Renewal of Lease Contract by Agreement between Parties to Contract
Renewal of contract by agreement
- A lessor and a lessee may agree to renew a lease contract with changing the conditions, term, etc. of the lease contract, or under the same conditions of the preexisting lease around the time when the term of the lease expires.
Effect of renewal by agreement
- The effect of a renewal by agreement shall be determined by the details of the agreement.
- A renewal by agreement with any change in the conditions of a lease contract shall not oppose against a third party who has an interest in the preexisting lease in terms of the changed conditions. Where the security deposit for lease increases, a lessee shall obtain the fixed date on the lease contract in order to acquire the preferential repayment right from junior obligees.
Implied Renewal under Housing Lease Protection Act
Requirements for an implied renewal: Failing to notify of a refusal of the renewal or any change in the contract conditions
- Supposethe lessor fails to notify the lessee of his/herrefusal of contract renewal, or that the lessor would not renew thecontract unless modifications have been made to thecontract conditions six to two months (Applicable from the first lease concluded or renewed after December 10, 2020) before the expirationof the lease contract period. In this case, it shall be deemed that the leasecontract is renewed under the same conditions as the previous lease contract.The same requirement applies if the lessee fails to notify the lessor twomonths before the expiration of the lease contract period. (Article 6(1) and Article 2 of the supplementary provisions <Act No.17363, June 9, 2020> of the Housing Lease Protection Act).
- If a lessee falls behind with the rent by up to two installments or seriously violates obligations under the lease contract, an implied renewal shall not be applicable (Article 6(3) of the Housing Lease Protection Act).
Effect of implied renewal
- If a housing lease contract is renewed by implication, the lease shall be deemed to have been renewed under the same conditions as the former one (The former part of Article 6 (1) of the Housing Lease Protection Act).
- If a housing lease contract is renewed by implication, the term of the lease shall be deemed to be 2 years (Articles 4 (1) and 6 (2) of the Housing Lease Protection Act).
Termination of lease contract renewed by implication
- If a housing lease contract is renewed by implication, the lessee may terminate the renewed lease contract at any time or claim the term of the lease of 2 years (Articles 4 (1) and 6-2 (1) of the Housing Lease Protection Act).
- Where a lessee terminates a lease contract, the termination shall enter into force upon the lapse of 3 months from the date when the lessor has received the notification (Article 6-2 (2) of the Housing Lease Protection Act).
Request for contract renewal under the Housing Lease Protection Act
Right to request contract renewal
- Despite the provision on implied renewal under the Housing Lease Protection Act above, the lessor may not refuse it without justifiable reason if the lessee requests renewal of the contract between 6 months and 2 month (Applicable from the first lease concluded or renewed after December 10, 2020) before the end of the lease period. (The main body of Article 6-3(1), the former part of Article 6(1), and Article 2 of the supplementary provisions <Act No.17363, June 9, 2020> of the Housing Lease Protection Act). The lessee can only exercise the right to request contract renewal once, and the term of the renewed lease is deemed 2 years (Article 6-3(2) of the Housing Lease Protection Act).