Abstract
Rent includes the cost of leasing, thus management fees are also included in the rent. Of course, the parties can agree that rent represents the net leasing income and separately agree on the management fees. However, even if the parties have agreed separately on the rent and management fees, the landlord cannot be allowed to evade obligations related to the rent through the management fees. Therefore, it is not justifiable to increase management fees over rent to avoid reporting monthly rent or to increase management fees instead of rent to bypass the restrictions on rent increase rates, under the pretext that management fees are not considered rent. To solve this issue, the following measures should be established: When collecting management fees separately from rent, it is necessary to exclude the management fees received by the landlord from the necessary expenses deducted from the rent for the calculation of rental income, or to include the management fees collected beyond the necessary expenses into the rent. The Residential Lease Protection Act limits the rate of rent increase to 5%, based on the assumption that the rent includes management fees. Therefore, when assessing compliance with the rent increase rate, it is necessary to calculate the increase rate by combining both rent and management fees. Amendments to the Collective Building Act should be made to mandate the disclosure of management fees not only by the managers but also by the management companies.
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