Case Overview (Feb. 10, 2025)


Case Overview


Our law firm recently handled a commercial lease dispute involving Client Mrs. M, a landlord facing challenges with a non-compliant tenant. This case illustrates key legal considerations in handling overdue rent, lease modifications, and tenant eviction procedures.



Background of the Case


Client Mrs. M, a commercial property owner, had leased her property to QXXXX Co., Ltd. under a rental agreement. Over time, the tenant failed to meet its financial obligations, leading to a complex legal dispute.


Lease Agreement Terms


Initial Agreement Date: June 14, 2018


Deposit: 50 million KRW


Original Monthly Rent: 4.5 million KRW


Reduced Rent (Post-COVID): 3.5 million KRW (Effective October 3, 2019)


Total Due Rent: 23.1 million KRW (6 months of arrears)


The tenant had continuously delayed payments, and despite multiple phone calls requesting overdue payments, no formal legal action had been taken.



Tenant's Additional Requests and Legal Issues


Tenant's Requests


Reduction of the deposit from 50 million KRW to 30 million KRW.


Decrease in monthly rent to 2.5 million KRW.


Offset the deposit reduction against overdue rent.


If the business is closed, the landlord should bear part of the goodwill compensation.


Legal Challenges


The tenant’s request to unilaterally modify lease terms was not legally enforceable.


The overdue rent amount was significant, making further negotiations unfavorable for the landlord.


The landlord had not yet issued a formal notice rejecting the lease modification requests.


The issue of goodwill compensation (premium payment) could further complicate the case.



Legal Action Plan & Procedures


Contract Termination and Eviction Measures


✅ Immediate Notice via Certified Mail


Send a formal legal notice citing six months of unpaid rent, declaring contract termination, and demanding eviction.


The notice should include:


A deadline for overdue rent payment (e.g., within 7 days).


Automatic termination of the contract upon non-payment.


Potential legal actions in case of continued non-compliance.


✅ Assessing Further Negotiation Possibilities


Evaluate if the tenant voluntarily agrees to settle overdue payments or vacate.


If the tenant agrees to vacate, negotiate partial deposit returns after settling rent arrears.


If negotiations fail, initiate legal proceedings for eviction.


Goodwill Compensation and Legal Considerations


✅ Tenant's Right to Recover Goodwill Compensation


Under commercial lease laws, tenants have the right to find a new tenant to take over their lease.


The landlord cannot obstruct such efforts without a valid reason.


However, if the lease is terminated due to non-payment, the tenant’s rights to goodwill compensation are forfeited.


✅ Clarifying No Obligation for Goodwill Compensation


The landlord has no legal duty to pay goodwill compensation to the tenant.


The termination notice and lease documentation should clearly state this.


Litigation Process & Cost Considerations


✅ Eviction Lawsuit Process


Expected duration: at least 6 months.



Legal costs:


Attorney fees: approx. 6 million KRW (excluding VAT).


Certified mail cost: approx. 600,000 KRW (including legal review).


Additional expenses for forced eviction if required.


✅ Potential Damage Claims


If the deposit does not cover outstanding rent and management fees, legal action for additional compensation may be pursued.


If the tenant’s company is liquidated, collection of damages could be difficult.


Execution Plan & Recommended Actions


✅ Immediate Notice and Lease Termination


Officially demand overdue rent payment and specify automatic termination upon non-payment.


Prevent prolonged negotiations leading to further financial losses.


✅ Negotiation & Settlement Consideration


If the tenant agrees to vacate, arrange an orderly settlement.


If the tenant insists on renegotiating the contract, a firm legal stance should be maintained.


✅ Legal Documentation & Evidence Preparation


Secure original lease agreement, payment records, and recorded communications.


Prepare for possible litigation by documenting all interactions with the tenant.



Conclusion & Legal Guidance


The tenant’s prolonged rent arrears justify contract termination and eviction proceedings.


The landlord should proceed with a certified legal notice to enforce lease termination.


Negotiations on reduced rent and deposit are not legally enforceable unless voluntarily agreed.


If the tenant refuses to vacate, legal eviction procedures should be initiated.


Goodwill compensation claims should be carefully managed, ensuring compliance with lease laws.

댓글

댓글 쓰기

이 블로그의 인기 게시물

Reevaluating the 10.26 Incident: The Retrial of Kim Jae-gyu and Its Impact on South Korean History

이미지
One of the Most Controversial Events in Modern South Korean History: The ‘10.26 Incident’ and the Recent Court Decision A South Korean court has decided to reopen the retrial of the late Kim Jae-gyu , the former director of the Korean Central Intelligence Agency (KCIA), bringing the 10.26 Incident back into legal and historical evaluation after 45 years. This retrial is not merely a reconsideration of a past event but a significant opportunity to reassess the fairness of the original trial and to determine whether Kim’s actions were truly an act of insurrectional murder or a resistance effort to restore democracy . 🔍 What is the 10.26 Incident ? The 10.26 Incident refers to the assassination of President Park Chung-hee and Presidential Security Chief Cha Ji-chul by KCIA Director Kim Jae-gyu on October 26, 1979 . This incident marked the end of the Yushin regime and brought about a significant shift in South Korea’s political landscape. Following the assassination, Kim Jae...
자세한 내용 보기

South Korea’s Civil Code Revision: Key Changes and Implications

이미지
South Korea’s Civil Code Revision: Key Changes and Implications The South Korean government has introduced a major revision to the Civil Code, marking a significant legal modernization.  This reform aims to enhance clarity, align with global standards, and improve legal accessibility for both citizens and foreign residents. By addressing legal ambiguities and incorporating judicial precedents into statutory law, this revision is expected to enhance predictability in legal disputes. Key Reforms in the Civil Code Revision One of the most notable changes is the improvement of the breach of obligation system.  Previously, the Civil Code only had provisions on non-performance and delay but lacked explicit rules on partial performance.  The revised law clarifies this by defining breach as “when performance has not been completed” rather than “when performance becomes impossible.” Additionally, the scope of remedies such as restitution and periodic compensation has been expanded...
자세한 내용 보기

Korean Constitutional Court to Rule on President Yoon's Impeachment April 4th

이미지
  In a historic and politically charged moment, the Constitutional Court of South Korea is set to deliver its final verdict on the impeachment of President Yoon Suk-yeol. The court announced that the decision will be made public on Friday, April 4, 2025, at 11:00 AM , at the Grand Courtroom in Jongno-gu, Seoul. The announcement follows 111 days after the National Assembly passed the impeachment motion and 38 days after the final hearings concluded on March 25. The outcome of this ruling holds significant implications not just for the current administration but for the broader framework of constitutional law and democratic governance in South Korea. This pivotal moment comes amidst growing scrutiny from both political circles and the public, as the nation stands at the crossroads of legal accountability and executive authority. A Decision with Immediate Impact The court's verdict will determine whether President Yoon will continue to lead the country or be permanently removed f...
자세한 내용 보기