Article 6-3 (1) 8 of the Housing Lease Protection Act stipulates that a lessor’s or any of his/her lineal ascendants or descendants’ (collectively, the “Lessor”) intent to actually reside in leased premises constitutes grounds for refusing a lessee’s exercise of his/her right to request the renewal of a lease agreement.
In the Supreme Court Decision 2022Da279795, rendered on December 7, 2023 (the “Supreme Court Decision”), the Supreme Court ruled that the mere expression of intent by the Lessor to actually reside in the leased premises cannot be recognized as the existence of the “Intent to Occupy as Actual Residency by the Lessor.” The Supreme Court established detailed standards for determining whether or not such intent exists by holding that the existence of such intent can only be confirmed when circumstances demonstrate, to a generally acceptable degree, that such intent is genuine and not fabricated.
The details of the Supreme Court Decision are outlined below:
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Case Overview
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The lessor in this case notified the lessee of his decision not to renew the lease, citing his intention to reside in the premises following the urgent sale of another existing apartment unit he owned. Upon the lessee’s request for renewal subsequent to receiving the notice, the lessor rejected the renewal request once more, citing his plans to bring his elderly parents to Seoul and reside in the premises, which are conveniently located near a hospital.
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Lower Court’s Decision
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The lower court ruled based on a general principle that the lessor’s refusal to renew the lease agreement should be considered lawful unless there are exceptional circumstances indicating that the lessor did not genuinely intend to actually reside in the property. This is because (i) it is not easy to prove the “actual residency” element, as it is related to future circumstances based on the lessor’s subjective intent, and (ii) it is challenging for the lessor to establish a concrete and definitive relocation plan in advance.
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The lower court ruled that the lessor’s refusal to renew the lease agreement was justifiable because (i) the lessor’s intention to actually reside in the premises appeared probable, and (ii) the lessor did not provide false information regarding family relationships or property ownership status, nor did he engage in any actions clearly contradicting his intended plans to actually reside in the premises.
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Supreme Court Decision
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The Supreme Court, however, ruled that the lessor’s intent to actually reside in the premises cannot be recognized solely based on a mere expression of intent. Instead, the Supreme Court noted that such intent should be recognized and confirmed only when there are “circumstances showing, to a generally acceptable degree, that the lessor’s intent is genuine and not fabricated.” This determination should be made by considering a totality of various circumstances and factors such as the lessor’s current residential situation, the social context of the lessor or his family, the events leading to the lessor’s intention to reside, the existence of any inconsistencies between the lessor’s words or actions that contradict his intent to actually reside in the premises, and the existence of preparations made to relocate to the premises, among others.
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Applying the foregoing legal principle, the Supreme Court reversed and remanded the lower court’s decision, which determined the lessor’s refusal to renew the lease agreement as lawful. The Supreme Court ruled that it was insufficient to conclude, to a generally acceptable degree, that the lessor’s intent was not fabricated considering the following: (i) the lessor resided in another area for his child’s education at the time of the refusal to renew the lease, (ii) there were no preparations carried out by the lessor to organize his life in the other city, including relocating and transferring his children to a different school, and (iii) although the lessor’s parents’ outpatient treatment certificates showed that they had received one to five treatments at the hospital near the leased premises in one year, this fact alone does not expressly prove that lessor’s intent was not fabricated.
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This Supreme Court Decision is meaningful as it provides detailed guidelines on what constitutes a “case of actual residence” based on which a lessor can reject the lessee’s request for lease renewal under the Housing Lease Protection Act. It can therefore be used as a court precedent in assessing whether or not a lessor can reject a lessee’s request for lease renewal in a residential lease context.
However, this Supreme Court Decision is a court case under which the Supreme Court ruled that the evidence presented by the lessor was insufficient to substantiate his intention for actual residency. Reviewing subsequent court rulings that recognize the genuineness of the lessor’s intention for actual residency would be critical in gauging the level of evidence that is needed for substantiating a lessor’s intention for actual residency.
[Korean Version]
