Is the '4-Year Jeonse' Becoming Standard? Tenant Residence Rights Win Priority in Consecutive Rulings

The view of the surrounding apartment complexes from Seoul Sky, the observation deck of Lotte World Tower in Songpa-gu, Seoul, on the 29th of last month

Can the bill proposing to extend the fixed two-year residential lease contract period, which has been established for over 30 years, to four years take hold as intended?

Even if the tenant announced their intention to reside and the buyer purchased the property believing the tenant would move out, a ruling has been made that if the tenant requested a contract renewal from the previous owner before the ownership transfer, the tenant's right to renew the contract is recognized.

According to the amended Housing Lease Protection Act, which took effect on July 31 last year, tenants can request to extend the lease contract for an additional two years once, and rent increases upon contract renewal are limited to within 5%. However, if the landlord intends to reside in the property, the tenant's right to renew can be denied.

On the 4th, according to the real estate and legal sectors, former owner Mr. A signed a two-year apartment lease contract with tenant Mr. B from March 25, 2019, to March 24, 2021. Later, Mr. A signed a sales contract with buyer Mr. C on July 28, 2020 (before the implementation of the Three Lease Laws) and received the deposit on the same day.

Buyer Mr. C informed tenant Mr. B of his intention to reside in the property when signing the sales contract with former owner Mr. A. The tenant did not raise any objections.

After completing the ownership transfer registration on November 3, 2020, buyer Mr. C requested tenant Mr. B to move out the following day.

However, tenant Mr. B refused to move out, stating that on October 27, 2020, he had requested a contract renewal via text message to former owner Mr. A.

Buyer Mr. C filed an eviction lawsuit demanding the house be vacated.

Tenant Mr. B countered, saying, "Since I requested a renewal by text to former owner Mr. A six days before buyer Mr. C acquired ownership, I can live for another two years."

Judge Gwak Dong-woo of the Suwon District Court Civil Division 6 stated, "A tenant of a house can exercise the right to request contract renewal once, and unless the landlord has special reasons stipulated by law (Housing Lease Protection Act), the landlord cannot refuse this contract renewal request," adding, "Therefore, unless there are special reasons to refuse renewal, it is reasonable to recognize the effect of contract renewal upon exercising the right to request renewal."

He further said, "This legal principle applies even when the landlord's status is succeeded during the lease period," siding with tenant Mr. B.

Earlier in March, in the first ruling related to the right to request contract renewal, the court prioritized the tenant's residential stability. It ruled that if the tenant exercised the right to request contract renewal for extending the lease with the previous landlord, the new landlord cannot demand the tenant vacate the property even if the new landlord intends to reside there.

At that time, the variable was the 'registration timing.' The court's judgment was that if the tenant exercised the right to request contract renewal with the previous landlord before the buyer completed the ownership transfer registration, the buyer has no right to refuse the tenant's contract renewal request.

Some have pointed out that this could increase market confusion.

Attorney Jeong Min-kyung of the law firm Myeongdo said, "In real estate transactions, there is generally a significant gap between the contract date and the payment date, and actual residence is a very important condition in sales contracts," adding, "It is worth considering whether the buyer's rights changing due to newly enacted laws after the sales contract causes distrust in the law."

Meanwhile, in June, a ruling was made that even if a corporation-owned house's landlord intends to reside, the tenant's right to request contract renewal cannot be denied. The court sided with the tenant, citing that corporations, unlike individuals, are not eligible to reside in the property.

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