The premium (gwonrigeum, key money) a Korean commercial tenant collects when handing over a business is protected by law. Article 10-4 of the Commercial Building Lease Protection Act says the landlord must not obstruct the tenant collecting a premium from a new tenant the tenant introduces, from 6 months before the term ends until it ends, and lists four obstructive acts. A landlord who breaches this owes damages, capped at the lower of the premium the new tenant agreed to pay and the premium at lease end, and the claim must be made within 3 years of the end.
1. Protected period: 6 months before expiry until the end — the landlord must not obstruct.
2. Four obstructive acts — demanding or taking a premium, blocking payment, demanding markedly high rent, refusing to contract without just cause.
3. Damages capped at the lower of the two premiums; claim within 3 years.
What the landlord must not do — Art. 10-4(1)
| Item | Obstructive act (summary) | Worth noting (ours) |
|---|---|---|
| 1 | Demanding or taking a premium from the person the tenant introduced | The landlord intercepting the premium |
| 2 | Stopping that person paying the tenant the premium | — |
| 3 | Demanding markedly high rent and deposit compared with nearby premises | No figure for “markedly” in the article |
| 4 | Otherwise refusing to contract without just cause | Just cause is listed in para. 2 |
The proviso to para. 1 says this protection doesn’t apply where a ground in Art. 10(1) exists (arrears of three periods’ rent, unauthorised subletting and so on). The eight grounds are in commercial lease renewal for 10 years.
When refusing is justified — Art. 10-4(2)
| Type | What the source says | Worth noting (ours) |
|---|---|---|
| 1 | The person introduced can’t afford the deposit or rent | — |
| 2 | A risk they’ll breach a tenant’s duties, or another substantial reason the lease can’t be kept | — |
| 3 | The building hasn’t been used for profit for 1 year 6 months or more | The landlord leaves it empty |
| 4 | A new tenant chosen by the landlord signed a premium contract with the tenant and paid it | The tenant got the premium |
Damages and deadlines — paras. 3–5
| Type | What the source says | Worth noting (ours) |
|---|---|---|
| Damages (3) | A landlord who breaches para. 1 and causes loss must compensate | — |
| Cap (3) | No more than the lower of the premium the new tenant agreed to pay and the premium at lease end | Our example below |
| Limitation (4) | Lapses if not exercised within 3 years of the lease ending | — |
| Information (5) | The tenant must tell the landlord what they know about the new tenant’s ability to pay and willingness to perform | — |
Working out the cap — our example
If the new tenant agreed to pay a premium of 50 million won but the premium at lease end is valued at 40 million won, the cap is the lower, 40 million won. If the end value were higher, the cap would be the agreed amount. The figures are our example; actual damages depend on the loss proven (the cap is a ceiling, not a payout).
Above the threshold too — Art. 2(3)
Article 2(3) applies Arts. 10-2 to 10-9 even to leases above the Decree’s converted-deposit threshold, so premium protection (Art. 10-4) covers them. Regional thresholds are in commercial rent 5% increase calculator.
Checklist
- ☐ Start introducing a new tenant from 6 months before expiry
- ☐ Keep the premium contract and proof you introduced them (our tip)
- ☐ Give the landlord what you know about their ability to pay
- ☐ No refusal ground such as three periods’ arrears
- ☐ If obstructed, claim within 3 years of the end
Questions that remain
Is the premium protected after the 10-year renewal limit?
Para. 1’s period is “6 months before the end until the end”, with nothing about the 10-year limit. We didn’t check case law, so get legal advice in a dispute.
How high is “markedly high”?
The article only says to compare with nearby rents and deposits; it sets no number.
Sources
- Korean law database (law.go.kr) — Commercial Building Lease Protection Act Art. 10-4 — source (current text, effective 12 May 2026, Act No. 21083; checked 19 October 2026). Protected period, obstructive acts 1–4, the Art. 10(1) proviso, just cause 1–4 (1 year 6 months), the damages cap, 3-year limitation, the information duty, Art. 2(3).
- Not read. Art. 10-3 (definition) and Arts. 10-5 to 10-9 in detail; case law; the government standard premium contract.
- What we added. The “worth noting” column and the Korean everyday gloss.
Where to check further
- Korea Legal Aid Corporation or a lawyer — obstruction and damages disputes.
- A certified appraiser — the premium at lease end.
Written on 19 October 2026. The content is from the source; the glosses are ours.
