"Changed Landlord After 'Lease Renewal' Request... Supreme Court Rules 'Rejection Possible If Owner Resides'"

First Supreme Court Ruling on 'Contract Renewal Request and Refusal'... "Independent Exercise of Renewal Refusal Right"
'Actual Residence Purpose Within 2-6 Months Before Contract Termination'... Conflicting Lower Court Decisions Summarized

[Asia Economy Reporter Heo Kyung-jun] The Supreme Court has made its first ruling that a new owner who purchased a house after a tenant requested a lease renewal can refuse the renewal request if the purpose is for 'actual residence.' Lower courts had conflicting judgments on whether the right to refuse should be recognized when the landlord changes after the renewal request, but the Supreme Court has now issued its first explicit ruling.

The Supreme Court's 3rd Division (Presiding Justice Noh Jeong-hee) overturned the original ruling that dismissed the lawsuit filed by the new owner A against tenant B for building delivery and remanded the case to the Seoul Central District Court, the court announced on the 19th.

Before the lease contract expired, on October 16, 2020, B requested a lease renewal from the landlord C. Subsequently, C sold the house to the new owner A, and the ownership transfer registration was completed on October 30.

A notified B in November of the same year, within the period when refusal of renewal is possible, that he would not renew the lease as he intended to reside in the property himself. B filed a lawsuit, refusing to accept this.

According to the Housing Lease Protection Act, even if a tenant requests a lease renewal, the landlord can refuse the renewal if they intend to reside in the property themselves.

The first trial court ruled that the deposit should be returned and the building delivered simultaneously on the lease expiration date, but the second trial court judged that A could not refuse the lease renewal. It reasoned that at the time of the renewal request, C did not intend to reside in the property himself, so he could not refuse the renewal. Since A had not completed the registration at that time and was not in the position of landlord, he also could not refuse the renewal.

However, the Supreme Court ruled that if the apartment was purchased for the purpose of actual residence, the lease renewal can be refused. It also stated that the judgment should be based on whether the refusal was made within the legally proper refusal period under the Housing Lease Protection Act (6 months to 2 months before the lease ends).

A Supreme Court official explained, "A person who succeeds to the landlord's position (the new owner) can independently exercise the right to refuse renewal separately from the previous landlord, and whether the refusal based on the new owner's actual residence is justified should be judged based on whether the refusal was made within the legally proper refusal period under the Housing Lease Protection Act. This applies even if the new owner succeeded to the landlord's position after the tenant exercised the renewal request right against the previous landlord."

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