South Korea Commercial Eviction Process: 3-Month Arrears, Key Money Obligations, and Court Procedures
Guide to commercial tenant eviction in South Korea including the 3-month arrears threshold, renewal refusal grounds, key money recovery duties, and eviction ...
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Evicting a commercial tenant in South Korea follows similar procedural requirements to residential eviction but with a higher arrears threshold and additional obligations around key money (gwolligeum) protection.
Commercial Eviction Process in national
Issue Breach Notice
Serve a formal written breach notice specifying the default and cure period.
Allow Remedy Period
Give the tenant opportunity to fix the breach within the specified time.
Terminate Lease
Issue a termination notice if the breach remains unresolved.
Court Action
Apply to Housing Lease Dispute Mediation Committee / Civil Court for a possession order if the tenant refuses to vacate.
Legal Grounds for Termination
Key difference: Commercial leases require 3 months of cumulative rent arrears for termination, compared to 2 months for residential leases.
Renewal Refusal Grounds
When a tenant exercises the Contract Renewal Request Right, the landlord may refuse only for:
- 3 or more months of rent arrears
- Obtaining the lease by fraud or improper means
- Unauthorized subletting
- Serious property damage through willful or gross negligence
- Planned demolition or reconstruction (with compensation or equivalent offer)
- Material breach of tenant obligations after reasonable cure period
- Other statutory grounds
Key Money and Eviction
Landlord's Obligation
From 6 months before lease termination through the termination date, the landlord must not interfere with the tenant's ability to recover key money from an incoming tenant.
Prohibited Interference
- Refusing to contract with a prospective tenant introduced by the outgoing tenant without just cause
- Demanding significantly higher rent or deposit from the prospective tenant
- Demanding significantly higher key money from the prospective tenant
- Other acts that obstruct key money recovery
Key Money Protection After 10 Years
Per Supreme Court precedent, key money recovery protection continues even after the 10-year renewal period has expired. This is a significant consideration for landlords.
Damages for Interference
Landlords who interfere with key money recovery face damages liability, calculated based on the lower of the agreed key money or the market-rate key money at lease termination.
Eviction Procedure
Step 1: Certified Notice
Send formal termination and vacate notice via certified mail.
Step 2: Preliminary Injunction
File for an order preventing possession transfer during litigation.
Step 3: Eviction Lawsuit
Step 4: Forced Execution
After final judgment, apply for court-supervised forced vacating.
Deposit and Eviction Relationship
- Deposit return and premises surrender are simultaneous obligations
- An eviction without offering deposit return may be dismissed
- Overdue rent may be deducted from the deposit
Best Practices for Landlords
- Track the 3-month arrears threshold carefully — cumulative, not necessarily consecutive
- Understand key money obligations — interference exposes you to significant damages
- Verify renewal refusal grounds before sending notice
- Define restoration scope upfront — especially for tenant-installed interiors
- Engage specialized legal counsel — commercial disputes tend to involve large sums
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