Commercial Lease in Korea: A Seoul Restaurant Owner's Checklist

A commercial lease in Korea comes with specific legal protections for restaurant tenants. Under the Commercial Building Lease Protection Act, you can ask to renew your lease for up to 10 years in total, and your landlord cannot block you from collecting key money from the next tenant without a legal reason. Both rights have deadlines, and what the landlord tells you at signing, such as a rebuilding plan, can limit them later.

I run two restaurants in Gangnam, Seoul. One of them is Deungchon Shabu Kalguksu (Eonju branch), a Korean shabu-shabu place near Yeoksam Station. This post is the checklist I would hand to a friend from abroad, or a Korean coming home from overseas, who wants to rent a restaurant space in Seoul. It is general information from an owner, not legal advice, so have a Korean lawyer check your own contract before you sign.

The checklist before you sign

Print this and take it to the viewing.

1. Mark 6 months and 1 month before expiry
2. Get any rebuilding plan in writing
3. Check exhaust, gas and electrical capacity
4. Define "original condition" and take photos
5. Ask for management fee items, not a total
6. Sign key money as a separate contract
7. Register the business, set rent auto-transfer

How does the 10-year renewal right work?

The right only works if you request renewal in time. Article 10 of the Act says the landlord cannot refuse without a justifiable reason if the tenant requests renewal between 6 months and 1 month before the lease ends.

The 10 years count from your first lease, not from each renewal. If your first contract runs 2 years, you can renew within the remaining 8. The 10-year cap came in with an amendment dated October 16, 2018. Before that it was 5 years, so anyone holding an older lease should have a lawyer check which rule applies.

For leases within the Seoul threshold explained below, there is one more rule. If the landlord says nothing during that window, and you have not told the landlord you are leaving, the lease is treated as renewed on the same terms for 1 year. The tenant can then give notice to end it at any time, and it ends 3 months after the landlord receives the notice.

I would not rely on memory for any of these dates. Put them in a calendar with alerts, and make the request in a form that leaves a date on record, such as a certified letter.

When a landlord can say no

The Act lists eight reasons a landlord may refuse renewal. Here are three of them:

• Rent arrears. If unpaid rent has reached three periods' worth at any point, the landlord can refuse renewal. Article 10-9 sets aside arrears from one six-month window that began with a 2020 amendment. Separately, under Article 10-8, the landlord can end the lease while the unpaid amount stands at three periods' rent.
• Subletting without consent. Renting part of your space to a pop-up or a second brand without the landlord's agreement is a refusal reason.
• Demolition or rebuilding. This counts if the landlord gave you a concrete plan with timing at signing and follows it, if the building is unsafe, or if another law requires it.

Key money in Korea: what the law protects

Key money (gwonrigeum) is paid on top of the deposit and monthly rent. The Act defines it as payment for things like equipment, customer base, know-how and the business value of the location. In the common case, a new tenant pays it to the outgoing tenant.

When you take over an existing restaurant, the outgoing tenant will often ask for it. When you leave, you may ask your successor for it. The landlord is not part of that deal, but the landlord decides whether the new tenant gets a lease. Article 10-4 covers that step.

From 6 months before the lease ends until it ends, the landlord must not obstruct you from collecting key money from a new tenant you found. This protection falls away if one of the renewal refusal reasons above, such as rent arrears, applies to you. Obstruction includes demanding key money from that person, asking for rent or a deposit far above the market, or refusing to sign with them without a justifiable reason. If the landlord breaks this rule and you lose money, you can claim damages. Article 10-4(3) caps the damages at the lower of two amounts: the key money your successor agreed to pay, or the key money value at the end of the lease. The claim must be exercised within 3 years from the day the lease ends.

There are exceptions. The Act treats it as a justifiable reason if the tenant you propose cannot afford the deposit or rent. Under Article 10-5, this protection also does not cover spaces inside large stores or semi-large stores (traditional markets excepted), or buildings that are state or public property.

Before paying key money, I would ask one question: if no successor pays me back, can the restaurant still earn this amount over the lease?

Rent increases and the Seoul threshold

Rent rules depend on the size of your lease. The Enforcement Decree caps an increase request at 5 percent of the current rent or deposit. Article 11 has one exception: when rent was lowered because of the economic impact of a Class 1 infectious disease, the cap does not apply until rent returns to the earlier level. No increase can be requested within 1 year of signing or of the last agreed increase.

Whether the cap applies depends on a threshold. The full Act applies to leases at or below a set amount, which is 900 million won in Seoul. For this test, monthly rent is converted by multiplying it by 100 and adding the deposit. Above that line, Article 2 still applies key parts to your lease, including the renewal request rules in Article 10 and the key money protection in Articles 10-2 to 10-9. The 5 percent cap sits under Article 11, which is not on that list. A large space in a prime Gangnam location can cross the line, so run the numbers before you assume the cap protects you.

Item	What the law says
Renewal request window	6 months to 1 month before expiry
Total renewal period	Up to 10 years, including the first lease
Key money protection	From 6 months before the end until the lease ends
Damage claim deadline	3 years from the end of the lease
Rent increase cap	5 percent, for leases within the threshold
Seoul threshold	900 million won (deposit + monthly rent x 100)

Business registration, fees and the standard form

Business registration. Under Article 3, your lease takes effect against third parties, such as a new building owner, from the day after you have taken over the building and applied for business registration. You will need registration to operate anyway. Doing it early also protects the lease.

Management fees. A new Article 19-2 took effect on May 12, 2026. For leases within the threshold that are signed or renewed from that date, a tenant who pays management fees can ask the landlord for a breakdown, and the landlord must provide it. The Asia Business Daily reported that the breakdown covers 14 categories, such as cleaning and security.

Standard contract. Under Article 19, the Ministry of Justice, after consulting the land ministry, can set and recommend a standard commercial lease form that covers deposit, rent, lease period, repair cost sharing and management fee items. If your draft says nothing about who pays for repairs, raise it before signing.

For a restaurant, the exhaust line and the gas and power capacity are where verbal promises hurt most, because fixing them later means construction while you are already paying rent. If the landlord agrees to something there, I would want it in the contract.

FAQ

Can a foreigner sign a commercial lease in Korea?

The lease protections in this post come from the Act and do not depend on nationality. What you can legally run as a business depends on your visa status, which is a separate question. Check that with immigration or a professional before you sign.

Is a 1-year lease shorter than the law allows?

For leases within the threshold, Article 9 treats a lease with no fixed period, or one under 1 year, as a 1-year lease. The tenant may still choose to rely on the shorter period.

Is there an official English version of the Act?

Yes. The Korea Law Information Center has an English translation of the Act. The Korean text is the official one, so if the two seem to differ, go by the Korean text.

Sources

• Korea Law Information Center: Commercial Building Lease Protection Act (Korean, current text)
• Korea Law Information Center: Enforcement Decree of the Act (Korean, current text)
• Korea Law Information Center: English translation of the Act
• The Asia Business Daily: management fee breakdown disclosure (May 2026)

한국어 요약

서울에서 식당 자리를 구하는 외국인·해외 한인을 위해 상가 임대차 계약 전 체크리스트를 영어로 정리했어요.

계약갱신요구는 만료 6개월 전부터 1개월 전 사이, 최초 계약 포함 10년까지이고, 권리금 회수 방해 금지는 종료 6개월 전부터 종료 때까지예요.

차임 증액 5% 상한은 서울 환산보증금 9억 원 이하에만 해당하니, 큰 매장은 계산부터 해 보세요. 법률 자문이 아니니 실제 계약은 전문가에게 확인하세요.

한국어로 더 보려면 네이버 블로그 blog.naver.com/ruistan

About my restaurant

If you are in Seoul and want to see what a restaurant behind a lease like this looks like, come and eat at mine.

Deungchon Shabu Kalguksu, Eonju branch (등촌샤브칼국수 언주점)

Address: Yeoksam-dong 670-18, Gangnam-gu, Seoul, 2F (서울 강남구 역삼동 670-18 2층). Look for BEARS TACO on the 1st floor. We are one floor up.

Getting there: walking distance from Yeoksam Station (Line 2).

The meal: one pot, four courses. Beef shabu-shabu first, then vegetables, then noodles (sari), and fried rice cooked in the last of the broth.

Maps: Google Maps / Naver Map. Please check opening hours on the map before you come.

Phone: 070-4647-2467

First-timer guide: Deungchon Shabu Kalguksu near Yeoksam Station: Korean Shabu-Shabu Guide

More Seoul food & behind-the-scenes on Instagram @todoho