Accumulating Precedents on Contract Renewal Claims... Market Confusion Persists

According to the Monthly KB Housing Market Trends report released on the 27th by KB Kookmin Bank Liv Real Estate, the housing sale prices in Seoul rose by 1.01% in June, showing a larger increase compared to the previous month (0.80%). Across the entire metropolitan area, the increase expanded from 1.18% last month to 1.63% this month. The five major metropolitan cities, excluding Incheon, also saw a rise in the rate of increase from 0.81% to 1%. Due to these factors, the nationwide housing sale prices increased from 0.96% last month to 1.31% this month.
The photo shows an apartment complex viewed from the Seoul Sky observatory at Lotte World Tower in Songpa-gu, Seoul on the same day.

"What should we do with tenants who stubbornly refuse to move out, insisting on exercising their right to renew the lease?" "The landlord says they want to live in the house themselves and asks us to vacate, but it seems like a lie. Should we prepare for a damages lawsuit?"

It has been more than 10 months since the introduction of the right to request lease renewal and the rent ceiling system for Jeonse and monthly rent, but confusion surrounding these systems and conflicts between landlords and tenants have yet to subside in the market. Recently, as courts have issued a series of related rulings, guidelines are gradually being established, but given the variety of conflict types, there are still relatively few precedents, leaving confusion on the ground.

According to the real estate industry on the 28th, there have been a total of four major court rulings related to the right to request lease renewal up to this date. The most recent court ruling stated that "for houses owned by corporations, landlords cannot refuse tenants' requests for lease renewal even if the landlord intends to reside in the property."

Corporation A claimed, "We will use the house as a corporate office and dormitory for employees," while the tenant argued, "Since the property (house) is owned by a corporation, not a natural person, it does not qualify as actual residence by the landlord." In the subsequent lawsuit, the court sided with the tenant, citing that corporations are not eligible for actual residence.

Earlier, in the first ruling related to the right to request lease renewal issued in March, the court prioritized the tenant's housing stability. The ruling stated that if a tenant exercised the right to renew the lease with the previous landlord, the new landlord cannot ask the tenant to vacate the house even if the new landlord intends to reside there.

The variable factor was the "registration timing." The court ruled that if the tenant exercised the right to renew the lease with the previous landlord before the buyer completed the ownership transfer registration, the buyer has no right to refuse the tenant's lease renewal request.

In April, there was a case where the landlord refused the tenant's lease renewal request citing actual residence but lost the case after signing a contract with a new tenant. In May, the court ruled that if an apartment was purchased before the Housing Lease Protection Act was enforced for the purpose of actual residence, the landlord could refuse lease renewal. While the trend generally favors tenants' right to reside, confusion is expected to continue for some time. Seo Jin-hyung, president of the Korea Real Estate Society (professor at Gyeongin Women's University), said, "There are many parts of the law that can be interpreted ambiguously, which leads to recurring conflicts between landlords and tenants in the market," adding, "The government needs to establish clearer guidelines."

This content was produced with the assistance of AI translation services.