"Rent Increase Cap, 3-Year Lease Protection" Legislation Halted! Ministry of the Interior Reveals Reason: Potential Side Effects

To promote long-term, stable development of the rental housing market, Taiwan's Ministry of the Interior passed a draft amendment to the "Rental Housing Market Development and Management Act" at its ministerial meeting in September last year. The proposed revisions were centered on three key directions: "guaranteeing a 3-year lease term," "limiting rent increases upon renewal," and "strengthening protections for both landlords and tenants." However, the Ministry recently decided not to include the first two measures, citing concerns that they might discourage landlords from renting out their properties, potentially causing adverse side effects on the rental market. The Ministry explained that after ongoing discussions with relevant groups, consensus has been reached on certain aspects of the draft, and it will continue engaging with all sectors of society.

According to a report by the Economic Daily News, the Ministry's draft amendment originally included provisions for "3-year lease protection" and "limits on rent increases at renewal." However, due to concerns that these measures might undermine landlords' willingness to rent, potentially disrupting the rental market, these two proposals have been shelved and will not be included in the current round of legislative revisions.

What rights do tenants gain? Landlords can no longer arbitrarily raise rents mid-lease

The Ministry of the Interior issued a press release today (22nd) stating that the draft amendment to the "Rental Housing Market Development and Management Act" has already been submitted to the Executive Yuan for review in April this year. The Ministry will first proceed with revisions on aspects where broad societal consensus exists, including strengthening tenant protections and clarifying landlords' rights to legally reclaim properties, aiming to steadily improve the rental system while balancing market stability and the rights of both parties. The draft legislation was developed through continuous discussions with relevant groups, focusing on areas of agreement. The Ministry emphasized that it will continue communicating with all sectors of society.

Regarding tenant protections, the Ministry stated that it has addressed the most pressing concerns for renters. Specifically, landlords are now prohibited from restricting tenants' applications for rental subsidies, household registration, or tax deductions for rental expenses in any way. Additionally, landlords may not arbitrarily increase rent during the lease term. Violations of these rules will render the relevant clauses invalid and may result in administrative penalties. Furthermore, landlords must now proactively inquire about tenants' intentions to renew the lease before it expires, and tenants are required to respond within a specified timeframe. This ensures both parties can confirm renewal intentions early, reducing disputes and allowing smoother arrangements for alternative housing if needed.

What if tenants are problematic? Landlords gain clearer rights to reclaim their property

On the issue of protecting landlords' rights, the Ministry stated that new provisions have been added allowing landlords to terminate leases early if tenants repeatedly fail to pay rent, engage in illegal activities on the premises, or seriously disrupt peace and order. In cases where tenants refuse to return the property after a lease has legally ended, the Ministry initially considered enabling enforcement through notarization law. However, after discussions with the Judicial Yuan, it will instead adjust the legislation to allow enforcement following dispute mediation, aiming to shorten the time required for landlords to reclaim their properties. The Ministry will continue to convene meetings with the Judicial Yuan, relevant ministries, and local governments to further discuss these mechanisms.

The Ministry emphasized that its legislative direction—strengthening protections for both parties and ensuring stable, secure rental housing—remains unchanged. For now, it will proceed with revisions on areas of societal consensus, while swiftly discussing and refining details related to dispute mediation and enforcement mechanisms. The revised draft will then be resubmitted to the Executive Yuan for continued review, aiming to improve the rental market system and provide the public with a safer, more stable rental environment.