[Ryu Taemin's Real Estate A to Z] What If You Didn't Receive the 'Long-Term Repair Reserve' After Moving?

Landlord Payment Is the Principle... Included in Maintenance Fees for Convenience
Claims Possible Within 10 Years Even If Not Refunded on Moving Day
New Landlord Succeeds Even If Owner Changes During Contract Period

[Asia Economy Reporter Ryu Tae-min] Recently, Mr. A found out that he had not received the long-term repair reserve fund from the apartment where he previously lived as a tenant. Since it was included in the maintenance fee, he naturally thought that, as a tenant, he had to pay it. However, since several years had already passed and the owner of the house had changed just before he moved out, Mr. A felt anxious that he might not be able to get it back.

In cases where the lease contract has ended, tenants often experience great confusion due to a lack of proper knowledge about the refund of the long-term repair reserve fund. The term itself is unfamiliar, and tenants tend to focus only on moving, often failing to properly claim this money.

The long-term repair reserve fund refers to the money set aside to repair major facilities in apartment complexes or residential officetels. It covers costs needed to repair or replace aging shared facilities such as plumbing or elevators. According to Articles 29 and 30 of the Act on the Management of Multi-Unit Housing, this applies to multi-unit housing with 300 or more households, or multi-unit housing with centralized heating systems or installed elevators.

Although it is originally the owner’s responsibility to pay the long-term repair reserve fund, it is common practice to include it in the maintenance fee for convenience. Article 31 of the Enforcement Decree of the Act on the Management of Multi-Unit Housing states, "If the owner of the multi-unit housing has the user (tenant) pay the long-term repair reserve fund on their behalf, the owner must refund that amount." Therefore, when moving out, tenants can receive a refund of the long-term repair reserve fund they paid as part of the maintenance fee from the owner.

Even if the refund is not received immediately upon moving out, tenants can request a refund within 10 years from the contract termination date according to the Housing Act. Additionally, even if the owner changes during the lease period, tenants can claim the long-term repair reserve fund they paid while residing from the new owner. This is because the obligation to refund the long-term repair reserve fund is transferred to the new owner through the sales contract.

If the owner refuses to refund, tenants can file a refund lawsuit. They can send a certified letter to the owner and apply for a payment order at the court. To reduce disputes, many tenants notify the owner in advance during the lease contract and add the long-term repair reserve fund paid during the contract period to the deposit to be refunded.

However, there are cases where the long-term repair reserve fund does not have to be refunded to the tenant. If a special clause stating "the tenant bears the long-term repair reserve fund" was included at the time of the lease contract, the tenant?not the owner?must bear the cost. Also, if the house is transferred through auction, the tenant may not be able to receive the refund. This is because the apartment’s disposal by auction is interpreted as the termination of the existing lease contract. Therefore, tenants cannot claim the refund from the new owner who acquired the property through auction. Of course, tenants can claim the refund from the previous owner, but since the owner’s assets are being forcibly sold through auction due to debt, it is usually difficult to get the money back.