Background
Our client, a tenant, gave advance notice that the lease would end and prepared to move into new public housing (Happy Housing), but the landlord failed to return the KRW 110 million deposit, saying money was tight. Unable to recover the deposit, our client could not put down a sufficient deposit on the new home and ended up paying more in monthly rent. Changchun represented the tenant (the plaintiff).
The Issue — Can the "Additional Rent Loss" Be Claimed on Top of the Deposit?
Return of the deposit was clear enough; the issue was whether the difference in monthly rent caused by not receiving the deposit could be claimed from the landlord as loss. Such loss is compensable where the debtor knew or could have known of the circumstances (special damages, Civil Act art. 393(2)).
How Changchun Helped
Changchun (attorney Donghwan Shin) proved that our client had notified the landlord in advance of the moving plans and the intended move-in, and that under public housing's "deposit–rent conversion" structure a smaller deposit means higher rent, showing that the landlord could readily have foreseen the additional rent loss.
Outcome
The court ordered payment not only of the KRW 110 million deposit with default interest but also of the rent differential of roughly KRW 320,000 per month that our client had to bear because the deposit was not returned.
Secondary losses caused by the late return of a deposit can also be recovered where it is proven that the landlord could have known of the circumstances. (Outcomes may differ depending on the facts of each matter.)