This study is to research some problems with Business Building Lease Protection Act.
Due to the IMF situation, many lessees in business buildings experienced serious economical damages. In particular, because most merchants were leasing buildings or ...
This study is to research some problems with Business Building Lease Protection Act.
Due to the IMF situation, many lessees in business buildings experienced serious economical damages. In particular, because most merchants were leasing buildings or some of building spaces for their business operations, conflicts on those leases became serious damages on their living methods. For this reason, 'Business Building Lease Protection Act' were established by the strong arguments of civil organizations.
In short, the Act purports to strengthen commercial building lease rights and thereby, protect them against lessors' abuse of their rights.
Main items for tenant protection to be considered include the object, resistance power, lease period, rent, deposit, premium, etc. Thus, this study will review such items by comparing with various legislative cases in foreign countries and research the propriety and limit of the Business Building Lease Protection Act
However, the Act applies to those commercial buildings classified into those obliged to be registered with the tax registry, and a certain level of deposit money or below is protected by its enforcement ordinance. If a commercial building is not registered for a lease, its tenants can oppose a third party or have a priority to be paid first only the next day after it is occupied by the tenants and at the same time its tenants report to the tax authority about the lease.
In addition, the tenants can request the lessor to extend the lease contract for another 5 years or shorter, and those tenants who have not their deposit money refunded can request the court to have the building registered for a lease.
The reason why tenants' right, a kind of credit is strictly protected is that their deposit money which tends to be large should be refunded to them after expiration of the lease contracts.
Moreover, even if a building is not registered, its tenants' rights can be protected only if the building is occupied by them and they report to the tax authority about the lease. As a result, a bona fide third party may suffer a loss unexpectedly. Until the Act was enacted, the Civil Code had applied to the leases of commercial buildings. Thus, lease contracts were made in favor of lessors, and in case a building was sold out through an auction, its tenants were ousted without their deposits being refunded. In this regard, it was urgent and significant to enact such a special code to protect tenants' rights.
In this sense, Business Building Lease Protection Act is similar to Housing Lease Protection Act. Both codes purport to protect the economic and social weak or the tenants' rights.
However, the two codes differ in terms of scope of applications, period of lease, causes of withdrawals from contract, causes of refusal of contract renewal, and the price of buildings for preferential refundments. Such differences seem to be attributable to the compromise between protection of tenants' rights and market functions. Anyway, Business Building Lease Protection Act has many problems which need to be reviewed by future studies which will suggest their solutions.