Article 1 (Purpose) The purpose of this Rule is to provide for detailed matters concerning the selection of tenants for housing units for long-term lease on a deposit basis pursuant to Article 32-2 of the Rule on Housing Supply and matters necessary for the supply and management of housing units for long-term lease on a deposit basis, including the management of tenants, the requirements for eviction, and the accumulation of a special reserve for repairs.

Article 2 (Definitions) Terms used in this Rule shall be defined as follows:
1. "Housing unit for long-term lease on a deposit basis" means a rental housing unit defined in subparagraph 3-2 of Article 2 of the Rental Housing Act;
2. "Head of household" means the head of a household comprised of his/her spouse, lineal ascendants (including lineal ascendants of his/her spouse, where tenants are selected pursuant to Article 12 of the Rule on Housing Supply) or lineal descendants on the resident registration card for the household: Provided, That the head of a household with no spouse nor lineal ascendant or descendant on the resident registration card for the household (hereinafter referred to as "single head of household with no defendant") shall be deemed the head of the household, if he/she is not less than 20 years of age;
3. "Head of a non-homeowner household" means the head of a non-homeowner household defined in subparagraph 9 of Article 2 of the Rule on Housing Supply;
4. "Tenant" means a person who has been successfully selected as a tenant of a housing unit for long-term lease on a deposit basis and who dwells in the housing unit under a lease contract thereon (hereinafter referred to as "contract");
5. "Tenants' savings" means the tenants' savings defined in Article 75 of the Housing Act;
6. "Managing entity" refers to the SH Corporation affiliated to the Seoul Metropolitan Government (hereinafter referred to as the "SH Corporation"), which directly builds housing units for long-term lease on a deposit basis or carries out the supply and management of housing units entrusted by the Mayor of the Seoul Metropolitan Government (hereinafter referred to as the "Mayor");
7. "Lease price" means a price determined at the level of not more than 80 percent of the average of lease contract prices of collective housing units in two or three complexes, similar to the rental housing units at issue in their types, sizes, and living conditions, among housing units in the same or an adjoining Si/Gun/Gu in which public rental housing units built and supplied by the managing entity as housing units for long-term lease on a deposit basis are: Provided, That if it is difficult to select similar complexes in sizes or other factors in the vicinity for the comparison with the collective housing units at issue, survey and assessment may be requested to a specialized survey institution;
8. "Selectee" means a person who is selected in accordance with the criteria for the selection of tenants under Articles 6 and 6-2 and who is finally determined as a person eligible for lease as a result of the examination on whether he/she owns a residential house, the qualification for tenants based on income criteria, and the appropriateness and truthfulness of his/her application; <Amended by Rule No. 3764, Sep. 27, 2010>
9. "Contracting party" refers to a person with whom the managing entity enters into a contract since it determines the person as eligible for the lease of a rental housing unit.

Article 3 (Scope of Application) This Rule shall apply to housing units for long-term lease on a deposit basis, supplied by the SH Corporation within the administrative jurisdiction of the Seoul Metropolitan Government.

Article 4 (Types of Housing Units for Long-Term Lease on Deposit Basis) The types of rental housing units supplied as housing units for long-term lease on a deposit basis are as follows:
1. Rental housing units built by the SH Corporation for the supply of housing units for long-term lease on a deposit basis;
2. Rebuilt small housing units acquired by the Mayor pursuant to Article 30-3 (3) of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents;
3. Rental housing units acquired by the Mayor pursuant to Article 38-6 (2) of the Housing Act;
4. Other housing units purchased by the Mayor or the SH Corporation for the supply of housing units for long-term lease on a deposit basis.

Article 5 (Eligibility for Supply) In order for a person to be eligible for the supply of a housing unit for long-term lease on a deposit basis, the person shall be the head of a non-homeowner household defined in Article 4 of the Rule on Housing Supply, who shall meet the requirements under Articles 6 and 6-2. <Amended by Rule No. 3764, Sep. 27, 2010>

Article 6 (Criteria for Qualification for Tenants and Selection of Tenants) (1) When the managing entity supplies housing units for long-term lease on a deposit basis pursuant to Article 4, it shall apply the following income criteria in selecting tenants: <Amended by Rule No. 3764, Sep. 27, 2010>
1. Housing units with an exclusive use area of not more than 60 square meters: Not more than 70 percent of the average monthly income of each household of urban workers for the previous year (Provided, That it shall not exceed 100 percent of the average monthly income of each household of urban workers for the previous year, if a housing unit falls under any provision of subparagraphs 2 through 4 of Article 4); <Amended by Rule No. 3764, Sep. 27, 2010>
2. Housing units with an exclusive use area of more than 60 but not more than 85 square meters: Not more than 150 percent of the average monthly income of each household of urban workers for the previous year; <Amended by Rule No. 3764, Sep. 27, 2010>
3. Housing units of more than 85 square meters: Not more than 180 percent of the average monthly income of each household of urban workers for the previous year. <Amended by Rule No. 3764, Sep. 27, 2010>
(2) The criteria for the qualification for and the selection of tenants of housing units for long-term lease on a deposit basis under subparagraphs 2 through 4 of Article 4 are stated in Table 1. <Amended by Rule No. 3764, Sep. 27, 2010>
(3) If there is a competition among persons in the same order of priority in supplying housing units for long-term lease on a deposit basis under Article 4, the managing entity shall select tenants in accordance with Table 2: Provided, That tenants shall be selected in accordance with Article 12 of the Rule on Housing Supply, where housing units under Article 32 (1) or (2) of the aforesaid Rule are supplied as housing units for long-term lease on a deposit basis. <Amended by Rule No. 3764, Sep. 27, 2010>
(4) Pursuant to Article 32-2 (3) of the Rule on Housing Supply, the managing entity may supply additional housing units for long-term lease on a deposit basis preferentially in accordance with the following subparagraphs within the maximum of ten percent of the number of housing units supplied for long-term lease on a deposit basis: Provided, That the criteria for the qualification for and the selection of tenants under subparagraph 2 are stated in Table 3: <Amended by Rule No. 3764, Sep. 27, 2010>
1. The head of a non-homeowner household with three or more minor children under the Civil Act: A housing unit with an exclusive use area of more than 60 but not more than 85 square meters; <Amended by Rule No. 3764, Sep. 27, 2010>
2. The head of a non-homeowner household with four or more minor children under the Civil Act: A housing unit with an exclusive use area of more than 85 square meters. <Amended by Rule No. 3764, Sep. 27, 2010>

Article 6-2 (Criteria for Real Property and Automobiles Owned by Tenants) As to the criteria for real property and automobiles owned by tenants of housing units for long-term lease on a deposit basis under Article 4, the criteria publicly notified by the Minister of Land, Transport and Maritime Affairs pursuant to Article 32-2 (6) of the Rule on Housing Supply (hereafter referred to as the "Criteria" in this Article) shall apply. In such cases, a housing unit with an exclusive use area of not more than 60 square meters shall be treated in the same manner as a national rental housing unit under Article 2 (2) of the Criteria, while only the value of real estate under Article 2 (1) 1 of the Criteria shall apply as to a housing unit with an exclusive use area of more than 60 square meters. <Newly Inserted by Rule No. 3764, Sep. 27, 2010>

Article 6-3 (Surcharge to Persons whose Income Exceeds Income Criteria at Renewal of Contract) (1) If the tenant of a housing unit for long-term lease on a deposit basis fails to meet the income criteria under Article 6 (1), the managing entity shall impose an amount calculated by multiplying the renewed contract amount as of the renewed contract date by the surcharge rate, according to the degree of exceeding the following income criteria, in addition to the lease deposit: <Newly Inserted by Rule No. 3764, Sep. 27, 2010>
Excess rate of income criteriaSurcharge rateExcess income earner's initial renewal of contract Excess income earner's second or subsequent renewal of contract10% or less100%105%More than 10% but not more than 30%105%110%More than 30% but not more than 50%110%120%

(2) If the rate of tenant's income in excess of the criteria under paragraph (1) exceeds 50 percent, the managing entity shall evict the tenant within six months from the end of the lease term. <Newly Inserted by Rule No. 3764, Sep. 27, 2010>

Article 7 (Timing and Procedure for Selection of Tenants) (1) The timing for the selection of tenants shall be determined by the managing entity, taking into consideration the time to supply housing units, the volume of supply, etc.
(2) The housing unit (the building number and the unit number of the housing unit) for a person eligible for the tenancy of a housing unit for long-term lease on a deposit basis shall be determined through an electronic lottery.
(3) When the managing entity intends to select tenants pursuant to Article 6, it shall establish a plan for the supply of housing units for long-term lease on a deposit basis, report it to the Mayor, and then select tenants in accordance with the procedure provided for in Article 8 of the Rule on Housing Supply.
(4) The invitation of tenants shall be carried out in accordance with the procedures for the public notice of invitation, the reception of subscriptions, the announcement of persons eligible for the examination on documentation, the announcement of selectees, and the execution of contracts. <Amended by Rule No. 3764, Sep. 27, 2010>

Article 8 (Tenancy Contract, etc.) (1) The initial lease term of a housing unit for long-term lease on a deposit basis shall be two years, but a person who maintains the qualification for tenancy may have his/her contract renewed for another two years consecutively up to 20 years maximum. In such cases, a person who becomes a selectee for a second or subsequent time shall not be permitted to have his/her tenancy period exceed 20 years, including his/her previous tenancy terms.
(2) Each tenancy contract shall clearly stipulate terms and conditions for the management of tenants under Article 9 and the termination of contract and eviction under Article 10.
(3) The managing entity shall verify whether a person otherwise eligible for tenancy owns a residential house in accordance with the method and procedure under Article 21-2 (1) of the Rule on Housing Supply before entering into a contract.
(4) The managing entity may clearly stipulate terms and conditions of compensation for damage caused by unauthorized occupancy upon the cancellation or termination of contract in the contract and claim the compensation for such damage.

Article 9 (Management of Tenants) (1) The managing entity shall manage data about subscriptions, candidates for selection and the information about tenants by electronic computer media.
(2) The managing entity shall survey the actual state of each tenant (including members of his/her household) at least twice for six months after he/she moves into a housing unit and then at least twice a year thereafter and shall take legal measures, such as eviction, if a breach of the contract is discovered. In such cases, a consolidated patrol caretaker system or any similar system may be introduced and operated in a reasonable manner, taking into consideration the number of households in each complex. <Amended by Rule No. 3764, Sep. 27, 2010>
(3) The managing entity shall examine, at least once a year after a tenant commences occupation of a housing unit, whether the tenant (including members of his/her household) owns a residential house. In such cases, Articles 21-2 and 22 of the Rule on Housing Supply shall apply to the procedure and method for the examination.
(4) When the managing entity gives public notice of the invitation of tenants, it may invite tenants separately for housing units at lower floors (first and second floors) and permit a move if a tenant (including any member of a household) desires to move into a housing unit at a lower floor (first to third floors) due to a disability or illness within the extent of supplies as much as possible. <Amended by Rule No. 3764, Sep. 27, 2010>
(5) If a tenant vacates a housing unit for long-term lease on a deposit basis upon marriage, divorce, or death, a person who succeeds to the leasehold (who shall meet the requirements for the qualification for tenancy), among remaining member of his/her household, may be permitted to reside in the housing unit for long-term lease on a deposit basis continuously if the person requests to have the title to the leasehold conveyed, and such a person may reside in the housing unit for 20 years maximum, including the previous period of residence.
(6) If necessary for the election and management of tenants, the managing entity may request a related institution to furnish it with electronic information data about the resident registration of subscribers and the current status of real property and automobiles owned by them. <Newly Inserted by Rule No. 3764, Sep. 27, 2010>

Article 10 (Termination of Contract, Eviction, etc.) (1) If any of the following events and causes affects a tenant, the managing entity shall terminate the contract and evict such a tenant:
1. If a tenant acquires another housing unit during his/her lease term;
2. If it is discovered that a tenant has transferred or sublet his/her leasehold of the housing unit for long-term lease on a deposit basis to other person;
3. If a tenant breaches any other term or condition of the contract, which constitutes a cause of eviction.
(2) If an event or cause under paragraph (1) 1 or 3 affects a tenant, the managing entity shall evict the tenant within six months from the day on which the event or cause occurs, while if an event or cause under paragraph (1) 2 affects a tenant, it shall evict the tenant without delay and then take measures against the sublessee in accordance with the Rental Housing Act.

Article 11 (Terms and Conditions of Lease) (1) The lease price for a housing unit for long-term lease on a deposit basis shall be determined by the managing entity in accordance with subparagraph 7 of Article 2: Provided, That the lease price for rental housing units built with subsidies from the national treasury or the National Housing Fund shall be determined in accordance with public announcement by the Minister of Land, Transport and Maritime Affairs (standard lease deposit and standard rents for national rental housing).
(2) If a housing unit becomes vacant in a complex of housing units supplied to invited tenants and so the housing unit shall be supplied again to another tenant within one year from the public notice date of the invitation, it shall be supplied at the lease price for the initial supply, while a housing unit that becomes vacant thereafter may be supplied after resetting the lease price which shall not exceed 80 percents of the current market price in the neighborhood.
(3) The lease price may be adjusted in accordance with the guidelines for demand for increase of rent, etc. under Article 2 of the Enforcement Decree of the Housing Lease Protection Act: Provided, That if the income of a tenant of a housing unit for long-term lease on a deposit basis, which has been supplied pursuant to Article 6 (1), exceeds the income criteria for tenancy at the time the contract is renewed, a surcharge shall be imposed upon the tenant in addition to the lease deposit or the tenant shall be evicted in accordance with Article 6-3. <Amended by Rule No. 3764, Sep. 27, 2010>
(4) The managing entity may adjust the lease price of housing units for long-term lease on a deposit basis to an appropriate level in response to the fall of housing prices and changes in the housing market.

Article 12 (Maintenance and Repair of Housing Units) (1) The bearing of repairing costs required for a housing unit for long-term lease on a deposit basis or any of its auxiliary facilities due to wears and tears of or damage to the housing unit or the facility during the lease term shall be stipulated by contract.
(2) When a tenant vacates a housing unit, the managing entity may inspect the degree of damage to wall papers and floor linoleum in the interior of the housing unit and may demand the leaving tenant to pay the costs thereof or replace them with new ones.

Article 13 (Tenants' Liability) If any part of a facility is damaged by a tenant's inadvertence, the tenant shall restore the part to its original state on his/her own account.

Article 14 (Accumulation of Special Repairing Reserve, etc.) The managing entity shall accumulate and manage a special reserve for repairing each month from the day immediately after the first anniversary of the completion of housing units for long-term lease on a deposit basis so as to appropriate the reserve for costs and expenses for the replacement and repair of main facilities of the housing units, and Article 30 of the Enforcement Decree of the Rental Housing Act shall apply mutatis mutandis to the rates, the procedure for spending, etc.

Article 15 (Use of Welfare Facilities, Buildings, etc.) The managing entity may allow the head of the competent local government to use, free of charge, welfare facilities, community support facilities, etc. in a complex of housing units for long-term lease on a deposit basis.

Article 16 (Business Guidance, etc.) The Mayor may provide the managing entity with written or on-site business guidance for general matters concerning the supply and management of housing units for long-term lease on a deposit basis.

Article 17 (Managing Entity's Detailed Regulations) The managing entity may establish and enforce its own detailed regulations on the supply and management of housing units for long-term lease on a deposit basis in compliance with relevant Acts, subordinate statutes, and this Rule.

ADDENDA
Article 1 (Enforcement Date)
This Rule shall enter into force on the date of its promulgation.
Article 2 (Applicability of Guidelines for Deduction of Points)
The guidelines for the deduction of points under Table 1 shall be applicable to the persons who enter into a contract in accordance with the public notice given of the invitation of tenants after November 30, 2007: Provided, That the foregoing shall not apply to cases where a person who met the income criteria and was eligible for tenancy at the time he/she moved in a housing unit in accordance with the proviso to Article 11 is evicted because his/her income exceeds the criteria.
Article 3 (Transitional Measure concerning Supply of National Housing Units, etc.)
Notwithstanding subparagraph 2 of Table 1, if national housing units under the Rule on Housing Supply are supplied as housing units for long-term lease on a deposit basis, such housing units shall be supplied in the manner prescribed in Article 11 of the aforesaid Rule until June 30, 2010. In such cases, the volume supplied shall not exceed 15 percent.
ADDENDA <Rule No. 3764, Sep. 27, 2010>
Article 1 (Enforcement Date)
This Rule shall enter into force on the date of its promulgation.
Article 2 (Applicability of Criteria for Income, Real Property, and Automobiles)
The amended provisions of Articles 6 through 6-3 shall apply to public notice of the invitation of tenants given on or after this Rule enters into force.