When renting a commercial space and running a business, significant expenses are incurred, including interior design, kitchen facilities, and signage. However, disputes often arise over what to do with these facilities when the lease expires. Landlords often demand restoration, while tenants insist on leaving them as they are. The "right to demand purchase of accessories" plays a crucial role in these situations.
■ What is the right to purchase accessories?
Article 646 of the Civil Act states, "At the end of the lease, a tenant may demand the purchase of any items installed with the landlord's consent or any accessories purchased from the landlord." Simply put, this right allows the tenant to demand that the landlord purchase any facilities installed with the landlord's permission at the end of the lease.
This system was created to help tenants recover some of their costs and prevent the wasteful demolition of still-useful facilities. Furthermore, this right is a "formation right," meaning it takes effect immediately upon tenant request, even without the landlord's consent.
■ How do I obtain this right?
The following conditions are required for the right to purchase accessories to be recognized:
1) Must be a lease of a building or facility: This does not apply to land leases. It must be a building or facility (e.g., commercial space, factory, etc.).
2) The lease must have ended: The term must have expired or been legally terminated.
3) Must be an independent facility: It must be an independent, separable facility, not part of a building. For example, a restaurant's kitchen facilities or heating and cooling systems are acceptable, but specialized machinery required only for a specific industry may not be.
4) Landlord's consent required: This is only possible if the tenant installed the facility with the landlord's consent or purchased it directly from the landlord.
■ Cases where there are restrictions on exercising rights
However, the right to purchase accessories cannot be used in the following cases:
1) When the tenant breaches the contract: For example, if the landlord terminates the contract due to multiple late rent payments, the tenant cannot assert this right. The court held that "recognizing rights even to those who have breached the contract violates the principle of good faith."
2) When there is a special provision stating "waiver": Under civil law, any agreement that is disadvantageous to the tenant is generally void. Therefore, even if a clause states, "The tenant waives the right to purchase the accessory property," it is generally invalid. However, in exceptional circumstances, such as when the tenant waives the right in exchange for a very low rent, the clause may be deemed valid.
■ What happens when you exercise your rights
When a tenant exercises his or her right to purchase an accessory, a sales contract is established as soon as the notice of intent reaches the landlord. The sales price is determined based on the market price at the time the right is exercised. Furthermore, the tenant is not required to deliver the building until the landlord pays the rent. However, if the tenant continues to use the building during this period, he or she may be required to return the amount used (equivalent to rent).
■ Useful practical tips to know
The right to demand purchase of accessories is a "final safeguard" to protect the funds invested by tenants for business operations. However, in practice, disputes are frequent due to the difficulty in proving detailed requirements, such as the landlord's consent and the facility's independence. Therefore, tenants should always obtain written consent from the landlord before installing the facility, and landlords should clearly state provisions regarding the handling of accessories in their contracts.
The right to demand purchase of accessories is a very beneficial system for tenants. To avoid unfair losses at the end of a lease, be sure to carefully consider it from the contract stage.
