Landlord "Actual Residence" vs Tenant "Lease Renewal"
First Court Ruling on Lease Renewal Claim Rights
A ruling has been made stating that if an existing tenant exercises the right to request a lease renewal before the ownership transfer registration of a house with an expiring jeonse contract, the buyer cannot move in even if they intend to reside there. This is the first ruling related to the scope of the lease renewal right since the new Housing Lease Protection Act came into effect in July last year.
According to the real estate industry on the 24th, recently, Judge Yoo Hyun-jung of the Civil Division 2 at Suwon District Court ruled against landlord A in a building delivery claim lawsuit filed against tenant B.
In August last year, A purchased a house in Suji-gu, Yongin, Gyeonggi Province for the purpose of actual residence. Tenant B had been living in this house under a jeonse contract with the previous owner C from February 2019 to February 2021. When C told B that the buyer wished to reside in the house, B expressed an intention to move out, saying "I will look for a new place."
However, one month after the contract between the landlord and the buyer was signed, B suddenly exercised the right to request a lease renewal, stating "I will extend the jeonse contract." This led to a conflict between the tenant's right to request a lease renewal and the buyer's right to refuse renewal for actual residence.
The court ruled in favor of B. The court stated, "Before the buyer completed the ownership transfer registration, tenant B exercised the right to request a lease renewal with the previous owner C," and "Buyer A, who succeeded this right, does not have the right to refuse the lease renewal request."
As disputes between landlords and tenants over the lease renewal right have been increasing since the new Housing Lease Protection Act was implemented, rulings and mediation cases favoring tenants have been continuously emerging, raising concerns that landlords' property rights are being excessively infringed upon in the rental market. In particular, houses with tenants who can exercise the lease renewal right are expected to become less popular due to uncertainties regarding actual residence.
Meanwhile, according to the Korea Legal Aid Corporation, a total of 155 mediations related to rent increases and lease renewals were filed with the Housing Lease Dispute Mediation Committee last year, more than three times the 48 cases in the previous year. Especially, consultations related to the lease law increased to 11,589 cases, more than double the 4,696 cases from the previous year. The number of mediations and consultations was similar to the previous year until the first half of the year but surged after July.
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