What's the difference between commercial and residential?

What the Law Says

South Korean law treats residential and commercial leases very differently. Residential leases are governed primarily by the Housing Lease Protection Act (HLPA), which provides strong statutory safeguards for tenants — especially regarding security deposits and renewal rights. Commercial leases, by contrast, are governed by the Civil Act and lack most of these protections.

The Housing Lease Protection Act applies only to leases where the property is used as a 'dwelling' — i.e., for residential purposes — and the lease term is at least two years. It mandates that landlords must return the full security deposit within 30 days after lease termination, unless otherwise agreed in writing and registered.

Under the HLPA, tenants have a statutory right to renew their lease once — for up to five years — if they notify the landlord at least six months before expiration and meet conditions like timely rent payment and lawful use.

Commercial leases are not covered by the HLPA. Instead, they fall under the Civil Act, which treats them as ordinary contracts. There is no statutory right to renewal, no mandatory deposit return timeline, and no automatic registration or deposit protection — all terms depend entirely on the parties’ agreement.

Statutory Text

Where a lease of a dwelling is concluded for a period of two years or more, the lessee may request renewal of the lease contract once for a period of up to five years.

— Housing Lease Protection Act, s. 6 — Right to Renewal

Statutory Text

The lessor shall return the security deposit to the lessee within thirty days from the date on which the lease terminates.

— Housing Lease Protection Act, s. 10 — Return of Security Deposit

Statutory Text

This Act shall apply to leases of dwellings concluded for a period of two years or more.

— Housing Lease Protection Act, s. 2 — Scope of Application

What to Do

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