Korea Land and Housing Corporation (Law Firm Sin Law, Attorney Park Jae-ju, Counsel for defendant-appellant)

Defendant 1 and one other

November 15, 2019

Gwangju District Court Decision 2018Da531644 Decided June 4, 2019

1. The part against Defendant 1 in the judgment of the first instance shall be modified as follows:

A. Defendant 1 received KRW 16,007,026 from the Plaintiff, and at the same time deliver to the Plaintiff the building specified in attached Table 1.

B. The plaintiff's remaining claims against the defendant 1 are dismissed.

2. The plaintiff's appeal against the defendant 2 is dismissed.

3. Of the total litigation cost incurred between the Plaintiff and Defendant 1, 40% is borne by the Plaintiff, the remainder 60% is borne by Defendant 1, and the appeal cost incurred between the Plaintiff and Defendant 2 is borne by the Plaintiff.

4. The provisional execution may be effected under paragraph (1).

Of the judgment of the first instance court, the part against the plaintiff shall be revoked. The defendant 1 shall deliver to the plaintiff the building listed in paragraph (1) of the attached Table 1 (hereinafter referred to as the "first apartment"), and the building listed in paragraph (2) of the attached Table 2 (hereinafter referred to as the "second apartment") to the defendant 2, respectively.

1. Facts of recognition;

A. The Plaintiff concluded a lease agreement that leases the first and second apartment units, the publicly constructed rental housing, respectively, and delivered apartment units to the Defendants as follows:

Defendant 1’s monthly rent for the lease deposit for the leased object included in the main sentence, from January 28, 2016 to January 31, 2018, 2018, KRW 103,100,00 for Defendant 2’s apartment complex, Defendant 2, from January 1, 2015 to December 24, 2016 to December 31, 2016, KRW 81,520 for the monthly rent for the lease deposit for the leased object under the lease contract for the leased object included in the main sentence.

B. The following are relevant to the instant lease agreement:

(1) No lessee shall engage in any conduct falling under any of the following subparagraphs. 1. Where he/she transfers the right of lease or sub-lease housing to any third person, in violation of the Rental Housing Act; 2. Where he/she alters, expands or alters the rental housing and its incidental facilities or uses it for any purpose other than its original purpose:

C. On April 21, 2017, Defendant 1 completed the registration of ownership transfer with respect to ○○○○○○○○○○○○○○○○, an aggregate building on the ground, in Gwangju Northern-gu ( Address omitted) on April 21, 201, and the Plaintiff rejected Defendant 1’s renewal of the lease agreement on the first apartment on the ground of Article 10(1)7 of the General Conditions for Contracts.

D. On November 13, 2015, the bankruptcy trustee of the Solomon Savings Bank Co., Ltd., the bankruptcy debtor, the Korea Deposit Insurance Corporation, based on the original copy of the Seoul District Court Decision 2014Kadan225371 Decided November 13, 2015, against Defendant 2, the Seoul District Court issued a seizure and collection order on the claim to return apartment lease deposit against the Plaintiff. The original copy of the above order was served on the Plaintiff around November 16, 2015. The Korea Deposit Insurance Corporation requested the Plaintiff to suspend the lease contract of the second apartment between the Plaintiff and Defendant 2 on the ground that the above seizure and collection order was issued.

[Reasons for Recognition] Facts without dispute, Gap evidence 3-2, 3, Gap evidence 6-2, 4, and Gap evidence 9-3, the purport of the whole pleadings

2. Determination as to the claim against Defendant 1

A. Determination on the cause of the claim

According to the facts acknowledged earlier, the lease contract on the first apartment between the Plaintiff and Defendant 1 was terminated on January 31, 2018, which is the last day of the lease term due to the Plaintiff’s refusal to renew the lease term. Thus, Defendant 1 is obligated to deliver the first apartment to the Plaintiff, barring any special circumstance.

B. Determination on Defendant 1’s simultaneous performance defense

Defendant 1 simultaneously makes a simultaneous performance defense to the effect that the Plaintiff cannot comply with the Plaintiff’s request for extradition before the refund of the remaining lease deposit is made. Defendant 1 paid KRW 18,43,00 as the lease deposit to the Plaintiff at the time of concluding the lease agreement on the apartment complex No. 1, and the fact that the said lease agreement was terminated on January 31, 2018 is as seen earlier, barring any special circumstance, the Plaintiff is obligated to return the lease deposit in this case to Defendant 1, and Defendant 1’s obligation to deliver the instant lease deposit in the simultaneous performance relationship with the Plaintiff’s obligation to return the lease deposit in this case.

C. Judgment on the plaintiff's re-appeal to the deduction

1) The plaintiff asserts that since the defendant 1 uses the apartment unit No. 1 even after the expiration of the lease term, the sum of KRW 2,503,274 from the lease deposit of the defendant 1 is to be deducted from the total amount of KRW 2,503,274 (=the illegal occupancy compensation amount of KRW 2,257,220 + the litigation cost of KRW 77,300 + the facility cost of KRW 97,270 + the facility cost of KRW 71,484).

2) According to the facts acknowledged earlier and the facts found in light of the overall purport of the pleadings, “Article 10 of the Special Conditions for Contracts” of a lease agreement as illegal occupancy compensation, stating that “Where a lessee fails to issue an order to a lessor until the date he/she should issue an order for the rental housing pursuant to Article 8 of the Special Conditions for Contracts, or where a life-long or renewed lease contract has not been concluded despite the expiration of the lease contract term under Article 2 of the Special Conditions for Contracts, the lessee shall pay to the lessor an amount equivalent to 1.5 times the basic monthly rent under Article 1(1) of the General Conditions for Contracts for the period from the following day after the date he/she should issue an order for the house. In such cases, management fees, including electricity and water supply charges, etc. used by the lessee until the life-long date, shall be separately paid to the lessor.” From the termination of the lease agreement for the first apartment complex, the Plaintiff’s delivery of the apartment complex from March 28, 2018 to June 14, 2015 x 207 years x x 17

3) Therefore, when the lease deposit amounting to KRW 18,43,00 is deducted from KRW 18,43,00 (illegal residence compensation) to KRW 2,425,974 (illegal residence compensation) as well as expenses for management and installation in arrears (= KRW 2,257,220 + KRW 97,270 + KRW 71,484), the lease deposit to be refunded to the Plaintiff is KRW 16,007,026 (= KRW 18,43,000 - KRW 2,425,974). The Plaintiff’s re-claim is reasonable within the scope of the above recognition, and the remainder is without merit.

D. Sub-committee

Therefore, Defendant 1 is obligated to deliver the first apartment house to the Plaintiff at the same time with the payment of KRW 16,007,026 from the Plaintiff.

3. Determination as to the claim against Defendant 2

A. The plaintiff's assertion

As long as the Korea Deposit Insurance Corporation requested the Plaintiff to suspend the renewal of the lease agreement between Defendant 2 and the Plaintiff with respect to the claim for the lease deposit against Defendant 2, the Plaintiff cannot set up against the Korea Deposit Insurance Corporation to renew the lease agreement. Since the lease agreement was terminated upon the expiration of the lease agreement, Defendant 2 is obligated to deliver the Plaintiff the second apartment that is the object of the lease agreement to the Plaintiff.

B. Determination

In full view of the following circumstances that recognize the overall purport of the pleading as a whole, the lease agreement on the second apartment between the plaintiff and the defendant 2 should be renewed. Thus, the plaintiff's claim on the premise that the contract term expires due to the expiration of the contract term is without merit.

1) According to Article 32(1) and (3) of the former Rental Housing Act (wholly amended by Act No. 13499, Sept. 28, 2015; hereinafter the same), a person who intends to enter into a lease contract for a rental house shall use a standard lease contract prescribed by Ordinance of the Ministry of Land, Infrastructure and Transport. A rental business operator and a lessee shall comply with a lease contract entered into by using the standard lease contract. Article 10(1) of the term of a standard lease contract (Article 21 and Form 20 of the Enforcement Rule of the same Act) enacted pursuant to the above provision provides that where a lessee commits an act falling under any of the subparagraphs of Article 10(1) of the term of a standard lease contract (Article 21 and Form 20 of the Enforcement Rule of the same Act), a lessor may terminate the lease contract or refuse to renew the lease contract for a rental house subject to the Rental Housing Act, unless there is a reason falling under any of the subparagraphs of Article 10(1) of the said Act.

In this case, the Plaintiff’s assertion that “The reason why the Korea Deposit Insurance Corporation received a seizure and collection order with respect to the claim for the return of the lease deposit against Defendant 2’s Plaintiff, and then requested the Plaintiff to suspend the renewal of the lease contract” is apparent to be that the lessor’s refusal of renewal under Article 10(1) of the General Conditions of the Contract does not constitute a reason for the lessor to refuse the renewal. Therefore, the Plaintiff cannot refuse the renewal of the lease contract on this ground.

2) As for the second apartment house, the Plaintiff cannot sell it before the expiration of the mandatory rental period of 30 years (Article 16(1)2 of the former Rental Housing Act) (Article 16(1)2 of the former Rental Housing Act). Unless there exist grounds falling under Article 10(1) of the general terms and conditions of the contract as seen earlier, the renewal of the lease contract may not be refused. Accordingly, Defendant 2 may assert the renewal of the lease contract unless there exist grounds for refusal to renew the lease contract under the status of maintaining the eligibility to move

Considering the lease term and the purport of the Rental Housing Act for the purpose of stabilizing the residential life of the people, the Korea Deposit Insurance Corporation that received seizure and collection orders as to claims to return the deposit money for the rental housing should be deemed to have been granted collection authority regarding claims to return the deposit money for the lease deposit under the contract premised on the renewal of the lease contract every two years within the mandatory rental period unless there exists any reason for refusal to renew the lease contrary to the general lease agreement stipulated in the short term.

3) In addition, if it is deemed that the lease contract was not lawfully renewed, the lease deposit, which the Plaintiff owes the duty to return as the garnishee of the seizure and collection order, is limited to the remainder remaining after deducting illegal residence compensation, etc. which was incurred before Defendant 2 ordered the second apartment. Pursuant to Article 246(1)6 subparag. 2 of the Civil Execution Act, among the lease deposit for the second apartment in Metropolitan City, the portion below KRW 20,000,000 among the lease deposit for the second apartment in Metropolitan City constitutes the claim to prohibit seizure.

4. Conclusion

Thus, the plaintiff's claim against the defendant 1 is accepted within the scope of the above recognition, and the remaining claim is dismissed as without merit. The part against the defendant 2 among the judgment of the court of first instance as to the defendant 1 is unfair with different conclusions, and thus, it is modified as above by accepting the plaintiff's appeal. The part against the defendant 2 is just in conclusion, and the plaintiff's appeal is dismissed as it is without merit.

[Attachment]

Justices Kim Sung-young (Presiding Justice)

(1) Article 16 (Restriction, etc. on Sale of Rental Housing) (1) of the former Rental Housing Act may not be sold unless the period under any of the following subparagraphs (hereinafter referred to as the “mandatory rental period”) has elapsed;

(3) The scope and criteria of a specified amount of a deposit of a tenant and a deposit to be preferentially reimbursed pursuant to paragraph (1) shall be prescribed by Presidential Decree following deliberation by the Housing Lease Committee under Article 8-2: Provided, That the scope of and standards for a specified amount of a deposit shall not exceed 1/2 of the housing price (including the price of a site). (1) The scope of and standards for a specified amount of a deposit to be preferentially reimbursed pursuant to Article 8 of the Enforcement Decree of the Housing Lease Protection Act shall not exceed the amount classified as follows: