental housing following the amendment of the Special Act on Public Housing

Pursuant to the enforcement of the wholly amended Special Act on Private Rental Housing (Act No. 13499) on August 28, 2015, the legislature stipulated that rental housing constructed by private rental business operators with public support prior to this date would continue to be (deemed) public rental housing subject to the former law. The amendment of the Special Act on Public Housing (Act No. 17734), on December 22, 2020, introduced a supplementary provision that applied the amended regulations on Conversion for Sale to (deemed) public rental housing pursuant to the previous transitional provisions. This did not clearly specify whether the Conversion for Sale regulations of the former Act on Rental Housing would be replaced by the Conversion for Sale regulations of the amended Special Act on Public Housing or if they would continue to be applied insofar as they do not conflict with the new law. However, a significant dispute over the interpretation of this issue exists. In this regard, given that a clear legal basis is required to restrict property rights under the Constitution, it is reasonable to interpret that if Article 6 of the supplementary provisions of the amended Special Act on Public Housing is not clear about Article 21, Paragraph 2 of the former Act on Rental Housing, then the said provision, which entails a restriction of property rights, no longer applies. Article 21 of the former Act on Rental Housing and Article 50-3 of the amended Special Act on Public Housing have corresponding structures, and viewing them as in a substitutive relationship is natural. The supplementary provision also does not suggest an intent to maintain the application of the former law solely to insolvent rental housing in relation to conversion for sale. Furthermore, if the Conversion for Sale of Insolvent Rental Housing remains applicable, related penal provisions pursuant to the principle of legality in criminal law should be stipulated. The legislature did not explicitly stipulate the continued application in the amended law. Based on these points, it should be interpreted that Article 21, Paragraph 2 of the former Act on Rental Housing is no longer applicable to the (deemed) public rental housing now governed by Article 50-3 of the amended Special Act on Public Housing. The fundamental cause of these issues is in the ambiguous nature of the transitional provisions, suggesting a need for more precise legislation in the future.