Whether a 5% cap applies to a Korean commercial rent increase depends first on the converted deposit. Article 2 of the Commercial Building Lease Protection Act adds monthly rent × 100 to the deposit and excludes leases above the Decree threshold. Decree Article 2 sets it at 900 million won in Seoul, 690 million in the overcrowding control zone and Busan, 540 million in metropolitan cities and some named cities, and 370 million elsewhere. Within it, an increase can’t exceed 5% of the amount at the time of the request (Decree Art. 4). A 50 million won deposit with 3 million won rent converts to 350 million won.
1. Converted deposit = deposit + monthly rent × 100.
2. Thresholds: Seoul 900 million · control zone and Busan 690 million · metropolitan cities etc. 540 million · elsewhere 370 million.
3. Within it: increases up to 5%, none within 1 year. Renewal and premium protection apply even above it.
Calculator
Updates as you type. Converted deposit = deposit + monthly rent × 100. The increase cap is 5% of the current rent or deposit at the time of the request; no increase within 1 year of the lease or the last increase. “Metropolitan cities” excludes Busan and the overcrowding control zone and county areas; Gwangju here is Gwangju in Gyeonggi.
Regional thresholds — Decree Art. 2(1)
| Area | Converted-deposit threshold | Worth noting (ours) |
|---|---|---|
| Seoul | 900 million won | — |
| Overcrowding control zone (excl. Seoul), Busan | 690 million won | — |
| Metropolitan cities (excl. control zone, counties, Busan), Sejong, Paju, Hwaseong, Ansan, Yongin, Gimpo, Gwangju | 540 million won | Gwangju in Gyeonggi |
| Elsewhere | 370 million won | — |
The conversion ratio in Decree Art. 2(3) is 100/1: each won of monthly rent counts as 100 won of deposit.
The 5% cap and 1 year — Act Art. 11, Decree Art. 4
| Type | What the source says | Worth noting (ours) |
|---|---|---|
| Request (1) | If rent or deposit becomes inappropriate because of taxes, charges or other economic change, or a class-1 infectious disease, either party may ask for a future increase or decrease | Landlord or tenant |
| Cap (Decree Art. 4) | An increase can’t exceed 5/100 of the rent or deposit at the time of the request | — |
| 1 year (2) | No increase request within 1 year of the lease or the last agreed increase | — |
| After a disease cut (3) | After a cut due to a class-1 infectious disease, the cap doesn’t apply until rent returns to the pre-cut level | Restoring is outside the cap |
Three sums — our example
| Case (our example) | Converted deposit | Result (our sum) |
|---|---|---|
| Deposit 50 million + rent 3 million | 50m + 3m × 100 = 350 million won | Within every threshold (below the lowest, 370 million) |
| Deposit 100 million + rent 5 million | 100m + 5m × 100 = 600 million won | Within for Seoul, control zone, Busan; above for metropolitan cities (540 million) and elsewhere |
| 5% increase on the first case | Rent 3m → up to 3.15 million won; deposit 50m → up to 52.5 million won | 5% on each |
Above the threshold, as in the second case, Art. 11 (the 5% cap) isn’t on the list, but Art. 2(3) still applies Art. 3 (opposability), Art. 10(1), (2) and the main text of (3) (renewal), Arts. 10-2 to 10-9 (premium etc.), Art. 11-2 and Art. 19. Renewal is in commercial lease renewal for 10 years; the premium in commercial lease premium protection.
Checklist
- ☐ Work out the converted deposit from the lease
- ☐ Which band the location falls in (control zone or not)
- ☐ 1 year since the lease or last increase
- ☐ The increase within 5% of the current amount
- ☐ Whether VAT or service charges count as rent: check the lease (not in these articles)
Questions that remain
Can deposit and rent both rise 5%?
Decree Art. 4 says 5/100 of “the rent or the deposit”. How to combine both isn’t spelled out, so the calculator shows 5% of each (our sum).
Where is the overcrowding control zone?
Decree Art. 2 refers to the zone under the Seoul Metropolitan Area Readjustment Planning Act; we didn’t reproduce the list. Ask the local government office.
Sources
- Korean law database (law.go.kr) — Commercial Building Lease Protection Act Arts. 2, 11 — source (current text, effective 12 May 2026, Act No. 21083; checked 19 October 2026). Scope and conversion, the Art. 2(3) list, grounds for adjustment, the 1-year bar, the post-disease exception.
- Not read. Case law.
- What we added. The “worth noting” column and the Korean everyday gloss.
Sources
- Korean law database (law.go.kr) — Commercial Building Lease Protection Act Enforcement Decree Arts. 2, 4 — source (current text, effective 1 July 2026, Decree No. 36423; checked 19 October 2026). Four regional thresholds, the 100/1 ratio, the 5/100 increase cap.
- Not read. The control-zone list.
- What we added. The “worth noting” column and the Korean everyday gloss.
Where to check further
- Local government office — whether the location is in the control zone.
- Commercial lease dispute mediation committee or a lawyer — increase disputes.
Written on 19 October 2026. The content is from the source; the glosses are ours.
