The Commercial Building Lease Protection Act does not apply to all lease cases, and in principle, it applies when the conversion deposit is below the standard amount. However, in certain cases, it applies even when the conversion deposit is above the standard amount. For example, we have looked at the existence of the right to oppose and the right to request renewal in the past two articles.
This time, let's look at the last of the provisions that apply regardless of the amount of the conversion deposit, which is the guarantee of the opportunity to recover the key money.
Protection of the opportunity to recover key money under the Commercial Lease Protection Act
In the case of a commercial tenant, a considerable amount of facilities and fixtures are invested in the commercial space for use during the lease period. Furthermore, activities are conducted to secure and maintain customers through promotion of store operations, which become the intangible assets of the tenant. However, the intangible assets of the tenant are not rights that can be demanded from the landlord for guarantee, but rather rights that can be recovered when the lease is transferred to another person. Therefore, without the cooperation of the landlord, it is practically impossible to recover the key money, and the Commercial Building Lease Protection Act imposes a duty of cooperation on the landlord so that the commercial tenant can recover these intangible assets when the lease agreement ends.
In other words, if a tenant transfers the lease to another person from 6 months before the end of the lease period to the end of the lease and requests the building owner to approve the transfer of the lease, approval cannot be denied unless there are special reasons as stipulated in the Commercial Building Lease Protection Act (Article 10-4 of the Commercial Building Lease Protection Act).
Furthermore, if the landlord refuses approval without special reason or interferes with the transfer of the lease, the lesser amount between the key money to be paid and the key money at the time of termination of the lease must be paid to the tenant. Therefore, the tenant can transfer the lease to another person before the termination of the lease agreement and recover the key money with the cooperation of the landlord, or, if the landlord does not cooperate, claim the equivalent amount of the key money as damages to recover the key money.
However, these rights expire if not exercised within three years after the end of the lease.
Protection of the opportunity to recover key money under the Commercial Lease Protection Act
This key money is a valuable asset formed through the investment of time, effort, and money by the lessee, and the Commercial Building Lease Protection Act protects it regardless of the amount of the conversion deposit, considering its importance (Commercial Building Lease Protection Act, Article 2, Paragraph 3, Article 10-4). Therefore, even if the rent exceeds 10 million won, if the requirements for key money protection stipulated in the Commercial Building Lease Protection Act are met, the key money can be recovered, so you should not overlook this right and miss the opportunity to recover the key money.
Furthermore, please keep in mind that the opportunity to recover these key money must be exercised within three years after the end of the lease.
Attorney Sunjin Kim has been mediating franchise disputes based on coexistence for the past 10 years and is working to restore the franchise to its original state. KLF handles nearly 100 franchise lawsuits every year and is Korea's top franchise-specialized law firm that serves as an advisor to several franchise companies.
KLF Franchise Law Firm Room 205, 2nd floor, 151 Seochojungang-ro, Seocho-gu, Seoul 02-738-9600
