How to Resolve Lease Renewal Refusals and Brokerage Fee Disputes Under the Residential Lease Protection Act

When exercising the right to request a lease renewal under the Residential Lease Protection Act, it is crucial to accurately understand the requirements for a landlord’s claim of actual residence and the liability for brokerage fees arising from tacit renewal to prevent financial loss. Local governments, including the Seoul Metropolitan Government, have recently announced a strict response policy against unfair practices, such as forcing one-year contracts or shifting brokerage fees to tenants upon moving out after a tacit renewal. The Residential Lease Protection Act has been amended more than 29 times to ensure tenant housing stability, establishing strong protective mechanisms such as the right to oppose third parties (daedang-ryeok), the right to priority repayment, and the right to request a lease renewal. However, in the field, disputes over renewal refusals and unfair demands made against tenants who are unfamiliar with legal regulations continue to occur. In this article, we will examine common types of disputes during the lease renewal process and smart legal countermeasures in detail. We aim to provide practical assistance so that readers do not suffer unfair losses when extending or concluding their lease agreements.

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How to Resolve Lease Renewal Refusals and Brokerage Fee Disputes Under the Residential Lease Protection Act

1. Basic Concept and Exercise Period of the Right to Request Lease Renewal

The right to request a lease renewal, as stipulated in the Residential Lease Protection Act, is a right that guarantees tenants can extend their contract once more to reside stably. Tenants must clearly express their intention to renew to the landlord within the period starting six months before the expiration of the existing lease term and ending two months before the expiration. If this period is missed or passes without any contact, the tenant may not be recognized as having exercised the right to request renewal, so special care is needed in calculating dates. In the past, extending a contract required unconditional negotiation with the landlord under new conditions, but now, based on the law, tenants can extend the lease with an increase of up to 5% of the existing conditions. For example, Mr. Kim, who lives in an apartment in Mapo-gu, Seoul, on a jeonse (lump-sum deposit) basis, clearly conveyed his intention to renew via a registered mail and text message four months before the contract expiration. Although the landlord wanted to significantly raise the monthly rent, he could not refuse Mr. Kim’s legitimate demand to accept only an increase within the legal cap of 5%. Expressing one’s intention in accordance with the time and procedures set by the law is the most certain first step in protecting a tenant’s housing rights.

2. Landlord’s Refusal Based on Actual Residence and Legitimate Exceptions

While the Residential Lease Protection Act recognizes tenants’ renewal requests, it includes an exception clause allowing refusal if the landlord or their direct ascendants or descendants intend to reside in the property directly. In reality, Mr. Park, who was living on a jeonse basis in Seoul, requested a renewal but received a notice of refusal from the landlord, who claimed his son was getting married soon and needed to move in. Since the landlord’s claim of actual residence constitutes a legally valid reason for refusal, Mr. Park was unfortunately faced with the situation of having to look for another place to move. However, cases often occur where a landlord claims actual residence to evict a tenant but actually rents the property to someone else at a higher price. If it is revealed that the landlord did not actually reside in the property without just cause and entered into a lease contract with a third party, the tenant can claim damages. Therefore, when a landlord claims actual residence, it is necessary to verify their actual plans to reside afterwards or closely monitor occupancy status through the management office, etc. The law protects tenants’ rights while also considering the landlord’s exercise of property rights, so both parties must carefully examine strict legal requirements.

3. The Truth About Tacit Renewal and Brokerage Fee Liability

The demand that tenants must bear the brokerage fee for finding a new tenant when they notify termination and move out during a tacit renewal is clearly illegal. According to recent investigations by the Seoul Metropolitan Government and others, some licensed real estate brokers and landlords are colluding to shift brokerage fees to tenants moving out of tacitly renewed properties under the guise of “custom.” Under the Residential Lease Protection Act, if a tenant notifies termination after a tacit renewal, the effect takes place three months after the notification date, and the brokerage fee incurred at this time must be paid by the landlord. Mr. Lee, who lived in a one-room apartment in a local area, had to move due to a job transfer during the tacit renewal period. The landlord demanded that he pay the brokerage fee before moving out because a new tenant had not yet been found. Mr. Lee looked up relevant laws and local government interpretations and confidently explained to the landlord that there is no legal obligation to bear brokerage fees during a tacit renewal. Eventually, the landlord admitted his claim was wrong, and Mr. Lee was able to complete his move after receiving his full deposit refund without paying a single won in brokerage fees. Shifting costs unfairly to tenants under the name of “custom” constitutes an unfair contract that infringes upon the rights of tenants protected by law.

4. How to Handle Forced 1-Year Contracts and Unfair Brokerage Practices

Since the minimum duration for residential leases under the Residential Lease Protection Act is two years, tenants can claim a two-year residence even if they signed a one-year contract with the landlord. Mr. Choi, a young professional, moved from a local area to Seoul and, at the suggestion of a real estate brokerage, reluctantly signed a one-year contract and moved in. After one year, the landlord demanded a rent increase or eviction, claiming that surrounding market prices had risen, leaving Mr. Choi in a state of panic. However, Article 4 of the Residential Lease Protection Act states that a lease with a term of less than two years is deemed to be two years, guaranteeing that the tenant can reside for the full two years. Upon learning this fact, Mr. Choi conveyed his intention to exercise his right to reside for two years to the licensed broker and the landlord, and eventually was able to reside for the full two years under the original conditions. Some illegal brokerage offices or landlords try to induce one-year contracts to frequently collect brokerage fees or nullify the right to request renewal. When faced with such unfair and improper brokerage practices, one should report to local government grievance centers or relevant agencies to actively seek relief for their rights.

5. Commercial Building Lease Protection Act: Contract Renewal and Converted Deposit

In addition to residential buildings, the Commercial Building Lease Protection Act also contains regulations regarding requests for contract renewal, guaranteeing contract extensions within a total of 10 years. Mr. Jeong, who runs a self-employed business, was on the verge of massive business closure after receiving a sudden notice from the building owner to raise the rent to an unreasonable level ahead of his commercial lease expiration. Fortunately, under the Commercial Building Lease Protection Act, the right to request renewal can be exercised for a total of 10 years including the initial contract period, allowing Mr. Jeong to breathe a sigh of relief. However, for commercial buildings, high-value leases exceeding the locally determined converted deposit standard amount may be excluded from some protective provisions of the law, so caution is required. The converted deposit is calculated by adding the monthly rent conversion amount to the deposit, and even if the standard line is exceeded, core provisions such as the right to request renewal or the right to oppose third parties remain applicable. A cafe owner in Busan, despite having a high monthly rent property exceeding the standard amount, was able to continue his business without being evicted by asserting the renewal rights guaranteed by the Commercial Building Lease Protection Act. Commercial tenants must accurately calculate their deposit size and converted deposit standards to prepare against unfairly losing their business premises.

6. Practical Rules for Preventing Lease Disputes

To prevent the numerous legal disputes that can arise during the lease contract process, meticulous attention and verification are essential from the stage of drafting the contract. Content agreed upon orally between the landlord and tenant is difficult to be recognized as legally valid later, so all important matters must be documented in writing or text records. In particular, for issues such as contract renewal, deposit return, and repair costs, it is safe to secure objective evidence materials such as call recordings or KakaoTalk messages. In the face of changes in the real estate market and various legal interpretations, both tenants and landlords need an attitude of accurately understanding and respecting each other’s rights and obligations. Rather than reacting emotionally at the next contract expiration, please exercise the wisdom to calmly review the provisions of the Residential Lease Protection Act and find a smooth point of agreement. If a complex dispute arises that is difficult to resolve through dialogue between the parties, it is wise to seek help through professional counseling from the Legal Aid Corporation or housing welfare centers. Continuous acquisition of legal common sense and the establishment of a transparent contract culture will be the strongest shield to protect the valuable housing stability and assets of oneself and one’s family.

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