Real Estate Attorney Consultation | Real Estate Attorney Removes Tenant in Rent Arrears and Secures Surrender of the Building

The client entered into a lease agreement with tenant A (hereinafter the defendant) and agreed to lease the building in exchange for a deposit of 100 million won and monthly rent of 4 million won.

The defendant renovated the leased building, installing interior fixtures and kitchen equipment, among other things, and used the premises to operate a cafe.

In the early part of the lease period, the defendant paid the rent faithfully every month, and the client therefore came to trust the defendant and implicitly extended the contract for one year after the two-year term expired.

After the extension, however, the defendant abruptly stopped paying rent, repeatedly saying things such as "operating costs are short" and "I will definitely pay later."

The defendant failed to properly pay rent for approximately 20 months, and the amount reached 80 million won.

The matter concerning the defendant was placed on the agenda at a cooperative meeting, and the client, representing the cooperative, notified the defendant of the termination of the lease agreement for nonperformance of the contract.

The defendant, however, asserted that the beneficial expenses for the interior renovations and the premium had to be returned, and continued operating the business while occupying the building.

The client therefore requested a real estate attorney consultation in order to lawfully terminate the contract through a building surrender lawsuit.

1) Rebutting the Defendant's Claim to Recover the Premium Under the Commercial Building Lease Protection Act

The real estate attorney organized the rent payment records and the period of arrears, making clear that the defendant had defaulted on rent equivalent to three months or more over a prolonged period.

On this basis, the attorney emphasized that the termination of the lease agreement constituted a justifiable ground under the Commercial Building Lease Protection Act and that the defendant could not assert protection of the opportunity to recover the premium.

2) Rebutting the Claims Regarding Interior Costs and Beneficial Expenses

The real estate attorney emphasized that the interior fixtures and furnishings installed by the defendant had been installed for the defendant's own business and could not be the subject of a claim for reimbursement of beneficial expenses.

In addition, the attorney made clear that because a lessee bears the obligation to restore the property to its original condition upon termination of the lease, the lessee cannot, on that premise, claim from the lessor beneficial expenses or an amount equivalent to a premium.

As a result of the assistance provided through the real estate attorney consultation, the court found that the lease agreement had been lawfully terminated and that the defendant's claims regarding the premium and the beneficial expenses were without merit.

Accordingly, the court ordered the defendant to surrender the building on the condition that the defendant be refunded 20 million won, the amount remaining after deducting 80 million won in unpaid rent from the deposit.

In a building surrender lawsuit, the most important issues are whether the tenant breached the lease agreement and whether the contract was lawfully terminated.

If the tenant defaulted on rent or failed to perform the obligations set out in the contract, this may constitute grounds for eviction, but those facts must be clearly proven with objective evidence.

In addition, even where grounds for the expiration or termination of the contract exist, whether the procedure for terminating the lease agreement was legally proper is also evaluated.

If preparation on these points is insufficient, the building surrender lawsuit may be prolonged or lead to an unfavorable result, so careful review is necessary from the stage before litigation begins.

If you need advice on a building surrender lawsuit, it can be helpful to consult a specialist attorney through a real estate attorney consultation.

Through the consultation, the real estate attorney organizes the contractual relationship and the issues in dispute and assists you in proceeding with the building surrender lawsuit while reducing unnecessary disputes.

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