Lease Renewal in Korea: 5% Is a Cap, Not a Default — and 9 Reasons a Landlord Can Refuse
When a landlord says "5% is the law" during a lease renewal, that's only half true. The 5% figure is the ceiling a landlord cannot exceed when a tenant exercises their renewal right — it is not a default increase the tenant has to accept. And knowing that ceiling doesn't guarantee a renewal either: the Housing Lease Protection Act gives landlords a specific, limited list of grounds to refuse renewal, and the one that causes the most disputes is a landlord claiming they plan to move in themselves.
What the 5% cap is actually measured against
When a tenant exercises the renewal right, the landlord can raise the deposit and monthly rent combined (converted into a single reference figure) by no more than 5% compared to the previous contract. Two things get confused here. First, 5% is a ceiling, not a floor the tenant must accept — negotiating down to 3% or 0% is entirely possible. Second, if a local government has set a lower cap by ordinance, that lower cap applies instead. If you don't check your local ordinance before renewing, you could end up paying more than the actual legal maximum.
Even a mutual agreement above 5% is void
Even if a tenant and landlord both sign off on an increase above 5%, that excess is legally void. A landlord pressuring a tenant with "agree to this or I'll make things difficult" is not itself a valid ground for refusing renewal, so the tenant can still insist on renewing within the cap. If the invalid excess has already been paid, getting it back requires a separate process — which is exactly why it's simpler to catch an above-cap clause before it ever goes into the contract.
The window for exercising the renewal right
Tenants must request renewal sometime between six months and two months before the lease ends. That "two months" cutoff only applies to leases newly signed or renewed on or after December 10, 2020 (before that, the cutoff was one month). If your lease has been renewed multiple times, check which cutoff applies based on your most recent renewal date, not the original signing date. Miss the window and you can lose the renewal right entirely, so it's worth marking your calendar starting six months out.
When a landlord can legally refuse
The law bars landlords from refusing renewal without cause, but it carves out specific exceptions. A landlord can refuse if the tenant has fallen behind on rent by the equivalent of two months' worth, obtained the lease through fraud or misrepresentation, sublet the unit without the landlord's consent, or caused damage to the property through intent or gross negligence. Refusal is also allowed if the building has been destroyed and the lease's purpose can no longer be fulfilled, or if a redevelopment is scheduled. These grounds are an exhaustive list — a landlord cannot refuse renewal for a reason not on it.
The most common dispute — moving in themselves
The refusal ground that generates the most conflict is when a landlord, or their parent or child, intends to actually live in the unit. A tenant refused on this ground has no choice but to move out, but the recurring problem is landlords who claim this intent and then either don't move in or immediately re-list the unit to a new tenant. If that turns out to be false, it becomes grounds for the former tenant to seek damages. If you're refused renewal on this basis, it's worth checking after you move out whether the landlord actually moved in — that's the evidence you'd need later if a dispute arises.
If you choose to move instead of renewing
Sometimes the refusal ground is legitimate, or you simply don't want to stay even within the 5% cap. Either way, moving out means separately handling the long-term repair reserve fund settlement and maintenance fee reconciliation so you don't leave money on the table. The long-term repair reserve in particular is rarely flagged by landlords on their own — tenants usually have to request the settlement statement from the building management office directly.
What to check after a successful renewal
If your renewal goes through with a higher deposit, re-confirm your move-in registration and fixed date to make sure your priority claim on the deposit stays intact. You'll also want to recalculate your lease deposit guarantee insurance limit to match the higher deposit amount. And if things go the other way and the landlord fails to return the deposit on time, it helps to already know the process for filing a lease registration order before you actually need it.
The order to follow
First, start organizing your renewal intentions six months before the lease ends, and notify the landlord no later than two months before. Second, when given a rate, check whether it exceeds the 5% cap on the converted deposit figure, and whether your local ordinance sets a lower cap. Third, if the landlord refuses, ask exactly which of the legally listed grounds applies. Fourth, if you're refused on the grounds of the landlord moving in, check after you move out whether they actually did.
This article summarizes general legal information and is not a substitute for legal advice on a specific case. For an actual dispute, consult the Korea Legal Aid Corporation or an attorney.
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