{"id":1942,"date":"2026-08-29T03:18:21","date_gmt":"2026-08-29T03:18:21","guid":{"rendered":"https:\/\/atlaw.kr\/en-blog\/lease-succession-objection-auction-south-korea\/"},"modified":"2026-08-29T03:18:43","modified_gmt":"2026-08-29T03:18:43","slug":"lease-succession-objection-auction-south-korea","status":"publish","type":"post","link":"https:\/\/atlaw.kr\/en-blog\/lease-succession-objection-auction-south-korea\/","title":{"rendered":"Landlord Succession After a Foreclosure Sale in South Korea"},"content":{"rendered":"<p><!--  -->\n\n\n\n<!--  --><\/p>\n<p><!-- ATLAS_SEO_BLOCK_START --><\/p>\n<p><script type=\"application\/ld+json\">{\"@context\":\"https:\/\/schema.org\",\"@type\":\"Article\",\"@id\":\"https:\/\/atlaw.kr\/en-blog\/lease-succession-objection-auction-south-korea\/#article\",\"mainEntityOfPage\":{\"@type\":\"WebPage\",\"@id\":\"https:\/\/atlaw.kr\/en-blog\/lease-succession-objection-auction-south-korea\/#webpage\"},\"headline\":\"The Tenant Won Twice and Lost at the Supreme Court \u2014 Objecting to Landlord Succession After a Foreclosure Sale in South Korea\",\"description\":\"In South Korea, when a leased home is sold at auction the successful bidder succeeds to the landlord's position by operation of law and the former landlord is discharged from the deposit refund debt. A tenant may object within a reasonable period, but the Supreme Court rejected the objection on three grounds.\",\"datePublished\":\"2026-08-29T09:00:00+09:00\",\"dateModified\":\"2026-08-29T09:00:00+09:00\",\"inLanguage\":\"en-US\",\"author\":{\"@type\":\"Person\",\"@id\":\"https:\/\/atlaw.kr\/soyoung-park\/#person\",\"name\":\"Soyoung Park\",\"alternateName\":\"\ubc15\uc18c\uc601\",\"jobTitle\":\"Representative Attorney\",\"worksFor\":{\"@id\":\"https:\/\/atlaw.kr\/#legalservice\"}},\"publisher\":{\"@type\":\"LegalService\",\"@id\":\"https:\/\/atlaw.kr\/#legalservice\",\"name\":\"Atlas Legal\",\"url\":\"https:\/\/atlaw.kr\"},\"about\":[\"Landlord succession by operation of law, Housing Lease Protection Act Article 3(4)\",\"Tenant's objection to landlord succession within a reasonable period\",\"Whether the objection doctrine applies to a foreclosure auction purchaser\",\"Notice of termination given before the auction sale\",\"Effect of failing to file a demand for distribution\",\"Lease registration order against the auction purchaser\",\"Demand for distribution treated as notice of termination of the lease\",\"Opposing power against the purchaser for the undistributed deposit balance\",\"Loss of opposing power by moving out and the former landlord's continuing liability\",\"Supreme Court of Korea 2021Da251929\",\"Supreme Court of Korea 2001Da64615\",\"Supreme Court of Korea 94Da37646\",\"Supreme Court of Korea 96Da53628\",\"Supreme Court of Korea 2020Da276914\"]}<\/script><\/p>\n<p><script type=\"application\/ld+json\">{\"@context\":\"https:\/\/schema.org\",\"@type\":\"FAQPage\",\"@id\":\"https:\/\/atlaw.kr\/en-blog\/lease-succession-objection-auction-south-korea\/#faqpage\",\"inLanguage\":\"en-US\",\"mainEntity\":[{\"@type\":\"Question\",\"name\":\"My leased home in South Korea was sold at a foreclosure auction. Do I claim the deposit from the purchaser or the former landlord?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"From the purchaser, as a rule. Article 3(4) of the Housing Lease Protection Act provides that the transferee of a leased house is deemed to have succeeded to the landlord's position, and the Supreme Court treats this as succession by operation of law, so the transferee assumes the deposit refund obligation with discharging effect and the transferor leaves the lease relationship and is released from the obligation (Supreme Court of Korea, November 11, 2021, 2021Da251929). If, however, the tenant objects within a reasonable period from learning of the transfer, the former landlord's obligation does not extinguish (Supreme Court of Korea, September 4, 2002, 2001Da64615).\"}},{\"@type\":\"Question\",\"name\":\"Does the objection doctrine apply when the buyer acquired the property at auction rather than by sale?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"The Supreme Court proceeds on that premise. In a case where a third party acquired the property in a compulsory auction, the Court did not say the doctrine was inapplicable to auctions. It set out the 2001Da64615 rule and then examined only whether its requirements were met (Supreme Court of Korea, November 11, 2021, 2021Da251929). The first instance court stated expressly that the same doctrine applies where the landlord's position is succeeded through an auction (Suwon District Court Seongnam Branch, October 16, 2020, 2020Gadan203656). The objection was nevertheless rejected in that case.\"}},{\"@type\":\"Question\",\"name\":\"If I notify the landlord of termination before the auction sale, does that count as an objection?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"It does not. The Supreme Court held that even after a lease terminates, Article 4(2) of the Housing Lease Protection Act deems the lease relationship to continue until the deposit is returned, and that a notice of termination given while no sale had yet taken place in the auction proceeding does not by itself show that the tenant did not want succession (Supreme Court of Korea, November 11, 2021, 2021Da251929). An objection to succession must be made separately, after succession occurs, that is, after the tenant learns that the purchase price has been paid.\"}},{\"@type\":\"Question\",\"name\":\"Should I file a demand for distribution in the auction, or not?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"File it, if you intend to claim against the former landlord. The Supreme Court held that where a tenant with opposing power files a demand for distribution although the lease term has not ended, this clearly expresses that the tenant no longer wants the lease to continue and may be treated as notice of termination (Supreme Court of Korea, July 12, 1996, 94Da37646). Conversely, not filing one can only be regarded as an intention to assert the continuation of the lease against the highest bidder (Supreme Court of Korea, November 11, 2021, 2021Da251929). A demand for distribution is not itself an objection, however, because the tenant may still assert the undistributed balance against the purchaser, who succeeds to the landlord's position (Supreme Court of Korea, August 22, 1997, 96Da53628).\"}},{\"@type\":\"Question\",\"name\":\"Why does applying for a lease registration order against the purchaser hurt my case?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"Because it reads as an acknowledgement of succession. The Supreme Court listed, among the grounds for rejecting the objection, that the tenant applied for a housing lease registration order on the premise that the auction purchaser owed the deposit refund obligation (Supreme Court of Korea, November 11, 2021, 2021Da251929). Demanding the deposit from the former landlord while simultaneously demanding it from the purchaser may itself be assessed as contradictory conduct.\"}},{\"@type\":\"Question\",\"name\":\"If my objection succeeds, can I stay in the home?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"No. The effect of an objection is to be freed from the constraint of the succeeded lease relationship (Supreme Court of Korea, September 4, 2002, 2001Da64615), so the tenant can no longer assert the leasehold against the purchaser and must deliver possession. If the tenant does not object, by contrast, the tenant may assert the continuation of the lease against the purchaser until the undistributed balance is returned, even after filing a demand for distribution (Supreme Court of Korea, August 22, 1997, 96Da53628). The decision therefore turns on comparing the solvency of the purchaser with that of the former landlord.\"}},{\"@type\":\"Question\",\"name\":\"Is there any route other than an objection to reach the former landlord?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"Losing opposing power prevents succession from arising at all. The Supreme Court held that succession under Article 3(4) requires the tenant to hold opposing power, so that where the tenant does not hold it the landlord remains liable for the deposit even after the property is transferred, and that moving out after the auction site inspection and then claiming the remaining deposit from the former landlord is not contrary to the principle of good faith (Supreme Court of Korea, June 29, 2023, 2020Da276914). That tenant, however, had separately registered a chonsegwon, a registered real right over the property, and received distribution as a chonsegwon holder. Moving out without such protection forfeits both opposing power and priority payment rights.\"}}]}<\/script><\/p>\n<p><script type=\"application\/ld+json\">{\"@context\":\"https:\/\/schema.org\",\"@type\":[\"LegalService\",\"LocalBusiness\"],\"@id\":\"https:\/\/atlaw.kr\/#legalservice\",\"name\":\"Atlas Legal\",\"alternateName\":[\"\ubc95\ubb34\ubc95\uc778 \uc544\ud2c0\ub77c\uc2a4\",\"Atlas Law Firm\"],\"url\":\"https:\/\/atlaw.kr\/en\/home-en\/\",\"telephone\":\"+82-32-864-8300\",\"email\":\"info@atlaw.kr\",\"priceRange\":\"$$$\",\"address\":{\"@type\":\"PostalAddress\",\"streetAddress\":\"B-2901, 323 Incheon Tower-daero\",\"addressLocality\":\"Yeonsu-gu, Incheon\",\"addressRegion\":\"Incheon Metropolitan City\",\"postalCode\":\"22007\",\"addressCountry\":\"KR\"},\"geo\":{\"@type\":\"GeoCoordinates\",\"latitude\":37.399438,\"longitude\":126.629812},\"openingHoursSpecification\":[{\"@type\":\"OpeningHoursSpecification\",\"dayOfWeek\":[\"Monday\",\"Tuesday\",\"Wednesday\",\"Thursday\",\"Friday\"],\"opens\":\"09:00\",\"closes\":\"18:00\"}],\"areaServed\":[{\"@type\":\"Country\",\"name\":\"South Korea\"},{\"@type\":\"Place\",\"name\":\"Songdo International Business District\"},{\"@type\":\"Place\",\"name\":\"Cheongna International City\"},{\"@type\":\"Place\",\"name\":\"Yeongjong International City\"},{\"@type\":\"Place\",\"name\":\"Incheon\"},{\"@type\":\"Place\",\"name\":\"Seoul Metropolitan Area\"},{\"@type\":\"Place\",\"name\":\"Incheon Free Economic Zone (IFEZ)\"}],\"knowsAbout\":[\"Housing Lease Protection Act in South Korea\",\"Landlord Succession on Transfer of a Leased Home in South Korea\",\"Foreclosure Auction Procedure in South Korea\",\"Lease Deposit Recovery in South Korea\",\"Chonsegwon and Jeonse Deposits under Korean Law\",\"Residential Tenancy Disputes in South Korea\",\"Real Estate Litigation in South Korea\",\"Incheon Free Economic Zone (IFEZ) Legal Services\"],\"serviceType\":[\"Residential Lease Dispute Resolution\",\"Real Estate Litigation\",\"Foreclosure and Auction Advice\",\"Corporate Dispute Resolution\",\"Foreign Direct Investment Legal Services\"]}<\/script><\/p>\n<p><!-- ATLAS_SEO_BLOCK_END --><\/p>\n<style>@import url('https:\/\/cdn.jsdelivr.net\/gh\/orioncactus\/pretendard@v1.3.9\/dist\/web\/static\/pretendard.css'); 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} \/* \uc800\uc790 \ubc15\uc2a4 *\/ .author-box { display: flex; align-items: center; gap: 14px; padding-top: 40px; margin-top: 40px; border-top: 1px solid var(--rule); } .author-avatar { width: 56px; height: 56px; border-radius: 50%; object-fit: cover; flex-shrink: 0; align-self: flex-start; } .author-text { flex: 1; } .author-name { font-size: 18px; font-weight: 600; color: var(--navy); } .author-meta { font-size: 13px; color: var(--text); margin-top: 2px; } .author-link { display: inline-block; margin-top: 8px; font-size: 15px; font-weight: 600; color: var(--wine); text-decoration: none; } .author-link:hover { text-decoration: underline; } .author-section-label { font-size: 15px; font-weight: 700; letter-spacing: 1px; text-transform: uppercase; color: var(--muted); margin-bottom: 8px; } .author-detail { font-size: 16px; color: var(--text); line-height: 1.7; margin-bottom: 1px; } @media (max-width: 640px) { body { font-size: 15px; } p { font-size: 15px; } li { font-size: 15px; } .hero { padding: 32px 14px 24px; } .hero h1 { font-size: 22px; } .hero-title { font-size: 22px; } .hero-info { font-size: 12px; } .content { padding: 28px 0 60px; } .toc-nav { margin-left: -14px; margin-right: -14px; border-radius: 0; border-left: none; border-right: none; padding: 12px 4px; margin-bottom: 28px; } .toc-label { font-size: 16px; } .toc-nav ol li { font-size: 14px; padding: 3px 0; } h2 { font-size: 20px; margin: 44px 0 10px; } h3 { font-size: 15px; margin: 24px 0 8px; } .lead-text { font-size: 16px; } .summary-text { font-size: 15px; } .context-text { font-size: 14px; } .formula { flex-direction: column; padding: 16px 12px; } .f-num { font-size: 18px; } th { font-size: 13px; padding: 8px 10px; } td { font-size: 13px; padding: 8px 10px; } .faq-q { font-size: 14px; } .faq-item p:not(.faq-q) { font-size: 14px; } .author-box { display: block; overflow: hidden; } .author-avatar { float: left; width: 36px; height: 36px; margin-right: 10px; border-radius: 50%; } .author-section-label { display: inline; font-size: 11px; letter-spacing: 0; margin: 0 3px 0 0; } .author-name { display: inline; font-size: 14px; } .author-detail { clear: both; font-size: 13px; line-height: 1.55; margin-top: 8px; margin-bottom: 1px; } .author-detail ~ .author-detail { clear: none; margin-top: 2px; } .author-link { clear: both; display: block; font-size: 13px; margin-top: 8px; } p.closing { font-size: 14px; } }<\/style>\n<div class=\"hero\">\n  <span class=\"category-tag\">Construction &amp; Real Estate<\/span><\/p>\n<div class=\"hero-title\">The Tenant Won Twice and Lost at the Supreme Court<br \/>Objecting to Landlord Succession After a Foreclosure Sale in South Korea<\/div>\n<div class=\"hero-meta\">\n<div class=\"hero-info\">\n      <strong>Soyoung Park<\/strong> \u00b7 Representative Attorney, Atlas Legal<br \/>\n      Supreme Court of Korea, November 11, 2021, 2021Da251929 &nbsp;\u00b7&nbsp; Supreme Court of Korea, September 4, 2002, 2001Da64615 &nbsp;\u00b7&nbsp; Supreme Court of Korea, June 29, 2023, 2020Da276914\n    <\/div>\n<\/p><\/div>\n<\/div>\n<div class=\"content\">\n<div class=\"direct-answer\">\n    <strong>Key Answer:<\/strong> In South Korea, when a leased home is sold at a foreclosure auction, the purchaser <strong>succeeds to the landlord&#8217;s position by operation of law<\/strong> and the former landlord is <strong>discharged<\/strong> from the deposit refund obligation (Housing Lease Protection Act, Article 3(4)). A tenant may still reach the former landlord by <strong>objecting within a reasonable period from learning of the transfer<\/strong> (Supreme Court of Korea, September 4, 2002, 2001Da64615). In a case where a home appraised at KRW 234 million sold for <strong>KRW 31.19 million<\/strong>, a tenant holding a KRW 180 million deposit won at first instance and on appeal, but the Supreme Court reversed, holding that no objection had been made because the tenant (i) gave notice of termination before the sale, (ii) filed no demand for distribution, and (iii) obtained a lease registration order against the purchaser (Supreme Court of Korea, November 11, 2021, 2021Da251929).\n  <\/div>\n<div class=\"toc-nav\">\n<p class=\"toc-label\">Contents<\/p>\n<ol>\n<li><a href=\"#sec-1\">1. My leased home was sold at auction. Who owes me the deposit?<\/a><\/li>\n<li><a href=\"#sec-2\">2. Is there any way to reach the former landlord?<\/a><\/li>\n<li><a href=\"#sec-3\">3. Why did the first instance and appellate courts side with the tenant?<\/a><\/li>\n<li><a href=\"#sec-4\">4. On what grounds did the Supreme Court reverse?<\/a><\/li>\n<li><a href=\"#sec-5\">5. When is an objection actually accepted?<\/a><\/li>\n<li><a href=\"#sec-6\">6. Should the tenant file a demand for distribution?<\/a><\/li>\n<li><a href=\"#sec-7\">7. If the objection succeeds, must the tenant move out?<\/a><\/li>\n<li><a href=\"#sec-8\">8. Is there a route other than an objection?<\/a><\/li>\n<li><a href=\"#sec-9\">9. What should be done, and when?<\/a><\/li>\n<li><a href=\"#sec-10\">10. What this means for foreign residents and investors in South Korea<\/a><\/li>\n<li><a href=\"#sec-11\">11. Frequently asked questions<\/a><\/li>\n<\/ol><\/div>\n<p><\/p>\n<h2 id=\"sec-1\">1. My leased home was sold at auction. Who owes me the deposit?<\/h2>\n<p class=\"lead-text\">Korean residential leases usually run on a large refundable deposit rather than monthly rent. A tenant who has taken possession and completed a resident registration acquires <strong>opposing power<\/strong>, and with a fixed date stamp on the contract also acquires a <strong>priority payment right<\/strong>. What is far less widely understood is <strong>whom<\/strong> the tenant must sue when the home is sold at a foreclosure auction. The person who received the deposit is the former landlord, but the person the statute designates as obligor is the auction purchaser.<\/p>\n<blockquote><p>The transferee of a leased house (including a person who succeeds to the right to lease it) shall be deemed to have succeeded to the status of the lessor.<br \/><span class=\"cite\">\u2014 Housing Lease Protection Act, Article 3(4)<\/span><\/p><\/blockquote>\n<p>The Supreme Court of Korea treats this as <strong>succession by operation of law<\/strong>. Neither an agreement between the parties nor the tenant&#8217;s consent is required.<\/p>\n<blockquote><p>This is to be regarded as a provision on succession by operation of law, and therefore, where a leased house is transferred, the transferee succeeds, together with ownership of the house, to the entirety of the rights and obligations of the lessor under the lease contract. As a result, <strong>the transferee assumes the obligation to refund the lease deposit with discharging effect, and the transferor leaves the lease relationship and is released from the obligation to refund the deposit to the tenant.<\/strong><br \/><span class=\"cite\">\u2014 Supreme Court of Korea, November 11, 2021, 2021Da251929<\/span><\/p><\/blockquote>\n<p>The operative word is <strong>discharging<\/strong>. The purchaser does not merely join the obligation; the former landlord&#8217;s obligation <strong>ceases to exist<\/strong> at that moment. This happens without any declaration by the tenant, and even if the tenant does not know that ownership has changed.<\/p>\n<p>Ordinarily this structure favours the tenant. The former landlord has just been through a foreclosure and is often insolvent, whereas the purchaser has just acquired the property and the tenant may refuse to hand it over until the deposit is paid. The difficulty arises when the sale price falls far below the deposit.<\/p>\n<p><\/p>\n<h2 id=\"sec-2\">2. Is there any way to reach the former landlord?<\/h2>\n<p class=\"lead-text\">Yes. Korean case law recognises an <strong>objection right<\/strong> that appears nowhere in the statute. If the tenant states that it does not want the succession, the former landlord&#8217;s obligation does not extinguish.<\/p>\n<blockquote><p>In light of the legislative purpose of the Lease Protection Act, which is to protect tenants, where a tenant does not want succession to the lessor&#8217;s status, the tenant may free itself from the constraint of the succeeded lease relationship by <strong>raising an objection within a reasonable period from the time it learns of the transfer<\/strong> of the leased house, and in such a case <strong>the transferor&#8217;s obligation to refund the deposit to the tenant does not extinguish.<\/strong><br \/><span class=\"cite\">\u2014 Supreme Court of Korea, September 4, 2002, 2001Da64615<\/span><\/p><\/blockquote>\n<p>That judgment, however, concerned a <strong>voluntary transfer by sale<\/strong>. Practitioners were therefore long unsure whether the same doctrine reached a purchase at a foreclosure auction. The 2021Da251929 case addressed that question, and the first instance court answered it expressly.<\/p>\n<blockquote><p>This doctrine is properly regarded as applying equally to the present case, in which <strong>the lessor&#8217;s status is succeeded through an auction.<\/strong><br \/><span class=\"cite\">\u2014 Suwon District Court Seongnam Branch, October 16, 2020, 2020Gadan203656<\/span><\/p><\/blockquote>\n<p>The Supreme Court did not disturb that point. Rather than holding the objection doctrine inapplicable to auctions, it set out the 2001Da64615 rule and then examined only <strong>whether its requirements were satisfied<\/strong>. Exercising the objection right after an auction purchase is therefore possible in principle. The requirements, however, are strict.<\/p>\n<p><\/p>\n<h2 id=\"sec-3\">3. Why did the first instance and appellate courts side with the tenant?<\/h2>\n<p class=\"lead-text\">The figures define the case. The gap between the appraised value and the sale price is what makes it worth reading.<\/p>\n<table>\n<thead>\n<tr>\n<th>Date<\/th>\n<th>Event<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Feb 24, 2015<\/td>\n<td>Lease signed: deposit <strong>KRW 180,000,000<\/strong>, term April 30, 2015 to April 30, 2017<\/td>\n<\/tr>\n<tr>\n<td>Apr 30, 2015<\/td>\n<td>Possession taken, resident registration and fixed date obtained \u2014 opposing power and priority payment right secured<\/td>\n<\/tr>\n<tr>\n<td>May 1, 2017<\/td>\n<td>Lease impliedly renewed<\/td>\n<\/tr>\n<tr>\n<td>Sep 5, 2017<\/td>\n<td>Compulsory auction proceeding commenced<\/td>\n<\/tr>\n<tr>\n<td>Mar 2018<\/td>\n<td>First sale date \u2014 appraised value <strong>KRW 234,000,000<\/strong><\/td>\n<\/tr>\n<tr>\n<td>Feb 9, 2019<\/td>\n<td>Tenant notified the former landlord of termination by telephone, stating an intention to move out after the end of April and demanding a solution for the deposit<\/td>\n<\/tr>\n<tr>\n<td>Nov 6, 2019<\/td>\n<td>After repeated failed sales and re-auctions, sold for <strong>KRW 31,190,000<\/strong> (registered November 11)<\/td>\n<\/tr>\n<tr>\n<td>Jan 21, 2020<\/td>\n<td>Tenant sent the former landlord a certified letter demanding the deposit, copying the purchaser<\/td>\n<\/tr>\n<tr>\n<td>Feb 11, 2020<\/td>\n<td>Tenant obtained a housing lease registration order against the purchaser (registered February 18)<\/td>\n<\/tr>\n<tr>\n<td>Feb 12, 2020<\/td>\n<td>Suit filed naming the former landlord as primary defendant and the purchaser as alternative defendant<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>The property sold for <strong>13 per cent<\/strong> of its appraised value. An undistributed deposit held by a tenant with opposing power is a burden the purchaser must assume, and that burden depresses the sale price, so such properties often fail repeatedly and sell far below appraisal.<\/p>\n<p>The first instance court granted the tenant&#8217;s claim. Because notice of termination after implied renewal takes effect three months after the landlord receives it (Housing Lease Protection Act, Article 6-2(2)), the lease had ended around May 9, 2019, and even counting from the sale date of November 6, 2019, the suit filed on February 12, 2020 was an objection within a reasonable period.<\/p>\n<p>The appellate court dismissed the appeal, focusing in particular on the former landlord&#8217;s conduct.<\/p>\n<blockquote><p>Thereafter Defendant B never indicated to the tenant any plan or schedule for refunding the deposit, and <strong>did not even properly inform the tenant of the final outcome of the auction proceeding<\/strong> (\u2026) the plaintiff would have needed time to ascertain that outcome on her own and to decide whether to accept the constraint of the lease relationship succeeded between the defendants.<br \/><span class=\"cite\">\u2014 Suwon District Court, June 24, 2021, 2020Na92045<\/span><\/p><\/blockquote>\n<p>As to the lease registration order, the appellate court characterised it as a <strong>protective measure<\/strong> taken in case the objection argument failed. The tenant had now won twice.<\/p>\n<p><\/p>\n<h2 id=\"sec-4\">4. On what grounds did the Supreme Court reverse?<\/h2>\n<p class=\"lead-text\">The Court gave three reasons for finding that <strong>no objection had been raised<\/strong> and reversed the judgment below. All three concern the tenant&#8217;s own conduct, which makes them directly usable as practical warnings.<\/p>\n<h3>(i) Notice of termination given before the sale is not an objection<\/h3>\n<blockquote><p>Even where a lease has terminated, under Article 4(2) of the Housing Lease Act the lease relationship is deemed to continue until the tenant is refunded the deposit, and the above declaration of termination was made <strong>at a time when no sale had taken place in this auction proceeding<\/strong>; that circumstance alone does not show that the plaintiff did not want succession to the lessor&#8217;s status.<br \/><span class=\"cite\">\u2014 Supreme Court of Korea, November 11, 2021, 2021Da251929<\/span><\/p><\/blockquote>\n<p>Termination and objection are different acts. Termination ends the contract; an objection refuses to accept the <strong>new owner as landlord<\/strong>. Before a purchaser exists there is nothing to refuse. Moreover, because the lease is deemed to continue until the deposit is refunded, termination alone does not prevent succession.<\/p>\n<h3>(ii) Not filing a demand for distribution is conduct premised on succession<\/h3>\n<blockquote><p>The plaintiff, who held opposing power and a priority payment right, <strong>did not file a demand for distribution<\/strong> in this auction proceeding. This can only be regarded as an intention to exercise opposing power and <strong>assert the continuation of the lease relationship against the highest bidder<\/strong>, who would succeed to the lessor&#8217;s status, and it <strong>contradicts<\/strong> the plaintiff&#8217;s demand for refund of the deposit from the primary defendant, the former lessor.<br \/><span class=\"cite\">\u2014 Supreme Court of Korea, November 11, 2021, 2021Da251929<\/span><\/p><\/blockquote>\n<p>This is the most practically important passage. A tenant holding both opposing power and a priority payment right may elect which to exercise, and declining to file a demand for distribution is an election <strong>not to exercise the priority payment right but to retain opposing power and assert the lease against the purchaser<\/strong>. The Supreme Court held that this election contradicts a demand for the deposit from the former landlord.<\/p>\n<h3>(iii) A lease registration order against the purchaser is conduct premised on succession<\/h3>\n<blockquote><p>The plaintiff (\u2026) applied for a housing lease registration order over this property <strong>on the premise that the alternative defendant owed the plaintiff the obligation to refund the lease deposit.<\/strong><br \/><span class=\"cite\">\u2014 Supreme Court of Korea, November 11, 2021, 2021Da251929<\/span><\/p><\/blockquote>\n<p>The appellate court had treated the application as a protective measure in case the objection argument was rejected; the Supreme Court treated it as <strong>conduct premised on succession<\/strong>. If the purchaser is not the landlord, there is no reason to register a leasehold against it.<\/p>\n<p>It should be added that the tenant demanded the deposit from <strong>both<\/strong> the former landlord and the purchaser. Even where the procedural form of a primary and alternative joinder of defendants is used, each individual step taken along the way may be assessed as conduct premised on succession.<\/p>\n<p>The Supreme Court reversed the whole of the judgment below and remanded the case to the Suwon District Court. The outcome after remand is not confirmed in publicly reported sources.<\/p>\n<p><\/p>\n<h2 id=\"sec-5\">5. When is an objection actually accepted?<\/h2>\n<p class=\"lead-text\">The lower court judgments in which objections have been accepted share common features. All involved a <strong>voluntary transfer by sale<\/strong>, in all of them <strong>the landlord had not informed the tenant of the transfer<\/strong>, and in each the tenant objected <strong>within ten days<\/strong> of learning of it.<\/p>\n<table>\n<thead>\n<tr>\n<th>Judgment<\/th>\n<th>Learned of transfer \u2192 objected<\/th>\n<th>Outcome<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Suwon District Court Ansan Branch, July 12, 2023, 2023Gadan66286<\/td>\n<td>March 2, 2023, informed by a bank officer \u2192 <strong>suit filed March 7<\/strong> (5 days)<\/td>\n<td>Objection accepted, deposit KRW 124,000,000<\/td>\n<\/tr>\n<tr>\n<td>Seoul Eastern District Court, November 26, 2024, 2023Gadan178616<\/td>\n<td>June 25, 2023, told by a third party \u2192 <strong>certified letter July 4<\/strong> (9 days)<\/td>\n<td>Objection accepted, deposit KRW 130,000,000<\/td>\n<\/tr>\n<tr>\n<td>Seoul Northern District Court, August 28, 2024, 2023Gadan154043<br \/>(upheld on appeal, Seoul Northern District Court, June 5, 2025, 2024Na39432)<\/td>\n<td>Landlord never informed the tenant \u2192 <strong>objection by service of the complaint<\/strong><\/td>\n<td>Objection accepted, deposit KRW 150,000,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>The Seoul Eastern District Court read the doctrine broadly. The defendant argued that an objection is available only where the property is transferred after the lease has already terminated, and not where ownership changes while the lease is running. The court rejected that.<\/p>\n<blockquote><p>In light of the purpose of the Housing Lease Protection Act to protect tenants and of the fact that a lease contract is a <strong>continuing contractual relationship<\/strong> founded on mutual trust between lessor and tenant, the rule in Supreme Court 2021Da251929 cannot be construed so restrictively.<br \/><span class=\"cite\">\u2014 Seoul Eastern District Court, November 26, 2024, 2023Gadan178616<\/span><\/p><\/blockquote>\n<p>A recent judgment refusing an objection points the same way from the opposite direction. Where the tenant made no declaration of objection despite knowing of the transfer and filed suit only about two years and four months after the transferee acquired the property, the appellate court set aside the first instance judgment and denied the former landlord&#8217;s liability (Seoul Western District Court, September 27, 2024, 2024Na40056).<\/p>\n<p>In short, whether an objection is accepted depends less on <strong>elapsed time<\/strong> than on the <strong>consistency of the tenant&#8217;s conduct<\/strong>. A landlord&#8217;s failure to give notice pushes back the starting point of the reasonable period, but a single act treating the new owner as landlord may be enough to defeat the objection.<\/p>\n<p><\/p>\n<h2 id=\"sec-6\">6. Should the tenant file a demand for distribution?<\/h2>\n<p class=\"lead-text\">A tenant intending to claim against the former landlord <strong>should file one<\/strong>. Filing it, however, is not itself an objection. The two must not be conflated.<\/p>\n<blockquote><p>Where a leased house is sold at auction, a tenant holding opposing power who files a demand for distribution with the auction court although the lease term has not ended is <strong>clearly expressing that the tenant no longer wants the lease relationship to continue<\/strong>, and absent special circumstances this may be treated as a declaration of termination of the lease (\u2026)<br \/><span class=\"cite\">\u2014 Supreme Court of Korea, July 12, 1996, 94Da37646<\/span><\/p><\/blockquote>\n<p>Filing a demand for distribution nevertheless does not eliminate succession. As to the balance not recovered through distribution, the tenant may still assert its rights against the purchaser, who succeeds to the position of a landlord under a terminated lease.<\/p>\n<blockquote><p>(\u2026) as to <strong>the balance remaining after deducting the amount the tenant could have received in the auction proceeding, the tenant may assert against the purchaser the continuation of the lease relationship until that balance is refunded<\/strong> (\u2026)<br \/><span class=\"cite\">\u2014 Supreme Court of Korea, August 22, 1997, 96Da53628<\/span><\/p><\/blockquote>\n<p>Reading these two judgments together with 2021Da251929 produces the following:<\/p>\n<ul>\n<li><strong>If no demand for distribution is filed<\/strong>, the tenant is assessed as intending to assert the lease against the purchaser, which is held to contradict a claim against the former landlord.<\/li>\n<li><strong>If a demand is filed<\/strong>, that contradiction disappears, but because the demand alone does not exclude succession, the objection must be made <strong>separately and expressly<\/strong>.<\/li>\n<\/ul>\n<p>A demand for distribution is a <strong>precondition<\/strong> of an effective objection, not the objection itself.<\/p>\n<p><\/p>\n<h2 id=\"sec-7\">7. If the objection succeeds, must the tenant move out?<\/h2>\n<p class=\"lead-text\">Yes. An objection carries the price of <strong>losing the right to possess<\/strong>, so raising one without confirming this point can leave the tenant worse off.<\/p>\n<p>The effect of an objection is, in the words of the case law, to be freed from &#8220;the constraint of the succeeded lease relationship&#8221; (Supreme Court of Korea, September 4, 2002, 2001Da64615). Because the lease relationship is not succeeded by the purchaser, the tenant can no longer assert the leasehold against the purchaser, who may then obtain a delivery order or bring an eviction action.<\/p>\n<p>If the tenant does not object, by contrast, it may assert the continuation of the lease against the purchaser until the undistributed balance is refunded, even having filed a demand for distribution (Supreme Court of Korea, August 22, 1997, 96Da53628). In practical terms the tenant may remain in the home and refuse delivery.<\/p>\n<p>The test is therefore a comparison between <strong>the solvency of the purchaser and that of the former landlord<\/strong>. The purchaser holds the property itself as an asset against which the tenant may refuse delivery, whereas the former landlord is a debtor who has already been through a foreclosure.<\/p>\n<p>Applying the figures from the case: the purchaser paid <strong>KRW 31,190,000<\/strong> and assumed a burden of <strong>KRW 180,000,000<\/strong>. If the tenant&#8217;s objection were accepted, that burden would disappear and the purchaser would hold unencumbered ownership for KRW 31,190,000, while the tenant would be left with a claim against a former landlord who is already insolvent.<\/p>\n<p>Where a third party has purchased at auction, exercising the objection right is worthwhile mainly in exceptional situations: where the purchaser is insolvent, or where the assumed balance cannot in practice be recovered from the purchaser.<\/p>\n<p><\/p>\n<h2 id=\"sec-8\">8. Is there a route other than an objection?<\/h2>\n<p class=\"lead-text\">There is. In 2023 the Supreme Court confirmed a different route: <strong>if the tenant does not hold opposing power, succession does not occur at all.<\/strong><\/p>\n<blockquote><p>Succession by the transferee of a leased house to the lessor&#8217;s status under Article 3(4) of the Housing Lease Protection Act <strong>requires that the tenant hold opposing power<\/strong>, and therefore, in the case of a tenant who does not hold opposing power, <strong>the lessor bears the obligation to refund the deposit as a rule<\/strong> even if the leased house has been transferred to another person.<br \/><span class=\"cite\">\u2014 Supreme Court of Korea, June 29, 2023, 2020Da276914<\/span><\/p><\/blockquote>\n<p>The tenant in that case leased the home for a deposit of KRW 185,000,000 and <strong>also registered a chonsegwon<\/strong>, a registered real right over the property, at the same time. When the deposit was not returned, the tenant enforced the chonsegwon and applied for an auction. After the site inspection in the auction proceeding, the tenant registered a move to another address, losing opposing power, and a third party subsequently purchased the property. The tenant received roughly KRW 95.54 million in distribution as a chonsegwon holder and claimed the remainder from the former landlord.<\/p>\n<p>The court below dismissed the claim as contrary to good faith. The Supreme Court reversed.<\/p>\n<blockquote><p>That the plaintiff moved out after the site inspection in this auction proceeding, thereby losing opposing power, and claimed the remaining lease deposit from the defendant <strong>cannot be regarded as conduct contrary to the principle of good faith.<\/strong><br \/><span class=\"cite\">\u2014 Supreme Court of Korea, June 29, 2023, 2020Da276914<\/span><\/p><\/blockquote>\n<p>On remand the Daegu District Court dismissed the appeal and ordered the former landlord to pay the tenant <strong>KRW 80,089,622<\/strong> with delay damages (Daegu District Court, December 14, 2023, 2023Na313553). The tenant actually recovered.<\/p>\n<p>This route should not be copied without care. That tenant held a <strong>separately registered chonsegwon<\/strong> and could therefore receive distribution even after losing opposing power. A tenant who moves out without such protection forfeits both opposing power and the priority payment right and becomes an unsecured creditor. Whether a distribution position has been secured, by chonsegwon registration or a lease registration, and whether it survives the move, must be verified first.<\/p>\n<p><\/p>\n<h2 id=\"sec-9\">9. What should be done, and when?<\/h2>\n<p class=\"lead-text\">Placing the judgments in chronological order produces the following. A tenant who intends to claim against the former landlord must decide the approach <strong>before the deadline for demands for distribution.<\/strong><\/p>\n<table>\n<thead>\n<tr>\n<th>Timing<\/th>\n<th>Action<\/th>\n<th>Authority<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Immediately after the auction commences<\/td>\n<td>Decide whether to retain opposing power or to take distribution and leave<\/td>\n<td>Supreme Court 96Da53628<\/td>\n<\/tr>\n<tr>\n<td>By the deadline for demands for distribution<\/td>\n<td>If claiming against the former landlord, <strong>file the demand for distribution<\/strong><\/td>\n<td>Supreme Court 94Da37646; 2021Da251929<\/td>\n<\/tr>\n<tr>\n<td>On learning of the sale approval or payment of the price<\/td>\n<td>Send a <strong>certified letter to both the purchaser and the former landlord<\/strong> stating the objection to succession and that succession is not wanted<\/td>\n<td>Supreme Court 2001Da64615; 2021Da251929<\/td>\n<\/tr>\n<tr>\n<td>Thereafter<\/td>\n<td>Take no step that treats the purchaser as landlord<\/td>\n<td>Supreme Court 2021Da251929<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>What <strong>not<\/strong> to do is set out in the judgment itself.<\/p>\n<ul>\n<li>Giving notice of termination before the sale and treating it as the objection<\/li>\n<li>Claiming against the former landlord without having filed a demand for distribution<\/li>\n<li>Applying for a housing lease registration order naming the purchaser as respondent<\/li>\n<li>Demanding the deposit from the purchaser and from the former landlord at the same time<\/li>\n<\/ul>\n<p>Finally, whether to object at all is itself a decision. It must be made together with the loss of the right to possess (section 7) and an assessment of which party, purchaser or former landlord, offers the better prospect of recovery. Whether an objection was made is judged afterwards on the tenant&#8217;s conduct as a whole, so steps taken out of order are difficult to correct later.<\/p>\n<p><\/p>\n<h2 id=\"sec-10\">10. What this means for foreign residents and investors in South Korea<\/h2>\n<p class=\"lead-text\">Foreign nationals living in South Korea usually rent under the same statute as Korean tenants, and the sums at stake are large because Korean residential leases are deposit-based. Two points deserve particular attention.<\/p>\n<p><strong>Opposing power depends on an administrative filing.<\/strong> A tenant acquires opposing power from the day after taking possession and completing a resident registration, and for foreign nationals the corresponding filing is the alien registration or the report of place of residence. If that filing is not made, or is made at a slightly different address than the register shows, opposing power may not arise at all, and the analysis in this article does not apply. This should be verified before the deposit is paid, not afterwards.<\/p>\n<p><strong>Deadlines run from events in a Korean-language court file.<\/strong> The reasonable period for an objection runs from when the tenant learns of the transfer, and demands for distribution must be filed by a deadline set in the auction proceeding. Neither deadline is extended because notices are in Korean. A tenant who receives any auction-related document should have it reviewed immediately rather than waiting for a translated summary.<\/p>\n<p>Atlas Legal is based in the Songdo International Business District within the Incheon Free Economic Zone (IFEZ) and advises residents and investors across Songdo, Cheongna and Yeongjong International City, as well as Seoul and the wider metropolitan area, on residential lease disputes, deposit recovery and foreclosure auction procedure in South Korea.<\/p>\n<p><\/p>\n<h2 id=\"sec-11\">11. Frequently asked questions<\/h2>\n<div class=\"faq-item\">\n<p class=\"faq-q\">Q. My leased home in South Korea was sold at a foreclosure auction. Do I claim the deposit from the purchaser or the former landlord?<\/p>\n<p>From the purchaser, as a rule. Article 3(4) of the Housing Lease Protection Act provides that the transferee of a leased house is deemed to have succeeded to the landlord&#8217;s position, and the Supreme Court treats this as succession by operation of law, so the transferee assumes the deposit refund obligation with discharging effect and the transferor leaves the lease relationship and is released from the obligation (Supreme Court of Korea, November 11, 2021, 2021Da251929). If, however, the tenant objects within a reasonable period from learning of the transfer, the former landlord&#8217;s obligation does not extinguish (Supreme Court of Korea, September 4, 2002, 2001Da64615).<\/p>\n<\/p><\/div>\n<div class=\"faq-item\">\n<p class=\"faq-q\">Q. Does the objection doctrine apply when the buyer acquired the property at auction rather than by sale?<\/p>\n<p>The Supreme Court proceeds on that premise. In a case where a third party acquired the property in a compulsory auction, the Court did not say the doctrine was inapplicable to auctions. It set out the 2001Da64615 rule and then examined only whether its requirements were met (Supreme Court of Korea, November 11, 2021, 2021Da251929). The first instance court stated expressly that the same doctrine applies where the landlord&#8217;s position is succeeded through an auction (Suwon District Court Seongnam Branch, October 16, 2020, 2020Gadan203656). The objection was nevertheless rejected in that case.<\/p>\n<\/p><\/div>\n<div class=\"faq-item\">\n<p class=\"faq-q\">Q. If I notify the landlord of termination before the auction sale, does that count as an objection?<\/p>\n<p>It does not. The Supreme Court held that even after a lease terminates, Article 4(2) of the Housing Lease Protection Act deems the lease relationship to continue until the deposit is returned, and that a notice of termination given while no sale had yet taken place in the auction proceeding does not by itself show that the tenant did not want succession (Supreme Court of Korea, November 11, 2021, 2021Da251929). An objection to succession must be made separately, after succession occurs, that is, after the tenant learns that the purchase price has been paid.<\/p>\n<\/p><\/div>\n<div class=\"faq-item\">\n<p class=\"faq-q\">Q. Should I file a demand for distribution in the auction, or not?<\/p>\n<p>File it, if you intend to claim against the former landlord. The Supreme Court held that where a tenant with opposing power files a demand for distribution although the lease term has not ended, this clearly expresses that the tenant no longer wants the lease to continue and may be treated as notice of termination (Supreme Court of Korea, July 12, 1996, 94Da37646). Conversely, not filing one can only be regarded as an intention to assert the continuation of the lease against the highest bidder (Supreme Court of Korea, November 11, 2021, 2021Da251929). A demand for distribution is not itself an objection, however, because the tenant may still assert the undistributed balance against the purchaser, who succeeds to the landlord&#8217;s position (Supreme Court of Korea, August 22, 1997, 96Da53628).<\/p>\n<\/p><\/div>\n<div class=\"faq-item\">\n<p class=\"faq-q\">Q. Why does applying for a lease registration order against the purchaser hurt my case?<\/p>\n<p>Because it reads as an acknowledgement of succession. The Supreme Court listed, among the grounds for rejecting the objection, that the tenant applied for a housing lease registration order on the premise that the auction purchaser owed the deposit refund obligation (Supreme Court of Korea, November 11, 2021, 2021Da251929). Demanding the deposit from the former landlord while simultaneously demanding it from the purchaser may itself be assessed as contradictory conduct.<\/p>\n<\/p><\/div>\n<div class=\"faq-item\">\n<p class=\"faq-q\">Q. If my objection succeeds, can I stay in the home?<\/p>\n<p>No. The effect of an objection is to be freed from the constraint of the succeeded lease relationship (Supreme Court of Korea, September 4, 2002, 2001Da64615), so the tenant can no longer assert the leasehold against the purchaser and must deliver possession. If the tenant does not object, by contrast, the tenant may assert the continuation of the lease against the purchaser until the undistributed balance is returned, even after filing a demand for distribution (Supreme Court of Korea, August 22, 1997, 96Da53628). The decision therefore turns on comparing the solvency of the purchaser with that of the former landlord.<\/p>\n<\/p><\/div>\n<div class=\"faq-item\">\n<p class=\"faq-q\">Q. Is there any route other than an objection to reach the former landlord?<\/p>\n<p>Losing opposing power prevents succession from arising at all. The Supreme Court held that succession under Article 3(4) requires the tenant to hold opposing power, so that where the tenant does not hold it the landlord remains liable for the deposit even after the property is transferred, and that moving out after the auction site inspection and then claiming the remaining deposit from the former landlord is not contrary to the principle of good faith (Supreme Court of Korea, June 29, 2023, 2020Da276914). That tenant, however, had separately registered a chonsegwon, a registered real right over the property, and received distribution as a chonsegwon holder. Moving out without such protection forfeits both opposing power and priority payment rights.<\/p>\n<\/p><\/div>\n<p class=\"closing\">This article summarises general principles based on published judgments of the Supreme Court of Korea, published lower court judgments, and the statutes in force. The lower court judgments cited are published sources whose finality cannot be confirmed, and the outcome of the remand in Supreme Court 2021Da251929 is likewise not confirmed in publicly reported sources. The result in any individual case may differ according to when opposing power was acquired, whether and when a demand for distribution was filed, the content and time of receipt of any declaration of objection, and the solvency of the purchaser and of the former landlord.<\/p>\n<div class=\"author-box\">\n    <img decoding=\"async\" class=\"author-avatar\" src=\"https:\/\/atlaw.kr\/wp-content\/uploads\/2022\/12\/\ubc15\uc18c\uc601-1.png\" alt=\"Soyoung Park, Representative Attorney \u2014 Atlas Legal\"><\/p>\n<div class=\"author-text\">\n<div class=\"author-section-label\">About the Author<\/div>\n<div class=\"author-name\">Soyoung Park | Representative Attorney<\/div>\n<div class=\"author-detail\">Family Law, Inheritance, Construction &amp; Real Estate Disputes<\/div>\n<div class=\"author-detail\">Judicial Research and Training Institute, 33rd Class<\/div>\n<div class=\"author-detail\">Korea University, Department of Law<\/div>\n<div class=\"author-detail\">Atlas Legal | Incheon Songdo, South Korea<\/div>\n<p>      <a class=\"author-link\" href=\"https:\/\/atlaw.kr\" target=\"_blank\" rel=\"noopener noreferrer\">Visit Atlas Legal Homepage \u2192<\/a>\n    <\/div>\n<\/p><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>In South Korea an auction purchaser succeeds to the landlord&#8217;s position by operation of law and the former landlord is discharged. A tenant may object within a reasonable period, but the Supreme Court rejected the objection on three grounds.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[17],"tags":[927,618,926,925,255],"class_list":["post-1942","post","type-post","status-publish","format-standard","hentry","category-civil","tag-foreclosure-auction","tag-housing-lease-protection-act","tag-landlord-succession","tag-lease-deposit","tag-south-korea"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Landlord Succession After a Foreclosure Sale in South Korea | Atlas Legal<\/title>\n<meta name=\"description\" content=\"In South Korea an auction purchaser succeeds to the landlord&#039;s position by operation of law and the former landlord is discharged. 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