The Difference Between Contract Renewal and the Right to Request Renewal: Does the Right Resurface with a New Contract?

Key Conclusion

In residential lease agreements, re-signing the lease and exercising the right to request renewal must be legally distinguished. The mere fact that a tenant has rewritten the lease agreement does not automatically mean that the tenant has exercised the right to request renewal; conversely, even if a new lease agreement exists, it may be deemed a renewal if it is substantively an extension of the existing lease.

The two most important criteria for determination are as follows:

1. Did the tenant express an intention to exercise the statutory right to request renewal?
2. Can it be deemed that the existing lease has clearly terminated and a new lease has been established?

If a new lease agreement in the true sense has been concluded, the legal relationship regarding the existing contract terminates, and the issue of the right to demand contract renewal can be reassessed based on the new contract. However, in actual disputes, specific circumstances—such as the wording of the contract, the settlement of the security deposit, the lease term, the extent of changes in rent, and records of communications between the parties—are reviewed together.

Glossary

What Is the Right to Request Contract Renewal?

The right to request contract renewal is a right granted to tenants under the Housing Lease Protection Act. Tenants may request the renewal of a lease agreement from the landlord within a specified period, and the landlord cannot easily refuse this request unless there are grounds for refusal specified by law.

The key points to remember are as follows:

• A tenant may exercise the right to demand contract renewal once.
• The period for exercising this right is, in principle, from 6 months to 2 months before the lease term ends.
• The term of the renewed lease is generally considered to be 2 years.
• In principle, the terms after renewal are the same as those of the existing contract.
• However, increases in the security deposit or monthly rent are subject to the limits set by the Residential Lease Protection Act, which are generally within a 5% range.

An important point here is that exercising the right to request contract renewal is not so much “entering into a new contract” as it is legally extending the existing contractual relationship.

What Is a Renewal Contract?

A renewal contract refers to the landlord and tenant mutually agreeing to terminate the existing contract and enter into a new lease agreement. In practice, it is common to draw up a “renewal contract” upon the expiration of a global lease agreement, often involving a significant increase in the security deposit, a switch to monthly rent, or the establishment of new terms regarding the lease term and special provisions.

The characteristics of a renewal are as follows:

• It requires mutual agreement between the parties.
• It is not merely a simple extension of the existing contract; there must be circumstances that allow it to be considered a new contract.
• Key terms—such as the security deposit, monthly rent, contract term, and special provisions—may change significantly.
• Unlike the exercise of the statutory right to request renewal, the terms are not restricted to an unconditional 5% increase limit.

However, if the arrangement is merely labeled a “renewal” to circumvent the Lease Protection Act but is, in substance, a renewal of the existing contract, it may not be recognized as a renewal in the event of a dispute.

The Main Difference Between a Renewal Agreement and Exercising the Right to Request Contract Renewal

Does Rewriting the Contract Automatically Constitute a Renewal?

No. Simply drafting a new contract is not sufficient. In legal terms, the substance of the contract is more important than its name.

For example, in the following cases, the agreement is more likely to be viewed as a renewal of the existing lease rather than a new contract:

• The existing security deposit and monthly rent remained virtually unchanged.
• The leased property and the parties involved are the same.
• The term was simply extended upon the contract’s expiration.
• The tenant stated they would exercise their right to request renewal, and the landlord accepted this.
• The new contract contains a clause stating that the renewal is “based on the exercise of the right to request renewal.”

Conversely, the likelihood of it being considered a genuine renewal increases if the following circumstances exist:

• There is clear language stating that the existing contract is being terminated or ended by mutual agreement.
• Key terms—such as the security deposit, monthly rent, term, or special provisions—have been significantly altered.
• Settlement procedures, such as the return and re-payment of the security deposit, were actually carried out.
• The new lease agreement clearly states that it constitutes a new lease agreement separate from the existing one.
• The parties’ intent to enter into a new lease agreement is confirmed through text messages, emails, audio recordings, etc.

However, since the return and re-payment of the security deposit may be linked to other legal issues—such as the right of opposition, priority of repayment, and the date of registration—caution is advised before proceeding.

Does the Right to Request Contract Renewal Expire Upon Signing a New Lease?

It cannot be stated categorically that “it expires.” Whether the right to request contract renewal is exhausted depends not on the label “renewal contract”, but on whether the tenant exercised the right to request contract renewal and whether a new contract was substantively established.

1. When the tenant extends the lease by exercising the right to request contract renewal

If the tenant notified the landlord that they would “exercise the right to request contract renewal” and the contract was extended accordingly, it is generally considered that the right to request renewal has been used. In this case, even if a new lease agreement is drawn up, if that document merely confirms the renewal terms, it may be deemed that the right has been exercised once.

2. When the parties mutually agree to terminate the existing contract and enter into a new one

If the landlord and tenant clearly terminate the existing contract and enter into a new lease agreement under new terms, this is distinct from the exercise of the statutory right to request renewal. In this case, the tenant’s right to request renewal may be reassessed based on the new contract.

3. Cases where the form is a “renewal agreement” but the substance is an extension

Even if the title of the contract is “Renewal Agreement,” if the actual content is merely an extension of the existing contract, it may be viewed as a renewal. In particular, if the rent increase is within 5%, there is a record that the tenant exercised the right to request renewal, and there is no procedure to terminate the existing contract, it is likely to be assessed as a simple renewal.

Documents and Evidence to Verify in Practice

When it is unclear whether the agreement is a renewal or the exercise of the right to request renewal, the following materials are important.

To prevent disputes, it is advisable to clearly state in the contract whether it is a “renewal resulting from the exercise of the right to renew” or a “new lease agreement following the termination of the existing contract.”

Suggested Wording for the Contract

The wording below is provided for illustrative purposes only; actual contracts require consideration of individual circumstances and legal review.

To clearly state that the contract is a renewal resulting from the exercise of the right to request renewal

• “This agreement renews the existing lease agreement pursuant to the tenant’s exercise of the right to request renewal under the Residential Lease Protection Act.”
• “The lease term following renewal shall be two years, and the security deposit and rent shall be adjusted within the limits set by law.”

To clarify that this is a new lease agreement

• “The parties hereby terminate the previous lease agreement by mutual consent and enter into this agreement as a separate, new lease agreement.”
• “The parties confirm that this agreement is not a renewal agreement resulting from the tenant’s exercise of the right to request contract renewal.”

However, the mere inclusion of such wording does not always guarantee that it will be recognized as legally valid. In practice, all relevant circumstances—including the extent of the changes to the terms, the settlement of the security deposit, and the details of the parties’ negotiations—are taken into consideration.

Commonly Confusing Cases

Case 1: The jeonse deposit was increased by 5%, and the tenant agreed to stay for two more years

If the tenant exercised their right to request renewal and the increase in the jeonse deposit is within 5%, it is generally likely to be viewed as a renewal resulting from the exercise of that right. In this case, the right to request renewal may be deemed to have been exercised.

Case 2: The jeonse deposit increased significantly, and a new contract was signed

If there is a clear intention to terminate the existing contract and enter into a new one, and the deposit has changed significantly, there is room to view this as a new contract. In this case, it may be distinguished from the exercise of the right to renew.

Case 3: The contract is titled “Renewal Agreement,” but the content is nearly identical

Substance is more important than the title. If the terms are largely maintained and only the term is extended, it is likely to be viewed as a renewal.

Case 4: The tenant signed the new lease agreement without objection

If the tenant’s intention to exercise the right to renewal is not clearly expressed, it is difficult to immediately conclude that the right was exercised. However, if the intent to exercise the right to renewal is confirmed during the negotiation process, the situation may be judged differently.

Checklist for Tenants and Landlords

Tenant Checklist

• First, decide whether to exercise the right to renewal or to enter into a mutually agreed-upon new lease.
• If exercising the right to renewal, provide notice via a method that leaves a record, such as text message or email.
• Verify that the new lease agreement includes the phrase “Exercise of the Right to Renew.”
• If the security deposit increases significantly, clarify whether it is a new lease or a renewal.
• Double-check procedures for protecting your rights, such as obtaining a certified date and registering your change of address.

Landlord Checklist

• Distinguish whether the tenant’s notice constitutes the exercise of the right to renewal or a simple negotiation.
• If there are grounds for refusing renewal, verify the statutory requirements and the timing of notification.
• If you wish to renew the lease, clearly document your intention to terminate the existing lease and enter into a new one.
• Keep in mind that changes to the security deposit or monthly rent may be evaluated differently depending on whether the renewal is statutory or based on mutual agreement.
• Since grounds for refusing renewal—such as the landlord’s actual occupancy or rent delinquency—are likely to lead to disputes later, organize your evidence.

Summary in One Sentence

A lease renewal is the creation of a new lease agreement through mutual consent between the parties, whereas exercising the right to renewal is the tenant’s one-time right to extend the lease, guaranteed by law. Therefore, you should not only check whether a new lease agreement was drafted but also verify whether the existing lease has actually expired and whether the tenant has exercised their right to renewal.