Restriction on Assignment of Lease
Restriction on assignment of a lease
- A lessee can assign his/her lease to another party through a contract only with the lessor's consent. The lessor can rescind the lease contract if the lease transfer is made without his/her approval (Article 629 of the Civil Act).
Assignment of Lease with Lessor's Consent
Effect of assignment
- The lessee who assigns his/her lease to another party (i.e., assignee) is deemed to transfer their rights and obligations as stipulated in the lease contract to the assignee.
Acquisition of opposing power and preferential payment right
- When the lessee (i.e., assignor) has the opposing power, the assignee can also resist a third party, such as a successor to the lessor, who may try to take out a mortagage on the leased property.
Assignment of Right of Lease without Consent of Lessor
A juristic relation between the lessee (assignor) and the assignee
- A contract for the assignment of a lease betwen the lessee and another party is only valid with the lessor's consent, and therefore the lessee must obtain the lessor's consent for the assignee (Supreme Court Decision 85Daka1812 Decided February 25, 1986 and Supreme Court Decision 94Da41003 Decided June 14, 1996).
A juristic relation between the lessor and the lessee (Right of rescission)
- The lessor may rescind the lease contract if the lessee assigns the lease to another party without his/her consent (Article 629 (2) of the Civil Act).
A juristic relation between the lessor and the assignee (Acquisition of opposing power)
- Since the assignment of a lease without the lessor's consent is null and void, the assignee's occupation of the leased property is deemed illegal and the lessor can demand its return as the owner of the leased property (Articles 213 and 214 of the Civil Act).