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Blogs CivilCommercial Lease and Change of Use in Korea: Can the Lease Be Terminated If Business Operations Are Not Permitted?
A tenant may sign a commercial lease intending to operate a restaurant, café, convenience store, academy, or other specific business, only to later discover that the premises cannot legally be used for that purpose. This may occur because the building’s registered use does not permit the intended business, the required change of use cannot be approved, or separate business licensing requirements cannot be satisfied. In such cases, the landlord is not automatically liable simply because the change of use is unsuccessful. Whether the tenant may terminate the lease, recover the security deposit, or claim damages depends on factors such as the agreed purpose of the lease, the reason the intended business cannot operate, any contractual allocation of responsibility for permits and change-of-use procedures, and the representations made by the landlord before the lease was signed. Contents When a Change of Use Is Required What to Check Before Signing a Commercial Lease Landlord Liability When a Change of Use Is Not Possible Lease Termination and Return of the Security Deposit Damages for Interior and Business Preparation Costs Recommended Commercial Lease Clauses Frequently Asked Questions Key Takeaways on Commercial Leases and Change of Use 1. When Is a Change of Use Required for Commercial Premises? If the current registered use of a building differs from the tenant’s intended use, it is necessary to determine whether a change-of-use procedure is required under the Korean Building Act. Article 19 of the Building Act requires a building whose use is changed to comply with the building standards applicable to the intended new use. Depending on the type of change, approval, reporting, or an application to amend the building register may be required. [Article 19 of the Building Act – Change of Use] However, a change of use under the Building Act and a business-specific license or registration are separate legal issues. Even if the registered building use can be changed, the premises may still fail to satisfy requirements applicable to a restaurant, academy, or other regulated business. A prospective tenant should therefore confirm not only the current use shown on the building register but also whether the intended business can legally operate at the premises. 2. What Should Be Checked Before Signing a Commercial Lease? Before signing a commercial lease, the tenant should verify the registered use of the premises, whether the intended business can operate there, and who will bear responsibility for any change of use or licensing process. 🔹Key Checks Before Signing a Commercial Lease Item What to Check Building Register Current registered use of the premises Intended Business The specific business to be operated Change of Use Whether the required change can legally be made Building Standards Parking, fire safety, structural, and other requirements Business Licenses Whether permits, registrations, or reports required for the business are available Lease Agreement Who is responsible for permits, change of use, and related costs Special Clauses What happens if the tenant cannot obtain the required approval or operate the intended business Where a tenant is leasing premises for a specific business, it is generally preferable to state that purpose expressly rather than describing the premises only as a “commercial unit” or “store.” The purpose stated in the agreement may become an important factor if a dispute later arises over whether the premises were suitable for the intended use. 3. Is the Landlord Liable If the Change of Use Is Not Possible? If the premises cannot be used for the purpose agreed under the lease, the landlord’s contractual obligation to enable the tenant to use and benefit from the premises may become an issue. Article 623 of the Korean Civil Act requires a landlord to deliver the leased property and maintain it in a condition necessary for the tenant’s use and enjoyment during the lease term. [Article 623 of the Civil Act – Obligations of the Lessor] In Supreme Court Decision 2021Da202309, dated April 29, 2021, the lease expressly stated that the premises would be used as a convenience store, but issues relating to the building’s registered use interfered with normal business operations. The Supreme Court held that the condition in which leased premises must be provided should be determined in light of the agreed purpose and terms of the lease, and that the landlord’s obligation to maintain the premises in a usable condition does not automatically disappear merely because the landlord was unaware of the relevant defect. [Supreme Court Decision 2021Da202309, April 29, 2021] However, the landlord is not automatically liable whenever a change of use is denied. Relevant factors may include: the business purpose stated in the lease; whether the landlord knew the tenant’s intended business; whether the landlord represented that the business could operate at the premises; whether the problem arises from the building itself; and whether responsibility for permits or change-of-use procedures was allocated to a particular party. The central issue is whether the premises were leased for a specifically agreed business purpose and why that purpose became impossible to achieve. 4. Can the Lease Be Terminated If the Change of Use Is Not Permitted? If the inability to change the building use prevents the tenant from carrying out the business contemplated by the lease, termination of the lease may be considered. Where the tenant has already taken possession and used the premises, however, Korean law may treat the issue as termination with prospective effect rather than cancellation that retroactively unwinds the entire contractual relationship. In Supreme Court Decision 93Da61321, dated November 22, 1994, the tenant had taken possession of the premises but could not achieve the purpose of the lease because a legal restriction prevented the necessary change of use. The Supreme Court considered the continuing nature of the lease relationship and addressed the matter as one of termination rather than retroactive cancellation. [Supreme Court Decision 93Da61321, November 22, 1994] If the lease is validly terminated, the tenant may also seek the return of the lease security deposit upon returning the premises. Disputes may nevertheless arise over unpaid rent, restoration costs, or other amounts the landlord claims should be deducted from the deposit. 5. Can the Tenant Claim Interior and Business Preparation Costs as Damages? Where the landlord has breached a contractual obligation and the required elements for liability are satisfied, the tenant may consider claiming damages for losses such as interior construction costs. Article 390 of the Civil Act provides for damages where a party fails to perform its contractual obligations in accordance with the terms of the contract. [Article 390 of the Civil Act – Damages for Non-performance] Potential losses in a commercial lease dispute may include: interior construction costs; fixtures and equipment; demolition and restoration expenses; and expenses actually incurred in preparing permits or business registrations. However, not every expense incurred by the tenant will automatically be recoverable. The tenant must generally establish the connection between the landlord’s breach and the claimed loss, as well as the amount actually incurred. Construction agreements, tax invoices, bank transfer records, receipts, and similar documentation may therefore become important evidence. Claims for anticipated profits or lost business revenue generally require additional proof and should be considered separately from actual out-of-pocket expenses. 6. What Clauses Should Be Included in a Commercial Lease? Where the premises are being leased for a specific business, the lease should clearly address what happens if the required change of use or business license cannot be obtained. Relevant provisions may address: the specific business to be operated; whether a change of use is required; which party will handle the change-of-use procedure; allocation of related costs; the landlord’s obligation to provide documents or cooperation; termination rights if approvals are not obtained within a specified period; return of the deposit or other payments; and treatment of interior construction and restoration obligations. In particular, a general provision stating that “all permits and licenses are the tenant’s responsibility” may not adequately distinguish between regulatory issues relating to the tenant’s individual business and legal restrictions arising from the building itself. Where the ability to operate the intended business remains uncertain, the parties may consider expressly addressing termination and payment-return arrangements if the necessary approvals cannot be obtained. 7. Frequently Asked Questions Q1. If the lease says the premises will be used as a restaurant, must restaurant operations necessarily be permitted? The stated business purpose is an important factor, but it does not by itself determine liability. It is also necessary to consider whether the landlord knew the intended use, why the business cannot legally operate, and how the lease allocated responsibility for regulatory approvals. Q2. Is the landlord free from liability if the landlord did not know that the change of use was impossible? Not necessarily. A landlord’s lack of knowledge does not automatically eliminate the obligation to maintain the leased premises in a condition suitable for the agreed use. Whether damages may also be claimed requires a separate review of the requirements for contractual liability. Q3. What happens if neither the landlord nor the tenant is responsible for the inability to operate the business? If the contractual purpose becomes impossible to achieve for reasons attributable to neither party, Korean rules on risk allocation in bilateral contracts may become relevant. The result will depend on why the business became impossible and on the specific terms of the lease. Q4. What should a tenant do if interior construction has already been completed but the business license cannot be obtained? Before incurring additional expenses, the tenant should determine the exact reason the license cannot be issued and whether the problem can be corrected. The tenant should also preserve the building register, lease agreement, licensing documents, interior construction agreements, invoices, receipts, and communications with the landlord before assessing termination, deposit recovery, or damages. 8. Commercial Lease and Change of Use: Key Takeaways In a Korean commercial lease dispute involving a change of use, the registered use of the building is only one part of the analysis. The business purpose agreed between the landlord and tenant is also critical. If the parties entered into the lease for a specific business but a problem inherent in the building prevents that business from operating, issues such as lease termination, return of the security deposit, and damages may arise. However, the landlord is not automatically liable simply because a change of use cannot be completed. The lease agreement, special provisions, building register, reason for the licensing failure, representations made before signing, and records of actual expenditure should be reviewed together.
2026-08-18 -
Blogs Civil
False Naver Blog Posts Targeting Your Business in Korea: How to Request Removal
When Online Defamation Affects Your Business in Korea In South Korea, Naver remains one of the most influential online platforms for search, blogs, and reputation management. For businesses operating in Korea, what appears on Naver can directly affect customer trust, business inquiries, and brand credibility. In recent years, some businesses have discovered Naver blog posts that mention their company or brand name together with words such as “scam,” “fraud,” or “victim warning.” These posts may appear professional and persuasive, even when the underlying facts are inaccurate, misleading, or unrelated to the business itself. For foreign-owned companies or international businesses operating in Korea, this type of reputational damage can be especially difficult to detect and respond to. The content may be written in Korean, indexed on Naver, and viewed as credible by local customers before the company becomes aware of it. Under the Act on Promotion of Information and Communications Network Utilization and Information Protection (the “Network Act”), a business whose reputation or other rights have been infringed online may request deletion of the content or temporary blocking of access to the content. Applicable Law ▪️Article 44-2 of the Network Act: Deletion Requests and Temporary Measures Article 44-2(1) of the Network Act provides that a person whose rights, including privacy or reputation, have been infringed through information distributed via an information and communications network may request the relevant service provider to delete the information or publish a rebuttal. Under Article 44-2(2), once such a request is received, the service provider must take necessary measures, such as deletion or temporary blocking, without delay and notify both the requester and the person who posted the content. Where it is difficult to determine whether a rights infringement has occurred, or where a dispute between the parties is expected, Article 44-2(4) allows the service provider to temporarily block access to the content. The duration of such temporary measures may not exceed 30 days. ▪️Criminal Liability for Online Defamation If an online post contains false statements of fact that damage another person’s or company’s reputation, Article 70(2) of the Network Act may apply. The statutory penalty is imprisonment for up to seven years, disqualification for up to ten years, or a fine of up to KRW 50 million. Even if the statements are true, Article 70(1) may still apply if the post was made with intent to defame. In that case, the statutory penalty is imprisonment for up to three years or a fine of up to KRW 30 million. Category Legal Basis Possible Penalty Defamation by false statements of fact Network Act, Article 70(2) Up to 7 years’ imprisonment or KRW 50 million fine Defamation by true statements of fact Network Act, Article 70(1) Up to 3 years’ imprisonment or KRW 30 million fine Civil damages Civil Act, Article 750 Compensation for financial and reputational harm Criminal liability depends on the specific content, context, and intent behind the post. However, a business may still pursue platform-level removal or temporary blocking even where the criminal threshold is not yet clear. Key Legal Issues ▪️Scope of Defamation Under Article 44-2 The standard for requesting deletion or temporary blocking under Article 44-2 is broader than the standard for criminal defamation under Article 70 of the Network Act or Article 307 of the Criminal Act. In practice, the key issue is whether the online post infringes the company’s rights, including its reputation. It is not always necessary to prove criminal intent at the initial platform reporting stage. For example, if a Naver blog post places a company’s brand name next to terms such as “scam” or “fraud,” while the actual content concerns an unrelated impersonator or third party, the overall impression created for ordinary readers may still be misleading. In some cases, this may support a removal or temporary blocking request. Evidence of reputational harm is also important. Businesses should preserve records showing the impact of the post, such as customer complaints, cancelled inquiries, KakaoTalk messages, emails, screenshots, call logs, and changes in online search results. ▪️What Happens If the Poster Files an Objection If the person who posted the content files an objection, the temporary blocking may remain in effect for 30 days from the date the objection is received. After that period, the post may be restored. In that situation, the affected business may consider filing a defamation mediation request with the Korea Communications Standards Commission’s Internet Harm Relief Center. If mediation is successful, the settlement may have an effect similar to a civil settlement agreement. The Limits of Platform Reporting Alone Filing a removal request through Naver’s Rights Protection Center is an important first step, but it may not fully resolve the problem. If the poster files an objection, the content may be restored. If similar posts are uploaded again under different accounts or URLs, each post must usually be addressed separately. Where harmful posts are being published repeatedly or systematically, platform reporting alone may not be enough. In such cases, a formal letter of demand issued in the name of a Korean law firm, together with potential criminal complaints or civil damages claims, may be more effective. How Decent Law Firm Can Assist Responding to false or misleading online content in Korea requires more than simply submitting a platform report. Businesses must consider the wording of the removal request, the legal basis for rights infringement, the preservation of evidence, and the possibility of further civil or criminal action. Decent Law Firm assists businesses with each stage of this process, including removal requests, formal letters of demand, Korea Communications Standards Commission proceedings, criminal complaints, and civil damages claims where appropriate. If you have identified Naver blog posts or other online content that may be harming your business in Korea, please share the relevant URLs and a brief explanation of the impact. We will review the matter and advise on the most appropriate course of action. ※ This content is provided for general informational purposes only and does not constitute legal advice in relation to any specific matter.
2026-05-28 Naver Blog -
Blogs Civil
Litigation for the Payment of Goods: Reclaiming What Your Business is Owed
Doing business in a foreign country comes with its own set of challenges, and one of the most frustrating is dealing with clients who refuse to pay for goods already delivered. If your business partner in Korea is constantly delaying payment, it may be time to move beyond simple reminders and consider Litigation for the Payment of Goods (물품대금소송). At Decent Law Firm, we help international entrepreneurs and entities navigate the Korean legal system to recover what they are owed before the statute of limitations expires. Litigation for Unpaid Goods: What You Need to Know A "Litigation for Payment of Goods" is a civil lawsuit filed when a buyer fails to pay for supplied goods by the agreed-upon deadline. To win, you must prove through documentation that a transaction occurred and that a valid debt exists. Key Evidence Required: Proof of Agreement: Contracts, Purchase Orders (PO), or approved Quotations. Proof of Delivery: Delivery slips, Invoices, Bills of Lading, or signed confirmation of receipt. Proof of Debt: Tax invoices, bank statements showing partial payments (or lack thereof), and records of payment demands (emails, texts, or KakaoTalk messages). Note for Expatriate Businesses: In Korea, long-term business relationships often operate on verbal agreements or customary practices rather than formal contracts. If you don't have a formal contract, don't lose hope. Tax invoices, transaction patterns, and messaging logs are powerful substitutes in a Korean court. The Ticking Clock: Statute of Limitations In Korea, commercial claims for the payment of goods are generally subject to a short-term statute of limitations of 3 years. If you take no legal action—such as sending a Content Certification (Certified Mail), filing a lawsuit, or applying for a Provisional Attachment—the time continues to run. Simply "waiting for a few more weeks" at the debtor's request could lead to your legal right to claim the money expiring entirely. Common Defenses Used by Debtors In the courtroom, debtors rarely just say, "I don't have the money." Instead, they often use calculated legal defenses to avoid payment: "The goods were defective, and we agreed on a return/discount." "The delivered quantity was different from the order." "The debt was already settled through a separate transaction (offsetting/set-off)." To counter these claims, you need a meticulous legal review. We reconstruct the entire transaction history—from the initial order to the payment delays—to logically prove your right to the full amount. Decent Law Firm’s Strategy for Actual Recovery A court judgment is just a piece of paper if the debtor has already emptied their bank accounts. Our Civil Litigation Team focuses on actual recovery, not just winning the case. Timeline Structuring: We organize the contract, order, delivery, and settlement flow into a clear, structural timeline. Evidence Optimization: We select the most "court-friendly" evidence to minimize the risk of a counter-defense. Asset Preservation: We check the necessity of Provisional Attachments (가압류) on the debtor’s bank accounts or property to ensure funds are available once we win. Strategic Negotiation: Often, the mere filing of a professionally drafted lawsuit by a reputable firm prompts the debtor to settle immediately. Don't Wait Until It's Too Late If you’ve heard "Please wait a little longer" one too many times, it’s time to protect your interests. Gather your contracts, invoices, and messaging logs, and reach out for a professional consultation. Your partner for legal success in Korea, Decent Law Firm Civil Litigation Team
2026-04-06 Naver Blog
