SOUTH KOREA Law and Practice Contributed by: Hyeon Kang, Tae Kyoon Kim, Seungil Hong and Sung-Ho Moon, Bae, Kim & Lee LLC
6.19 Right to Terminate a Lease A common reason for a landlord to terminate a lease is a tenant’s failure to make timely rent payments, or the tenant’s alteration of the real estate without approval from the landlord. On the other hand, a common reason for a tenant to terminate a lease is the landlord’s transfer of the real estate to a third party. In such cases, the landlord may negotiate with the tenant to insert a clause in the lease agreement permitting the landlord to freely transfer the real estate as long as the transferee (ie, the third party) agrees to accept all the terms and conditions of the lease agreement. 6.20 Registration Requirements There are no registration requirements or par - ticular execution formalities for leases. However, in order for the tenants to protect their leasehold interest from third parties, tenants are advised to record their leasehold interest in the registry (in practice, and in many cases, leases are recorded in the real estate registry). In addition, the tenant must pay a recording tax of 0.24% (inclusive of surtax) of the monthly rent payable to the land - lord and a recording fee of KRW15,000 for the real property. 6.21 Forced Eviction A tenant may be forced to leave if they are late paying rent, but the CBLPA stipulates that the tenant cannot be forced to leave until the delayed rent payments amount to, or exceed, triple the periodic rent payments (eg, three months’ rent in the case of monthly payments). If the tenant refuses to surrender the real estate voluntarily, the landlord may file an eviction law - suit against the tenant. It usually takes about six to ten months for a district court to render a judgment, which may then be appealed to a higher court. In order for the landlord to avoid
tenants (ie, lease agreements cannot contain provisions that are less favourable to tenants than as set forth in the relevant special law). As described in 6.3 Regulation of Rents or Lease Terms , legislative amendments were made to the CBLPA in 2020 to mitigate the impact of the COVID-19 pandemic. 6.15 Effect of the Tenant’s Insolvency A lease term that stipulates the tenant’s insolven - cy as a cause of termination is invalid because it is inconsistent with the DRBA, which provides that the insolvent company has the right to elect either to terminate or keep the contract effective. 6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations In most cases, a security deposit in cash is pro - vided as security to a landlord to protect against a failure by the tenant to meet its obligations under a lease. A letter of guarantee issued by a financial institution may replace the security deposit in cash in rare cases. 6.17 Right to Occupy After Termination or Expiry of a Lease A tenant has the right to continue to occupy the leased real estate until the security deposit is returned by the landlord, even after the expira - tion of the lease. Therefore, the landlord needs to be prepared to return the security deposit to the tenant on the date originally agreed. 6.18 Right to Assign a Leasehold Interest Tenants and sub-tenants may assign their lease - hold interest with the consent of the landlord; however, it is extremely rare in practice for such consent to be granted by the lessors.
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