Landlord Who Evicted Tenant for "Actual Residence" Reason and Sold Apartment... Court Rules "Must Compensate"

Seoul Central District Court, Seocho-dong, Seoul. Photo by Asia Economy DB

[Asia Economy Reporter Choi Seok-jin, Legal Affairs Specialist] A court ruling has recognized the landlord's liability for damages after evicting a tenant who wanted to extend the lease by stating they would move in themselves, and then disposing of the apartment to another person.

Under the Housing Lease Protection Act, there is a provision requiring landlords who refuse a tenant's lease renewal request on the grounds of actual residence to compensate the tenant for damages, but there is no provision regarding the sale of the house. This ruling holds that even in such cases, the landlord’s refusal of the tenant’s lease renewal request without justifiable reason can be considered unlawful.

According to the legal community on the 24th, Judge Jeong Jin-won of Civil Division 42 at the Seoul Central District Court recently ruled partially in favor of the plaintiffs, tenant A and their family, in a damages claim lawsuit against landlord B.

The court ordered B to pay a total of 28.61 million KRW, considering the additional monthly rent of 1.5 million KRW, moving expenses, and brokerage fees that A’s family had to bear when renting another house.

A signed a lease contract with B in December 2019 for an apartment in Seocho-gu, Seoul, with a deposit of 1.24 billion KRW and a two-year residence term.

As the contract expiration date approached, A requested a lease renewal in October 2021, but B refused, stating that they would move in themselves.

A’s family found a new home under more expensive conditions: a deposit of 1.3 billion KRW and monthly rent of 1.5 million KRW. They also paid brokerage fees of 5.8 million KRW and moving costs of 2.81 million KRW.

However, contrary to the landlord’s claim of actual residence, A’s family discovered that B had sold the apartment for 3.67 billion KRW without moving in, and filed a lawsuit against B.

Article 6-3 (Lease Renewal Requests, etc.) Paragraph 1 of the Housing Lease Protection Act stipulates that if a tenant requests a lease renewal during the period from six months to two months before the lease term ends, the landlord cannot refuse without justifiable reason. It also enumerates cases where the landlord may refuse, including ▲tenant’s arrears of two terms’ rent ▲mutual agreement to provide substantial compensation to the tenant ▲unauthorized sublease by the tenant without landlord’s consent ▲intentional damage to the leased property ▲demolition or reconstruction of the building ▲landlord (including landlord’s direct ascendants or descendants) intending to actually reside in the leased property (item 8).

Paragraph 5 of the same article states, "If the landlord refuses renewal for the reason in item 8 of Paragraph 1 but leases the property to a third party without justifiable reason before the period that would have been renewed expires, the landlord must compensate the tenant for damages caused by the refusal." This explicitly stipulates the landlord’s liability for damages when refusing a lease renewal request on the grounds of actual residence, evicting the tenant, and then leasing to a third party.

The court stated, "The defendant’s actions violated the Housing Lease Protection Act by refusing the lease renewal without justifiable reason, infringing on the tenant’s right to request renewal, constituting an unlawful act."

Under the Housing Lease Protection Act, landlords cannot refuse a tenant’s lease renewal request without justifiable reason. The court held that B’s refusal of the tenant’s renewal request for reasons not stipulated by law can be regarded as an unlawful act under civil law.