South Korea Commercial Lease Laws: Complete Guide to the Commercial Building Lease Protection Act
Comprehensive overview of South Korea's commercial property lease regulations including converted deposit thresholds, 10-year renewal rights, key money protection, and tenant safeguards.
Legal Disclaimer
This content is for general informational and educational purposes only. It does not constitute legal advice and should not be relied upon as such. Laws change frequently — always verify current regulations and consult a licensed attorney in your jurisdiction for advice specific to your situation. Landager is a property management platform, not a law firm.
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.
Disclaimer: This guide provides general legal information for educational purposes only and does not constitute legal advice. Always consult a licensed attorney in South Korea for guidance specific to your situation. Information last verified: March 2026.
Key Regulations at a Glance
| Topic | Key Rule | Statute |
|---|---|---|
| Minimum Lease Term | 1 year guaranteed | Art. 9 |
| Contract Renewal Right | Up to 10 years total | Art. 10 |
| Rent Increase Cap | 5% of existing rent | Art. 11 |
| Key Money Protection | Landlord may not interfere with key money recovery | Art. 10-4 |
| Termination Threshold | 3 months or more of rent arrears | Art. 10-8 |
| Opposing Power | Delivery + business registration | Art. 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
| Region | Threshold |
|---|---|
| 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
| Feature | Residential | Commercial |
|---|---|---|
| Governing law | Housing Lease Protection Act | Commercial Building Lease Protection Act |
| Minimum term | 2 years | 1 year |
| Renewal right | 1 time (up to 4 years) | Up to 10 years total |
| Termination arrears | 2 months | 3 months |
| Opposing power | Delivery + resident registration | Delivery + business registration |
| Statutory interest | 5% (civil) | 6% (commercial) |
| Key money protection | N/A | Legally protected |
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Sources & Official References
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