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South Korea Commercial Lease Laws: Complete Guide to the Commercial Building Lease Protection Act

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Comprehensive overview of South Korea's commercial property lease regulations including converted deposit thresholds, 10-year renewal rights, key money prote...

Melvin Prince
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مُتحقق منه Mar 2026South Korea flag
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Commercial property leasing in South Korea is governed by the Commercial Building Lease Protection Act, which provides tenant protections distinct from those available under the residential Housing Lease Protection Act. With longer renewal periods, key money (gwolligeum) protection, and unique converted deposit thresholds, commercial landlords must navigate a specialized regulatory landscape.

Commercial Framework
Commercial Building Lease Protection Act
Dispute Resolution
Housing Lease Dispute Mediation Committee / Civil Court

Key Regulations at a Glance

TopicKey RuleStatute
Minimum Lease Term1 year guaranteedArt. 9
Contract Renewal RightUp to 10 years totalArt. 10
Rent Increase Cap5% of existing rentArt. 11
Key Money ProtectionLandlord may not interfere with key money recoveryArt. 10-4
Termination Threshold3 months or more of rent arrearsArt. 10-8
Opposing PowerDelivery + business registrationArt. 3

Converted Deposit (Hwansan Bojeunggeum)

Calculation

Some protections under the Act apply only when the converted deposit falls below regional thresholds. The formula is:

Converted Deposit = Security Deposit + (Monthly Rent × 100)

Regional Thresholds

RegionThreshold
Seoul₩900 million
Overcrowding Control Zones / Busan₩690 million
Metropolitan cities (excl. rural areas) / Sejong / Paju / Hwaseong₩540 million
Other areas₩370 million

Rights That Apply Regardless of Converted Deposit

Even when the converted deposit exceeds the regional threshold, the following rights are guaranteed to all commercial tenants:

  • Opposing power (delivery + business registration)
  • Contract Renewal Request Right (10 years)
  • Key money recovery protection
  • Rent increase/decrease request rights

Key Differences from Residential Leases

FeatureResidentialCommercial
Governing lawHousing Lease Protection ActCommercial Building Lease Protection Act
Minimum term2 years1 year
Renewal right1 time (up to 4 years)Up to 10 years total
Termination arrears2 months3 months
Opposing powerDelivery + resident registrationDelivery + business registration
Statutory interest5% (civil)6% (commercial)
Key money protectionN/ALegally protected

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