Auction tenant notices completely overhauled... “To prevent tenants from missing the deadline to claim distributions and losing their deposits”

[Financial News] The judiciary has completely overhauled the “Tenant Notice” sent to tenants during real estate auction proceedings. The move aims to prevent cases in which tenants miss the deadline to file a claim for distribution and consequently fail to receive their deposits.
The Supreme Court of Korea’s National Court Administration said on the 8th that it had revised the notices for residential and commercial tenants to provide guidance tailored to each tenant category, and that the new forms have been in use since August.
The Tenant Notice informs tenants that an auction is underway for the property and explains the procedures and precautions needed to protect their rights, including exercising preferential repayment rights. About 140,000 notices are sent each year.
The previous notices consisted of lengthy explanations, making it difficult for tenants to grasp the key points. As a result, some tenants failed to report their rights by the deadline to claim distributions and were excluded from receiving distributions, while courts at various levels repeatedly received the same inquiries. The deadline to claim distributions is set by the executing court after an auction begins. If tenants do not report their rights and file a claim for distribution by then, they may not receive their deposit from the sale proceeds, even if they meet the requirements for asserting their rights against third parties.
The revised notices categorize tenants as those with small deposits, those with a fixed-date stamp, or general tenants, and outline the requirements, necessary steps, and points to note for each category. Tenants with deposits at or below a specified amount may receive a set amount ahead of other secured creditors, while tenants who have obtained a fixed-date stamp are repaid according to their priority; the rights they can exercise therefore differ by category. Separate notices were created for residential and commercial properties to reflect differences in the systems for protecting tenants’ rights.
Information that is difficult to include on the paper notices has been moved to a QR code at the bottom of each notice. Scanning the code takes users to a tenant information page on the Court Auction Information Service website, where they can access auction case searches, a table of small-deposit amounts, forms for reporting rights, the Electronic Litigation Portal, and other resources.
A National Court Administration official said, “We expect this overhaul will help tenants exercise their rights on time without overlooking them,” and added, “We will continue to improve relevant systems and practices so that the rights of parties with an interest in auction proceedings are fully protected.”


[email protected] Kim Dong-gyu Reporter