"Inconvenience from Leak Repairs Not Grounds for Termination of Lease, Court Rules"... Tenant's Claim Dismissed

[The Financial News] The court has ruled that the difficulty of operating a business during repair work does not constitute grounds for terminating a lease agreement. The court clarified that termination is only justified when the tenant is substantially prevented from using the property, not merely inconvenienced.
On the 8th, according to legal sources, Judge Seo-Hyun Jung of the Seoul Central District Court partially upheld a claim filed by Mr. A, a commercial tenant, against landlord Mr. B. Mr. A sought the return of a 50 million won deposit, 50 million won in damages, and the surrender of the property. The court ordered Mr. B to return only 19.38 million won to Mr. A.
In April 2023, Mr. A leased the first floor of a commercial building owned by Mr. B to operate a raw fish restaurant. The deposit was 50 million won, monthly rent was 2.8 million won, and the lease term was two years, from April 30, 2023, to April 30, 2025.
A leak occurred in the basement of the same building owned by Mr. B, who decided to carry out repairs in Mr. A's kitchen on the upper floor to resolve the issue. Both parties agreed that Mr. A would clear the kitchen and provide the entrance password. The repairs were conducted from September 1 to 16, 2023.
Afterward, Mr. A notified Mr. B of the lease termination, claiming that Mr. B had blamed him for the leak and interfered with his business. Mr. A argued that the leak made it impossible to use the premises as intended.
Conversely, Mr. B filed a counterclaim, asserting that Mr. A had failed to pay rent more than three times since August 2023, which itself constituted grounds for termination.
The court did not accept Mr. A's claim for termination. The judge stated, "Even if Mr. A may refuse to pay rent or claim compensation for business interruption during the repair period, this does not justify terminating the lease itself." The court also found that "the landlord did not carry out repairs against the tenant's will."
Article 625 of the Civil Act of the Republic of Korea allows a tenant to terminate the contract if the landlord performs repairs against the tenant's will, thereby preventing the tenant from using or profiting from the property. The court noted that Mr. A had cleared the kitchen and provided the entrance password before the repairs, indicating that the work was not done against his will.
The court also considered that Mr. A had posted a 'temporarily closed' notice at the shop entrance during the repairs and operated another branch nearby, allowing customers to be redirected. Therefore, the court concluded that the two-week repair period did not render the property unusable or defeat the purpose of the lease.
Ultimately, the court determined that the lease ended when Mr. B filed the counterclaim and notified Mr. A of the termination on May 31, 2024. Mr. B was ordered to return 19.38 million won to Mr. A, excluding unpaid rent and plumbing repair costs.
The court also dismissed the remainder of Mr. A's claim for damages, stating, "Apart from the 16 days of business suspension required for the kitchen waterproofing work, there is no evidence that Mr. A was unable to operate the business due to any improper interference by Mr. B."


scottchoi15@fnnews.com Choi Eun-sol Reporter