[1] The meaning of "a lease which is concluded or renewed for the first time after the enforcement of this Act" under Article 2 of the Addenda to the Commercial Building Lease Protection Act (amended by Act No. 15791, Oct. 16, 2018); and whether the lease is included in cases where the lease is not renewed after the expiration of the period of mandatory lease under the Act prior to the enforcement of the amended Act and the expiration of the period of termination (negative)

[2] In a case where Party A, a lessor of a commercial building, requested Party B to renew the lease agreement after notifying Party B of his/her intention not to renew the lease agreement at least three months prior to the expiration of the lease period, following agreement with Party B, the case holding that Party B cannot be required to renew the lease agreement on the ground that the lease agreement was terminated after the expiration of the lease period after the enforcement of the Commercial Building Lease Protection Act as amended by Act No. 15791, Oct. 16, 2018

[1] Article 10(1) and (3) of the Commercial Building Lease Protection Act (hereinafter “Commercial Building Lease Protection Act”) provides that, with respect to the right to request renewal of a contract between six months and one month before the expiration of the lease term, a lessor may not refuse the renewal unless there is any reason prescribed by the proviso of paragraph (1), and shall be deemed to have been a new contract under the same conditions as the former lease. Article 10(2) of the former Commercial Building Lease Protection Act (amended by Act No. 15791, Oct. 16, 2018; hereinafter “Revised Commercial Lease Protection Act”) provides that, with respect to the right to request renewal of a contract between six months and one month before the expiration of the lease term, a lessor may exercise the right to request renewal, including the initial lease term, only within the extent that the entire lease term does not exceed five years, and Article 10(2) of the amended Commercial Lease Lease Protection Act provides that, “The amended provisions of Article 10(2) of the same Act shall either be amended or renewed for the first time.”

In light of the language, content, and structure of the foregoing provisions, “a lease initially concluded or renewed after the enforcement of this Act” under Article 2 of the Addenda to the amended Commercial Building Lease Act refers to a lease that was concluded after October 16, 2018, or on or before October 16, 2018, which was concluded for the first time after the enforcement of the amended Commercial Building Lease Act, but which is renewed due to the reasons for renewal of a contract that was recognized before or after October 16, 2018. Therefore, this does not include cases where the term of the mandatory lease under the Act prior to the enforcement of the amended Act expires and the term of the lease expires without the expiration, etc.

[2] In a case where Party A, a lessor of a commercial building, requested Party B to renew the lease agreement after notifying Party B of his/her intention not to renew the lease agreement three months prior to the expiration of the lease period extended by seven years in total by agreement with Party B, the case holding that the lease agreement was not renewed after the expiration of the lease period due to Party B’s legitimate refusal to renew the lease agreement since Party B’s compulsory renewal of the lease agreement was five years pursuant to Article 10(2) of the former Commercial Building Lease Protection Act (amended by Act No. 15791, Oct. 16, 2018) and Party B’s due to Party B’s legitimate refusal to renew the lease agreement, the lease agreement was not renewed after the expiration of the lease period after Party B’s legitimate expiration of the lease period, and therefore, the lease agreement cannot be renewed for the reason that Article 10(2) of the amended Commercial Building Lease Protection Act applies to the above lease agreement.

[1] Article 10(1), (2), and (3) of the Commercial Building Lease Protection Act; Article 2 of the Addenda (Amended by Act No. 15791, Oct. 16, 2018); Article 10(2) of the former Commercial Building Lease Protection Act (Amended by Act No. 15791, Oct. 16, 2018) / [2] Article 10(1), (2), and (3) of the Commercial Building Lease Protection Act; Article 2 of the Addenda (Amended by Act No. 15791, Oct. 16, 2018); Article 10(2) of the former Commercial Building Lease Protection Act (Amended by Act No. 15791, Oct. 16, 2018)

Plaintiff

Defendant

Daegu District Court Decision 2020Na302583 Decided June 10, 2020

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. Article 10(1) and (3) of the Commercial Building Lease Protection Act (hereinafter “Commercial Building Lease Protection Act”) provides that, with respect to the right to request renewal of a contract between six months and one month before the expiration of the lease term, a lessor may not refuse the renewal unless there is any reason prescribed by the proviso of paragraph (1), and shall be deemed to have been a new contract under the same conditions as the former lease. Article 10(2) of the former Commercial Building Lease Protection Act (amended by Act No. 15791, Oct. 16, 2018; hereinafter “Revised Commercial Lease Protection Act”) provides that, with respect to the right to request renewal of a contract between six months and one month before the expiration of the lease term, a lessor may exercise the right to request renewal, including the initial lease term, only within the extent that the entire lease term does not exceed five years, and Article 10(2) of the amended Commercial Lease Lease Protection Act provides that, “The amended provisions of Article 10(2) of the same Act shall either be amended or renewed for the first time.”

In light of the language, content, and structure of the foregoing provisions, “a lease initially concluded or renewed after the enforcement of this Act” under Article 2 of the Addenda to the amended Commercial Building Lease Act refers to a lease that was concluded after October 16, 2018, or on or before October 16, 2018, which was concluded for the first time after the enforcement of the amended Commercial Building Lease Act, but which is renewed due to the reasons for renewal of a contract that was recognized before or after October 16, 2018. Therefore, this does not include cases where the term of the mandatory lease under the Act prior to the enforcement of the amended Act expires and the term of the lease expires without the expiration, etc.

2. Review of the reasoning of the lower judgment and the record reveals the following facts.

A. On July 20, 2012, the Plaintiff leased the instant building by setting the Plaintiff’s rent at KRW 2.5 million per annum to the Defendant.

B. After completing business registration on August 28, 2012, the Defendant has engaged in manufacturing business, such as oil, etc. in the instant building.

C. On July 30, 2014, the Plaintiff agreed to increase the rent of the instant lease agreement with the Defendant as KRW 3 million per annum and to extend the term of the lease by July 20, 2019. The Plaintiff drafted a lease agreement reflecting this content.

D. On April 6, 2019, the Plaintiff notified the Defendant that he/she had no intent to renew the instant lease agreement, and on the same day, the Defendant demanded the Plaintiff to renew the instant lease agreement.

3. Examining these facts in light of the legal principles as seen earlier, the compulsory term of lease for which the lessee’s right to request renewal is recognized is five years pursuant to Article 10(2) of the former Commercial Building Lease Protection Act. The Defendant requested renewal of the lease of this case to the Plaintiff on April 6, 2019 when the Defendant requested renewal of the lease of this case from July 20, 2012, five years have already elapsed since the lease of this case was already commenced since July 20, 2019, which was after the enforcement of the amended Commercial Building Lease Act upon the Plaintiff’s legitimate refusal of renewal. Accordingly, the lease of this case was not renewed after the expiration of July 20, 2019, which was after the enforcement of the amended Commercial Lease Lease Act upon the Plaintiff’s legitimate refusal of renewal. Accordingly, Article 10(2) of the amended Commercial Lease Lease Protection Act, which was enforced from October 16, 2018, the Defendant cannot request renewal of the lease of this case on the ground that the term of lease of this case is ten years.

For reasons indicated in its holding, the lower court determined that Article 10(2) of the amended Commercial Building Lease Act does not apply since the Defendant could no longer request the renewal of the instant lease more than five years after the period of the instant lease was more than the period of the obligatory lease after October 16, 2018 when the amended Commercial Building Lease Act enters into force, and accordingly, the instant lease was not renewed after the expiration of the period of validity. In so doing, the lower court is justifiable, and contrary to what is alleged in the grounds of appeal, there were no errors by misapprehending the rules of evidence, misapprehending the legal doctrine on the violation of the rules of evidence,

4. Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim H-soo (Presiding Justice)