Lease, 임대차(賃貸借)

 

A lease is a contract established by one party (the lessor) agreeing to use and profit the object to the other party (the lessee) and the other party to pay the rent in return. (Article 618 of the Korean Civil Code) A lease contract belongs to a paid contract, a bilateral contract, a falling contract, and a continuous contract.

In particular, unlike a consumption loan, a lease does not transfer ownership of an object to the other party, so the lessor does not need to have ownership of the lease or the authority to dispose of it.(Common wisdom, precedent: Supreme Court March 27, 1991, 88 Dakar 30702) [1]
In social life, there are many cases of borrowing and using other people's goods, and the most important relationship among borrowing and using other people's goods is lease. This is because free loans are rare except in special cases, and the owner is reluctant to establish a utility right that gives the right holder a strong status regarding the real estate, which is the object. Leases can be made as the object of either movable property or real estate, and in particular, leases of production facilities or real estate (excluding farmland) play a very important socioeconomic role. In addition, the reality of Korea is that the lease of a house or part of it plays a role in providing housing directly related to the life of the tenant. Accordingly, the Civil Act has created a new real right called the lease right to protect users of goods, while regulating leases a lot to protect real estate users. However, since real estate tenants are economically weak, they have no choice but to bear the disadvantage of not meeting the registration of the lease right, which is a counter requirement, and if the object is transferred to a third party, they have no choice but to vacate the house. If the house you live in is transferred to a third party, the legal principle of "selling breaks the lease" will be observed, but tenants often lose their place to live by returning the object. In order to eliminate these social problems and promote housing stability for the common people, the Housing Lease Protection Act was enacted to take protective measures such as the delivery of housing and the transfer of resident registration (Article 3).


Leases differ from consumption loans in that they cannot acquire ownership because the tenant must return the lease itself at the end of the contract, and are the same as use loans, but different from use loans in that they have to pay rent. The duration of the lease set by the contract is the longest 20 years, and when a period exceeding this is agreed, it is shortened to 20 years (Article 651 (1) of the Civil Act). On the other hand, there is no restriction on the shortest period of lease, so the parties may freely decide. However, if the contract period is deemed too unreasonable in light of the purpose of the lease, it is a general view that the shortest duration of the lease should be interpreted as a period determined to pay the rent unless special circumstances exist. However, in the case of housing, the shortest duration is two years under the Housing Lease Protection Act (Article 4). If the period is not set by a contract, the party may notify the termination of the contract at any time (Article 635 (1)). If there is a notice of termination of the contract, the lease relationship will be terminated, but in this case, the party receiving the notice of termination may suffer unexpected losses, so certain restrictions are set for this (Article 635 (2)). In other words, in the lease of real estate, the termination takes effect in June if the lessor gives a notice of termination, and in the lease of movable property, the termination takes effect after five days from the date of receipt of the notice. The provisions on the restriction of the effect of this notice of termination shall also apply mutatis mutandis to the case where one or both parties have withheld the right to termination in a lease with a term agreement (Article 636).

the expiration of a lease

The lessor must deliver and maintain the necessary condition so that the lessee can use and profit from the object while the contract persists (Article 623), and the necessary expenses spent by the lessee on the object must be repaid soon, and the beneficial expenses are also repaid under certain conditions (Article 626). In addition, since the lease is a paid contract, the lessor bears the same security responsibility as the seller for the home payment of the object (Article 567). The lessee shall use and profit from the leased object using the contract or its nature (Article 654, 610 (1)), pay the agreed rent (Article 618), and keep the object with the care of a good manager until it is returned to the lessor at the end of the lease relationship (Article 374). The lease shall be terminated by the expiration of the duration, notice of termination of the contract (Article 635 (1), 652, 636, 637) and termination in certain cases (Article 625, Article 627 (2), Article 629 (2), Article 640 and 641).[2]

If there is no opposition agreement between the parties, the real estate tenant may request the lessor to cooperate in the lease registration procedure.(Article 621 (1)) When a real estate lease is registered, it becomes effective against a third party from that time. (Article 621 (2)) However, unlike the right to preferential repayment is recognized in the case of a lease right, the right to preferential repayment is not recognized in the case of a registered lease right.