Jeonse Lease Remains Valid Even After Landlord Changes... Timing of Termination Is Key

Housing Lease Protection Act: New Landlord Must Assume Obligations
Immediate Termination May Complicate Deposit Recovery
Attorney Um Jung-sook: "Be Cautious About When to Terminate"

A real estate agency in downtown Gwangju. Photo by Song Bohyun

Kim, a 35-year-old tenant with a jeonse lease, recently became anxious after being notified that the ownership of her home had changed. Worried about the possibility of not getting her deposit back, she immediately considered terminating the contract.

However, according to the Housing Lease Protection Act, even if the landlord changes due to a sale, inheritance, gift, or auction, the existing jeonse contract remains valid. The new landlord must assume all the obligations of the previous landlord.

Um Jung-sook, a real estate attorney at Beopdo Law Firm, explained, "Tenants are protected even if the property is sold, inherited, gifted, or auctioned off," and added, "The new landlord must honor the terms of the existing contract."

The issue arises at the point of termination. Attorney Um stated, "If you terminate the contract immediately after learning about the change in ownership, you must file a lawsuit against the previous landlord to recover your deposit. If the previous landlord has already disposed of the property and no longer has assets under their name, it may be difficult to actually recover the deposit even if you win the case." On the other hand, if you maintain the contract and the new landlord fails to return the deposit upon expiration, "you can recover your deposit before other creditors based on your preferential repayment right," she emphasized.

However, there are exceptions if the collateral value is less than the deposit. In such cases, you may consider notifying the previous landlord of the termination and filing a lawsuit for the return of the deposit.

Case law also states that if a tenant does not raise an objection within a reasonable period after learning of the change in landlord, it is regarded as accepting the new landlord. The Supreme Court has ruled, "If a tenant does not want the new landlord, they must raise an objection within a reasonable period from the date they become aware of the transfer."

Attorney Um added, "The larger the deposit, the greater the loss from giving up the preferential repayment right, so it is generally advantageous to maintain the contract. However, if the new landlord attempts to change the contract terms or if there are doubts about their ability to return the deposit, immediate termination may be considered."

If you decide to terminate the contract, you must clearly communicate your intention in writing and specifically agree on the method and timing of the deposit's return. It is also important to check whether the existing contract includes a termination clause in the event of a change in landlord.

Attorney Um said, "There is no need to be anxious just because the landlord has changed. To keep your deposit safe, you should carefully decide when and how to terminate the contract."