Supreme Court rules HUG must pay delayed interest on late deposit guarantees

The Supreme Court ruled that Korea Housing & Urban Guarantee Corp. must pay delayed interest to tenants if it requests additional documents more than a month after receiving a claim for deposit return insurance.

The justices concluded that unclear standard contract terms must be interpreted in favor of the customer, obligating the insurer to pay from the day following the initial one-month period until the actual payment date. This applies unless special circumstances justify the refusal or delay.

In the specific case reviewed, case number 2026Da200365, the corporation paid the guaranteed amount only after tenants completed requested corrections but refused to cover interest accrued during the delay.

The bench noted that when lower courts issue diverging rulings on the same legal issue across multiple small-claims cases, the Supreme Court must intervene to ensure legal stability and uniform interpretation, even if the cases do not strictly meet the requirement of contradicting existing precedents.

The dispute arose after tenants secured a deposit guarantee through the corporation but failed to receive funds from the landlord upon the contract's end. When they filed a claim, the corporation waited over a month before asking for supplementary documents, then paid the principal without accrued interest once the files were complete.

The ruling was delivered on May 29. The corporation's core business includes jeonse deposit return guarantees, rental deposit guarantees, and pre-sale guarantees, as well as the dedicated management of the Housing and Urban Fund.