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"If the landlord says 'I won't renew the lease,' is that the end of it?" In residential leases, a situation where the tenant exercises the right to request lease renewal but the landlord refuses is surprisingly common. However, being the landlord does not mean one can refuse renewal or raise the rent at will. Today we summarize the limits on refusing renewal under the Housing Lease Protection Act (주택임대차보호법) and the key points you must check in any renewal dispute.

[Contents]

1. When can a landlord refuse renewal?

2. Can rent and deposit be raised freely?

3. If the lease was auto-extended, is the renewal right gone?

4. Statutory renewal, implied renewal, new contract: why the distinction matters

5. How Cheongchul Law Firm handles lease disputes

When can a landlord refuse renewal?

When a tenant exercises the right to request lease renewal, the landlord cannot refuse simply because the market rent has risen or because they no longer wish to extend. Refusal is permitted only when a statutory ground exists.

Typical grounds include: the tenant's rent arrears; unauthorized subletting; damage to the dwelling through the tenant's intent or gross negligence; demolition or reconstruction of the building; and the genuine need of the landlord (or their lineal ascendants or descendants) to occupy the property. A refusal made without such a statutory ground is unlikely to be upheld.

Can rent and deposit be raised freely?

There are limits on increasing rent or the deposit. First, no increase may be made within one year of the contract or agreement, and even then, under the Seoul standard, the increase generally cannot exceed 5%.

This right to adjust rent applies only prospectively, so it does not allow retroactive settlement for periods already passed. On the other hand, a tenant may also request a reduction due to changed circumstances, and the 5% cap does not directly apply to such reductions.

If the lease was auto-extended, is the renewal right gone?

"My lease was automatically extended before, so haven't I already used my renewal right?" This is a frequent question. The short answer is no.

An implied renewal or a simple renewal by agreement is not treated as an exercise of the renewal right. Therefore, even if there was an automatic extension in the past, the tenant's single right to request renewal may still remain. In addition, the Supreme Court of Korea has held that where the parties enter into a new contract by agreement and set a new amount, the 5% increase cap does not automatically apply.

Statutory renewal, implied renewal, new contract: why the distinction matters

As shown above, even what looks like the same "lease extension" leads to entirely different outcomes depending on whether it is a statutory renewal (exercise of the renewal right), an implied renewal, or a separate new contract regarding whether the renewal right remains and whether the 5% cap applies.

Accordingly, when a refusal or rent-adjustment dispute arises, the first step is to determine which of the three the current situation falls under. Making that determination requires examining the content of the notices exchanged between the parties and the wording of the contract.

How Cheongchul Law Firm handles lease disputes

The outcome of a residential lease renewal or rent dispute varies greatly with the specific facts, such as the timing of notice, the wording of the contract, and the history of past extensions. At Cheongchul Law Firm, attorneys who personally handle real estate and lease cases from start to finish review each matter closely and propose the best solution from the standpoint of either landlord or tenant. If you have received a notice refusing renewal or have been asked for an unfair rent increase, we invite you to consult with Cheongchul.

This article is intended to provide general legal information and does not constitute legal advice on any specific matter. For a determination on an individual case, please consult an attorney.