Supreme Court rules tenant rights lapse when lessee buys home

The Supreme Court ruled that a tenant's legal priority to recover a deposit vanishes immediately upon acquiring ownership of the rented property, even if their resident registration remains unchanged. The decision clarifies that such registration no longer serves as valid public notice of a leasehold once the occupant becomes the owner.

The case involved a corporate lessor providing rental housing supported by the Housing and Urban Fund under the Act on Protection of Residential Tenants. While the law grants these entities priority repayment rights when an approved occupant moves in and registers their residence, the court found these protections cease if that occupant subsequently purchases the home. The justices reasoned that resident registration functions as a public disclosure method to ensure transaction safety by allowing third parties to recognize the existence of a lease. However, once an occupant acquires title, their continued registration cannot distinguish between possession based on ownership versus possession based on a lease agreement, rendering it ineffective as a public notice method for leaseholds.

The bench acknowledged that this interpretation could make it difficult for corporate lessors to recover deposits and might threaten the financial stability of funds designed to support low-income households. Nevertheless, the justices stated that addressing such potential deficits is a matter for legislative solution rather than judicial reinterpretation of existing statutes, noting that the 2007 amendment granting these rights was intended to protect corporate lessors but cannot be stretched to cover scenarios where the tenant becomes the owner.