[Ryutaemin's Real Estate A to Z] Should Tenants Pay Brokerage Fees When Moving Out After Implicit Renewal?

Brokerage Fee Paid by Landlord When Implicit Renewal Contract Ends

[Asia Economy Reporter Ryu Tae-min] Tenant A's lease expired last May. At that time, neither the landlord nor A mentioned anything about renewing the contract. In effect, the contract was automatically extended through an 'implied renewal.' However, recently, A had to move to a new rental house due to a job change. Then, the landlord threatened A, saying, "Pay the brokerage fee for the new tenant before you leave."

In situations where the contract is implicitly renewed, problems arise when tenants terminate the contract and landlords demand brokerage fees for the new tenant or three months' rent as a customary practice. Implied contract renewal means that if neither the landlord nor the tenant reaches any agreement regarding contract extension or terms such as deposit and rent from six months to two months before the contract expires (one month before under the old law), the contract is automatically extended under the same conditions as the existing contract.

However, legally, even in cases of implied renewal, tenants can notify the landlord of contract termination at any time. Article 6-2, Paragraph 1 of the Housing Lease Protection Act states, "After an implied renewal, the tenant may notify the landlord of contract termination at any time." In other words, if the implied renewal contract is terminated during the contract period, the landlord must bear the brokerage fee. However, if there is a special clause related to this in the lease contract, the existing tenant may have to pay the brokerage fee necessary for the landlord to find a new tenant.

Notifying the termination of an implied renewal contract does not mean the deposit can be immediately refunded. Article 6-2, Paragraph 2 of the Housing Lease Protection Act specifies that the effect takes place three months after the landlord receives the notice. In other words, to receive the deposit at the desired time and move to a new house, it is advantageous to negotiate the contract termination date in advance.

Even if the tenant rightfully notifies contract termination, there are cases where the landlord is unreachable or refuses to return the deposit, claiming there is no new tenant. In such cases, the tenant can file a lawsuit for contract termination and deposit refund. Depending on the case, the deposit can also be recovered through a simplified procedure called a payment order instead of a lawsuit.