Article 1(Purpose) #
The purpose of this Act is to guarantee the stability of the economic life of people by prescribing exceptions to the Civil Act concerning the lease of commercial buildings.
[This Article Wholly Amended on Jan. 30, 2009]
Article 2(Scope of application) #
(1) This Act shall apply to the lease (including cases where the main part of the leasehold property is used for business purposes) of commercial buildings (referring to buildings subject to business registration under Article 3(1)); provided, in cases of lease the amount of security deposit for which exceeds that prescribed by Presidential Decree following deliberation by the Commercial Building Lease Committee established under Article 14-2, this shall not apply. <Amended on Jul. 31, 2020>
(2) The amount of security deposit under the proviso of paragraph (1) shall be prescribed according to area-based classifications in consideration of the economic circumstances in the relevant areas, scale of the leasehold property, etc., and the amount obtained by multiplying the rental value by the rate prescribed by Presidential Decree in consideration of interest rates charged on loans, etc. of banks under the Banking Act shall be included therein where rent in addition to security deposit exists. <Amended on May 17, 2010>
(3) Notwithstanding the proviso of paragraph (1), Article 3, paragraphs (1) and (2) and the main clause of paragraph (3) of Article 10, Articles 10-2 through 10-9, and Articles 11-2 and 19 shall also apply to the lease exceeding the amount of security deposit provided in the proviso of paragraph (1). <Added on Aug. 13, 2013; May 13, 2015; Sep. 29, 2020; Jan. 4, 2022>
[This Article Wholly Amended on Jan. 30, 2009]
Article 3(Perfection) #
(1) A lease shall become effective against third parties on the day following the date on which a lessee receives the transfer of the relevant building and files an application for the business registration under Article 8 of the Value-Added Tax Act, Article 168 of the Income Tax Act or Article 111 of the Corporate Tax Act even when no registration of the lease exists. <Amended on Jun. 7, 2013>
(2) The transferee of a leased building (including the person who has succeeded to the right to lease) shall be deemed to have succeeded to the position of the lessor.
(3) Where a building which is a leasehold property under this Act is subject to sale and purchase or auction, Article 575(1) and (3), and Article 578 of the Civil Act shall apply mutatis mutandis.
(4) Article 536 of the Civil Act shall apply mutatis mutandis to the cases of paragraph (3).
[This Article Wholly Amended on Jan. 30, 2009]
Article 4(Assigning fixed date and providing lease information) #
(1) A fixed date prescribed in Article 5(2) shall be assigned by the head of a tax office having jurisdiction over the location of a commercial building.
(2) The head of the competent tax office shall prepare a fixed date register, in which the location of the relevant commercial building, the date when a fixed date is assigned, rents and deposits, etc. are written. In such cases, he or she may utilize the computerized data processing organization.
(3) A person who has an interest in the lease of a commercial building may request the head of the competent tax office to provide information, including the date when a fixed date is assigned to the relevant commercial building, rents and deposits. In such cases, no head of the competent tax office, in receipt of such request, is allowed to refuse such request without good cause.
(4) A person who intends to conclude a lease contract may request the head of the competent tax office to provide information pursuant to paragraph (3) after obtaining consent from a lessor.
(5) Matters to be included in the fixed date register, the scope of persons who have an interest in the lease of a commercial building, the scope of information which can be requested to the head of the competent tax office and matters necessary for assigning a fixed date and providing information, etc. shall be prescribed by Presidential Decree.
[This Article Wholly Amended on May 13, 2015]
Article 5(Recovery of security deposit) #
(1) Where a lessee files an application for auction of a leasehold building on the grounds of a final and conclusive judgment on a lawsuit claiming the return of security deposit or execution title corresponding thereto, the performance of opposite obligation or offer of such performance shall not be prerequisites to commence execution, notwithstanding Article 41 of the Civil Execution Act.
(2) A lessee equipped with prerequisites for counterclaim under Article 3(1) who has obtained a certificate of a fixed date on the lease contract from the competent head of tax office has a right to be reimbursed security deposit in preference to posterior creditors or other creditors from the realized amount of leasehold building (including the site possessed by a lessor) at the time of auction under the Civil Execution Act or public auction under the National Tax Collection Act.
(3) If a lessee fails to transfer a leasehold building to any transferee, he or she may not receive the security deposit under paragraph (2).
(4) Interested parties who are dissatisfied with the order of preferential payment and security deposit under paragraphs (2) and (7) may raise an objection to an auction court or an agency issuing disposition on default. <Amended on Aug. 13, 2013>
(5) Where an objection is filed to an auction court as prescribed in paragraph (4), the provisions of Articles 152 through 161 of the Civil Execution Act shall apply mutatis mutandis.
(6) When interested parties have verified to have instituted a lawsuit against a lessee, a financial institution having succeeded the preferential payment right pursuant to paragraph (7), etc. within seven days from the date an objection was filed, the agency issuing a default disposition that has received such an objection as prescribed in paragraph (4) shall reserve the return of the security deposit to the lessee, a financial institution having succeeded the preferential payment right pursuant to paragraph (7), etc. within the extent any objections were raised until the lawsuit is concluded, and allocate the remaining amount. In such cases, such reserved security deposit shall be allocated according to the result of such lawsuit. <Amended on Aug. 13, 2013>
(7) When any of the following institutions has taken over the repayment of deposit of the lessee having obtained the preferential payment right pursuant to paragraph (2), Article 6(5) and Article 7(1) according to the contract, the preferential payment right shall succeed to it within the limit of the amount having been taken over: <Added on Aug. 13, 2013; May 29, 2016>
Article 6(Order of registration of right to lease) #
(1) In cases where security deposit has not been returned after the lease terminated, a lessee may file an application for an order of registration of the right to lease to a district court, branch court of district court, Si court or Gun court having jurisdiction over the address of a leasehold building. <Amended on Aug. 13, 2013>
(2) When a lessee files an application for an order of registration of the right to lease, he or she shall include the following matters therein, and substantiate the grounds for filing an application and such fact being the cause for registration of the right to lease:
1. Purport of filing an application and grounds therefor;
2. Building which is the subject matter of lease (where the subject matter of lease is part of a building, drawings of such part shall be attached);
3. Fact which has become the ground for registration of the right to lease (where a lessee has obtained the perfection under Article 3(1) or right to preferential reimbursement under Article 5(2), such fact);
4. Other matters prescribed by Supreme Court Regulations.
(3) Articles 280(1),281,283,285,286 and 288(1), main clause of Article 288(2), Article 289, part concerning Article 288(1) among Article 290(2), and Articles 291 and 293 of the Civil Execution Act shall apply mutatis mutandis to the judgment on an application for order of registration of the right to lease, lessor's raising an objection on the determination of order of registration of the right to lease and trial thereof, application for cancellation of order of registration of the right to lease and trial thereof, or execution, etc. of order of registration of the right to lease. In such cases, "provisional seizure" shall be deemed "registration of the right to lease," "creditor" as "lessee," and "debtor" as "lessor."
(4) A lessee may file a protest against a court ruling dismissing an application for order of registration of the right to lease.
(5) When registration of the right to lease following the execution of order of registration of the right to lease is made, a lessee shall obtain the perfection under Article 3(1) and right to preferential reimbursement under Article 5(2); provided, in cases such lessee has already obtained the perfection or right to preferential reimbursement prior to the registration of the right to lease, no change shall be made to the perfection or right to preferential reimbursement, and such already obtained perfection or right to preferential reimbursement shall not be lost after the registration of the right to lease even if prerequisites for counterclaim under Article 3(1) are lost.
Article 7(Validity of registration of right to lease under Civil Act) #
(1) Article 6(5) and (6) shall apply mutatis mutandis to the validity of registration of lease of buildings under Article 621 of the Civil Act.
(2) Where a lessee holding a perfection or right to preferential reimbursement files an application for the registration of lease in cooperation with a lessor as prescribed in Article 621(1) of the Civil Act, he or she shall state the following matters in addition to the matters prescribed in subparagraphs 1 through 6 of Article 74 of the Registration of Real Estate Act in the application form, and attach documents (where the subject matter of lease is part of a building, drawings of such part shall be included) verifying such facts: <Amended on Apr. 12, 2011; Feb. 4, 2020>
1. Date when an application for business registration was filed;
2. Date when such leasehold building was occupied;
3. Date when a certificate of a fixed date was obtained on the lease contract.
[This Article Wholly Amended on Jan. 30, 2009]
Article 8(Termination of right to lease by auction) #
Where an auction under the Civil Execution Act has been implemented on a leasehold building, the right to lease shall be terminated when such leasehold building is sold; provided, in cases of the right to lease with perfection for which security deposit has not been paid in full, this shall not apply.
[This Article Wholly Amended on Jan. 30, 2009]
Article 9(Period of lease) #
(1) A lease, the period of which has not been determined or period of which has been determined for not more than one year, such period shall be deemed one year; provided, a lessee may assert that such period determined for less than one year is valid.
(2) Even after the lease is terminated, the relationship of lease is deemed to continue to exist until a lessee's security deposit is returned.
[This Article Wholly Amended on Jan. 30, 2009]
Article 10(Request for contract renewal) #
(1) Where a lessee requests for renewal of a contract between six months and one month before the expiration of period of lease, a lessor shall not refuse it without justifiable grounds; provided, in cases falling under any of the following subparagraphs, this shall not apply: <Amended on Aug. 13, 2013>
1. Where such lessee has been in arrears with an amount equivalent to three period of rent;
2. Where such lessee has entered lease by deceit or other fraudulent means;
3. Where such lessor has provided such lessee with substantial compensation by mutual consent;
4. Where such lessee has subleased all or part of the leased building without the consent of such lessor;
5. Where such lessee has destroyed all or part of the building intentionally or by gross negligence;
6. Where the purpose of lease is frustrated because all or part of a leasehold building has been severely damaged;
7. Where such lessor needs to recover possession of the building in order to demolish or reconstruct all or part of the building for any of the following grounds:
a. Where, at the time of entering into the lease contract, such lessor notifies such lessee of a plan for demolition or rebuilding specifically stating the time and period of construction, etc., and complies with the plan;
b. Where there are safety hazards due to decrepitude, damage, partial destruction, etc. of the building;
c. Where there has been demolition or rebuilding pursuant to other statutes or regulations;
8. Where such lessee has substantially violated the responsibilities of lessee or grave reasons for which the continuation of lease is difficult exist.
(2) Lessee's right to request renewal of the contract may be exercised within the extent that the whole period of lease including the period of initial lease does not exceed 10 years. <Amended on Oct. 16, 2018>
(3) A renewed lease shall be deemed to have been renewed under the same conditions as those of the former lease; provided, rent and security deposit may be increased or decreased within the extent under Article 11.
(4) Where a lessor has failed to notify a lessee of a denial to renew or modify conditions within the period under paragraph (1), lease under the same conditions as those of previous lease shall be deemed to have been made when such period expires. In such cases, the period during which such lease continues to exist shall be deemed one year. <Amended on May 8, 2009>
Article 10-2(Special cases renewal of contract) #
Where the renewed lease contract exceeds the amount of security deposit under the proviso of Article 2(1), the parties to the contract may claim an increase or decrease in the rent and security deposit in consideration of taxes and public imposts on commercial buildings, rents and security deposit of the surrounding commercial buildings, other burdens, fluctuations in economic conditions, etc.
[This Article Added on Aug. 13, 2013]
Article 10-3(Definitions of premiums) #
(1) The term of "premium" means a price, such as money, paid to a lessor or a lessee, other than deposits and rents, as a price for transfer or use of tangible or intangible property value, including business facilities, equipment, customers, credit, business know-how and business benefits generated from the location of a commercial building, which is paid by a person who conducts or who intends to conduct a business in a commercial building, the subject-matter of the lease.
(2) The term of "premium contract" means a contract which requests any person who intends to be a new lessee to pay premiums to a lessee.
[This Article Added on May 13, 2015]
Article 10-4(Protection of opportunity of collecting premiums) #
(1) No lessor shall obstruct any lessee in receiving any premium pursuant to a premium contract from a person arranged by the lessee to become a new lessee, by committing any of the following acts from six months prior to the expiry of the lease period until the end of the lease; provided, the same shall not apply where any of the grounds set forth in the subparagraphs of Article 10 (1) exists: <Amended on Oct. 16, 2018>
1. Requesting a person arranged by the lessee to become a new lessee to pay premiums; or receiving premiums from a person arranged by the lessee to become a new lessee;
2. Preventing a person arranged by the lessee to become a new lessee, from paying a premium to the lessee;
3. Requesting a person arranged by the lessee to become a new lessee, to pay remarkably large-amount of rents and deposits, compared with the tax on a commercial building, public charges, rents and deposits of surrounding commercial buildings and other charges;
4. Refusing to conclude a lease contract with a person arranged by the lessee to become a new lessee, without good cause.
(2) In any of the following cases, good cause prescribed in paragraph (1)4 shall be deemed to exist:
1. Where a person arranged by the lessee to become a new lessee, cannot afford to pay deposits or rents;
2. Where a person arranged by the lessee to become a new lessee, is likely to violate the duty of a lessee or any reasonable ground exists, which makes it impracticable to maintain lease;
3. Where the subject-matter of the lease is a commercial building and has not been used for commercial purposes for at least 18 months;
4. Where a new lessee selected by the lessor concludes a premium contract with the lessee and pays premiums.
(3) Where a lessor violates paragraph (1), incurring any loss to a lessee, he or she shall be liable to compensate for such loss. In such cases, damages shall not exceed the lesser amount of a premium to be paid to a lessee by a new lessee and premium as at the time when the lease expires.
(4) Claim for damages to a lessor pursuant to paragraph (3) shall expire by completion of prescription if it is not exercised within three years from the date when the lease expires.
(5) A lessee shall provide information to the lessor, to the best of his or her knowledge, on the financial capacity of the person arranged by the lessee to become a new lessee, such person’s willingness and ability to pay deposits and rents and to perform duties as a lessee.
Article 10-4 #
shall not apply to any of the following commercial building leases: <Amended on Oct. 16, 2018> 1. Where the commercial building subject to the lease is part of a superstore or quasi-superstore under Article 2 of the Distribution Industry Development Act (excluding traditional markets under subparagraph 1 of Article 2 of the Special Act on the Development of Traditional Markets and Shopping Districts);
2. Where the commercial building subject to the lease is State property under the State Property Act or public property under the Public Property and Commodity Management Act.
[This Article Added on May 13, 2015]
Article 10-5(Exemption from application of premiums) #
Article 10-6(Preparation of written standard premium contracts) #
The Minister of Land, Infrastructure and Transport may prepare a written standard premium contract to conclude a premium contract between a lessee and a person who intends to be a new lessee following consultation with the Minister of Justice and encourage the use thereof. <Amended on Jul. 31, 2020>
[This Article Added on May 13, 2015]
Article 10-7(Public notice of standards for appraising premiums) #
The Minister of Land, Infrastructure and Transport may publicly notify standards on procedures and methods, etc. for appraising premiums.
[This Article Added on May 13, 2015]
Article 10-8(Overdue rents and termination) #
Where overdue rents of a lessee amounts to rents of three terms, a lessor may terminate a contract.
[This Article Added on May 13, 2015]
Article 10-9(Temporary special cases concerning requests for renewal of contracts) #
The overdue rent of a lessee for six months from the enforcement date of this Act (referring to the Commercial Building Lease Protection Act (Act No. 17490)) shall not be deemed overdue rent in the application of Article 10(1)1, the proviso of Article 10-4(1), and Article 10-8. In such cases, the lessor's other rights to the overdue rent shall not be affected.
[This Article Added on Sep. 29, 2020]
Article 11(Right of claim for increase or decrease of rent) #
(1) Where rent or security deposit has become insufficient due to taxes, public imposts, other increase or decrease in the burden on such leasehold building or fluctuations in economic conditions caused by a Class 1 infectious disease, etc. defined in subparagraph 2 of Article 2 of the Infectious Disease Control and Prevention Act, interested parties may claim an increase or decrease in the future rent or security deposit. However, in cases of an increase, it shall not exceed the rate set according to the standards prescribed by Presidential Decree. <Amended on Sep. 29, 2020>
(2) No claim for increase under paragraph (1) shall be made within one year after the lease contract or agreed increase in rent, etc. is made.
(3) Where a lessor claims an increase in rent, etc. under paragraph (1) after the rent, etc. have been decreased due to fluctuations in economic conditions caused by a Class 1 infectious disease defined in subparagraph 2 of Article 2 of the Infectious Disease Control and Prevention Act, the proviso of paragraph (1) shall not apply until the increased rent, etc. amount to the rent, etc. that are not decreased. <Added on Sep. 29, 2020>
[This Article Wholly Amended on Jan. 30, 2009]
Article 11-2(Lessees' right to terminate contracts on grounds of closure of business) #
(1) If a lessee closes his or her business due to a substantial change in economic situations which has been caused by a restriction on or prohibition of assemblies under Article 49(1)2 of the Infectious Disease Control and Prevention Act (including measures to restrict operating hours under subparagraph 2-2 of that paragraph) for a total of at least three months, he or she may terminate the relevant lease contract.
(2) The termination under paragraph (1) shall take effect three months after the date the relevant lessor receives the notification of termination of the contract.
[This Article Added on Jan. 4, 2022]
Article 12(Restriction on calculation rate when converting into monthly rent) #
Where all or part of security deposit is converted into monthly rent, such monthly rent shall not exceed the extent of monthly rent obtained by multiplying an amount to be converted by a rate which is lower between the following subparagraphs: <Amended on May 17, 2010; Aug. 13, 2013>
1. A rate prescribed by Presidential Decree in consideration of the interest rate on loans of banks under the Banking Act, the economic conditions of the relevant areas, etc.
2. A rate obtained by multiplying the basic interest rate officially announced by the Bank of Korea by the multiple prescribed by Presidential Decree.
[This Article Wholly Amended on Jan. 30, 2009]
Article 13(Application to sublease relationship) #
(1) Articles 10, 10-2, 10-8, 10-9 (limited to parts regarding Articles 10 and 10-8), 11, and 12 shall apply to the sublease relationship between a sublessor and a sublessee. <Amended on May 13, 2015; Sep. 29, 2020>
(2) A sublessee who has concluded a sublease contract with the approval of such lessor may exercise a right to request renewal of lease to such lessor on behalf of such lessee within a period during which the right to request renewal of contract can be exercised by the lessee.
[This Article Wholly Amended on Jan. 30, 2009]
Article 14(Protection of certain amount of security deposit) #
(1) A lessee shall have a right to be reimbursed a certain amount of the security deposit in preference to other holders of a real right granted by way of security. In such cases, such lessee shall satisfy the conditions under Article 3(1) before registering an application for the auction of a building.
(2) The provisions of Article 5(4) through (6) shall apply mutatis mutandis to cases under paragraph (1).
(3) The extent and standards of lessees to be reimbursed preferentially and a certain amount of the security deposit reimbursed under paragraph (1) shall be prescribed by Presidential Decree following deliberation by the Commercial Building Lease Committee under Article 14-2, considering the economic conditions of relevant areas, security deposit, rent, etc. within the extent of 1/2 of the price of leasehold building (including the price of site possessed by a lessor). <Amended on Aug. 13, 2013; Jul. 31, 2020>
[This Article Wholly Amended on Jan. 30, 2009]
Article 14-2(Commercial Building Lease Committee) #
(1) A Commercial Building Lease Committee (hereinafter referred to as the "Committee") shall be established under the Ministry of Justice to deliberate on the following matters related to the lease of commercial buildings:
1. The amount of a security deposit under the proviso of Article 2(1);
2. The extent and standards of lessees to be reimbursed preferentially and a certain amount of the security deposit reimbursed under Article 14.
(2) The Committee shall be comprised of not less than 10 but not more than 15 members, including one chairperson, in consideration of gender.
(3) The Vice Minister of Justice shall be the chairperson of the Committee.
(4) The members of the Committee shall be appointed or commissioned by the chairperson from among any of the following persons; at least 1 member falling under subparagraphs 1 through 6 shall be appointed or commissioned respectively and at least 1/2 of the members shall be commissioned from among persons falling under subparagraph 1,2 or 7: <Amended on Oct. 1, 2025>
1. Persons who majored in law, economics, real estate, etc. with expert knowledge related to the lease of commercial buildings and have served in an accredited research institute as an assistant professor or higher or in a position equivalent thereto for at least five years;
2. Persons who have engaged in the relevant fields for at least five years as an attorney-at-law, certified public appraiser, certified public accountant, certified public tax accountant, or licensed real estate agent and have abundant work experience in affairs related to the lease of commercial buildings;
3. Members of the Senior Executive Service in charge of affairs related to commodity prices in the Ministry of Economy and Finance;
4. Members of the Senior Executive Service in charge of affairs related to the lease of commercial buildings in the Ministry of Justice (including public officials in special service equivalent thereto);
5. Members of the Senior Executive Service in charge of affairs related to the lease of commercial buildings in the Ministry of Land, Infrastructure and Transport;
6. Members of the Senior Executive Service in charge of affairs related to micro enterprises in the Ministry of SMEs and Startups;
7. Other persons prescribed by Presidential Decree, who have abundant knowledge and experience related to the lease of commercial buildings.
Article 15(Mandatory provisions) #
Any agreement in violation of the provisions of this Act which is unfavorable to a lessee shall be null and void.
[This Article Wholly Amended on Jan. 30, 2009]
Article 16(Lease for temporary use) #
This Act shall not apply to any lease evident for temporary use.
[This Article Wholly Amended on Jan. 30, 2009]
Article 17(Application to unregistered lease on deposit basis mutatis mutandis) #
This Act shall apply mutatis mutandis to contracts of lease on a deposit basis of buildings unregistered. In such cases, "security deposit for lease on a deposit basis" shall be deemed "security deposit of lease".
[This Article Wholly Amended on Jan. 30, 2009]
Article 18(Application to Trial of Small Claims Act mutatis mutandis) #
The provisions of Articles 6, 7, 10 and 11-2 of the Trial of Small Claims Act shall apply mutatis mutandis to a lawsuit claiming the return of security deposit, instituted by a lessee against a lessor.
[This Article Wholly Amended on Jan. 30, 2009]
Article 19(Preparation of written standard contracts) #
The Minister of Justice may prepare a written standard contract on a commercial building lease in which deposits, rents, period of a lease and sharing repair costs, etc. are written following consultation with the Minister of Land, Infrastructure and Transport and encourage the use thereof. <Amended on Jul. 31, 2020>
[This Article Added on May 13, 2015]
Article 20(Commercial building dispute conciliation committees) #
(1) To deliberate on and mediate disputes arising in relation to the lease of commercial buildings subject to the application of this Act, a commercial building dispute conciliation committee (hereinafter referred to as "conciliation committee") shall be established in each branch of the Korea Legal Aid Corporation established under Article 8 of the Legal Aid Act, each branch office or office of the Korea Land and Housing Corporation established under the Korea Land and Housing Corporation Act, and branch office or office of the Korea Appraisal Board established under the Korea Appraisal Board Act, as prescribed by Presidential Decree. The Special Metropolitan City, a Metropolitan City, the Special Self-Governing City, a Do or the Special Self-Governing Province may establish a conciliation committee, taking the actual conditions of the relevant local government into consideration. <Amended on Jul. 31, 2020>
(2) Conciliation committees shall deliberate on and mediate the following matters:
1. Disputes over increase or decrease in rents or deposits;
2. Disputes over the lease period;
3. Disputes over the return of deposits or of possession of leased commercial buildings;
4. Disputes over the duty to maintain and repair leased houses;
5. Disputes over premiums;
6. Other disputes prescribed by Presidential Decree in relation to the lease of commercial buildings.
(3) In order to manage the administrative affairs of a conciliation committee, a secretariat shall be established under the conciliation committee, and the organizational structure and human resources of the secretariat and other necessary matters shall be prescribed by Presidential Decree.
(4) No person in charge of the affairs of a conciliation committee at the secretariat shall concurrently engage in the affairs relating to any position other than the affairs of the secretariat of a housing lease conciliation committee under Article 14 of the Housing Lease Protection Act.
[This Article Added on Oct. 16, 2018]
Article 21(Application mutatis mutandis of housing lease dispute conciliation committees) #
The provisions of Articles 14 through 29 of the Housing Lease Protection Act concerning housing lease dispute conciliation committees shall apply mutatis mutandis to conciliation committees except for the matters prescribed in this Act. In such cases, a "housing lease conciliation committee" shall be construed as a "commercial building dispute conciliation committee".
[This Article Added on Oct. 16, 2018]
Article 22(Legal fiction as public officials for purposes of applying penalty provisions) #
A member of the Commercial Building Lease Committee and a commercial building dispute conciliation committee who is not a public official shall be deemed as a public official for purposes of applying penalty provisions pursuant to Articles 127 and 129 through 132 of the Criminal Act. <Amended on Jul. 31, 2020>
[This Article Added on Oct. 16, 2018]