Supreme Court: "Landlords Must Pay Damages if They Re-Rent During the Renewal Period, Even After Living There for Over a Year"

Landlord: "Unforeseeable circumstances left me no choice"
Landlord wins at first trial; ruling overturned by appellate court and Supreme Court

The Supreme Court has ruled that a landlord who refused a tenant’s request to renew a lease on the grounds of owner occupancy cannot claim a legitimate reason based on circumstances that could have been anticipated when the renewal was refused if the landlord rented the home to someone else during the period for which the lease would have been renewed.

The Supreme Court in Seocho District, Seoul. Yonhap News

According to legal circles on October 12, the Supreme Court’s Second Division, presided over by Justice Kwon Young-jun, recently upheld a lower court ruling in favor of Tenant A in the final appeal of a damages lawsuit A filed against Landlord B.

A lived in an apartment owned by B in Seodaemun-gu, Seoul, from September 2020 to September 2022, paying a security deposit of KRW 660 million. As the lease expiration approached, A said they wanted to renew the contract, but B asked A to vacate the home, saying B would live there personally.

B registered the apartment as B’s residence in September 2022, returned to Korea in February 2023, and lived there until April 2024. B then rented the home to a third party for two years, for a security deposit of KRW 820 million. A filed a lawsuit, arguing that B had rented the home to another tenant without a legitimate reason during the period the lease would have continued if it had been renewed.

The Housing Lease Protection Act stipulates that if a landlord refuses to renew a lease on the grounds of owner occupancy but rents the home to a third party without a legitimate reason before the period for which the lease would have been renewed ends, the landlord must compensate the tenant for the resulting damages.

B argued that B had lived in the apartment for nearly two years and had no choice but to rent it to someone else after six tenants in other properties B owned simultaneously demanded the return of their security deposits. B said these circumstances could not have been predicted when the renewal was refused.

The first trial court accepted B’s claim that there was a legitimate reason and dismissed A’s claim. The second trial court, however, overturned that decision and granted A’s claim in full, reasoning, among other things, that B could have sufficiently anticipated the approaching dates for returning the security deposits on the other properties.

The Supreme Court also upheld the decision. The justices found no error in the lower court’s interpretation of the law regarding legitimate reasons.

This content was produced with the assistance of AI translation services.