[Ryu Taemin's Real Estate A to Z] "Lease Contract Still Active"... What If the Landlord Passes Away?

Inheritance of Rights and Obligations by Heirs upon Landlord's Death
Return of Jeonse Deposit to Successful Bidder after Auction
Lawsuit for Jeonse Deposit Refund if Bidder Refuses
Tenant May Directly Participate in Auction

[Asia Economy Reporter Ryu Tae-min] Tenant A recently heard that the owner of the house he was living in under a jeonse (long-term lease) had passed away. With plenty of time left before the jeonse contract ends, he is losing sleep over worries that he might not be able to get his jeonse deposit back as the landlord’s real estate is going to auction.

When a landlord suddenly dies like this, tenants face great confusion. They may not know whether the remaining jeonse or monthly lease contracts are still valid and may feel anxious about the difficulty of getting their jeonse deposit refunded. Simply put, the heir inherits the landlord’s rights and obligations, so the existing lease contract remains valid, and when the contract expires, the tenant can get the jeonse deposit back from the heir.

However, the problem arises if the heir renounces the inheritance. In this case, the auction process proceeds through an estate administrator. An estate administrator is a property manager appointed by the family court to manage and liquidate the inherited property when there are multiple heirs or no heirs. This procedure also applies if there is no family to inherit the landlord’s property or if the landlord is a single-person household who cannot be contacted. If the house is sold at auction through this process, the existing tenant can get the jeonse deposit back from the new owner. If the successful bidder refuses to return the jeonse deposit, the tenant can file a lawsuit against the bidder to recover the deposit.

During this process, the tenant can directly participate in the auction and bid for the house. It is a heavy burden for the tenant to prepare the new auction payment while not having received the jeonse deposit, but in this case, it is possible to offset the required auction payment with the deposit that should be refunded. If the auction price is higher than the jeonse deposit, the tenant only needs to pay the difference.

If the remaining period of the jeonse contract is short when the landlord dies, the tenant must apply for a leasehold registration order. Attorney Eom Jeong-sook of Beopdo Comprehensive Legal Office explained, “The tenant must apply for the leasehold registration order so that even if they move out when the contract period ends, their right to claim the jeonse deposit against the new successful bidder is maintained.”

Conversely, if the tenant dies during the lease contract period, the tenant’s rights and obligations are inherited by the heirs in the same way. Attorney Eom said, “The spouse, children, or common-law partner who lived with the tenant become heirs. In the case of a common-law partner, if there are no relatives within the second degree of kinship (parents or siblings), the partner solely inherits the leasehold rights; if there are relatives within the second degree, the tenant’s rights and obligations are inherited jointly.”

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