A deposit lawsuit and seizure notices arrived at the same time
A landlord used an enforcement deposit to cut off the risk of paying twice, and the legal costs were set too

Hello, this is Kwon & Partners Law Office.
When seizures pile up on a tenant’s deposit, a landlord cannot tell who should be paid. Paying the wrong person could mean paying the same money twice.
Today we share the case of landlord A, who received a deposit lawsuit from the tenant and seizure and collection orders from creditors at the same time. Of the KRW 93.7 million claimed, the court recognized only KRW 78,904 in late-payment interest for 12 days, and the tenant bears all legal costs.

A is a landlord who rented out one apartment. In December 2018, A signed a 2-year lease with a KRW 100 million deposit and KRW 1 million monthly rent, and in January 2021 renewed it with the rent adjusted to KRW 1.05 million. But tenant B stopped paying rent from mid-February 2023. While the two sides disputed the end of the lease, B sued A to get back about KRW 93.7 million of the deposit. The apartment had still not been vacated, and when A repeatedly asked when B would leave, the only answer was “please wait.”

That was not the only problem. B’s deposit claim already carried two provisional attachments (KRW 50 million and KRW 80 million) obtained by B’s other creditors. In October 2023, during the lawsuit, a seizure and collection order (claim amount KRW 450 million) from another creditor, C, also reached A. Paying B could expose A to the creditors, and paying the creditors could expose A to B. A entrusted the case to a legal team that included Kwon & Partners Law Office.

There were three key issues.

① Can the landlord get the apartment back first?
Returning the deposit and handing over the apartment are exchanged at the same time. When a tenant sues for the deposit without vacating, the landlord needs a way to demand the handover.

② Who should get a deposit with overlapping seizures?
The safe route is not to pay anyone on your own, but to place the money with the court through an enforcement deposit. That ends the risk of double payment.

③ Can the tenant still sue directly after a collection order?
For the part covered by a collection order, only the collecting creditor may claim it, not the tenant. How much late-payment interest applies, from when and at what rate, was also in dispute.

The legal team followed this order: handover first, deduct then deposit, and recover costs.

First, we got the apartment back. Along with the answer, we filed a counterclaim for handover of the building. After receiving it, B gave over the door code and key location around the end of October 2023, and we withdrew the counterclaim once the handover was done.

Second, we deducted exactly what was owed, then made the deposit. From the KRW 100 million deposit we subtracted the unpaid rent and maintenance fees up to the handover date, and on November 8, 2023 made an enforcement deposit of the remaining KRW 90,582,880 under the Civil Execution Act. The Supreme Court also holds that a landlord simply deducts unpaid rent and fees from a lease deposit (Supreme Court Decision 2004Da56554, December 23, 2004). Once the enforcement deposit is made, the duty to return the deposit ends (Supreme Court Decision 2018Da226428, December 16, 2021). The deposited money is later shared among the creditors in the court’s distribution procedure.

Third, we pointed out the part B had no standing to claim. Only the collecting creditor can claim the part covered by the collection order, and late-payment interest is limited to 12 days, from the day after the handover to the deposit date.

Fourth, after winning, we also settled the legal costs. Since the judgment made the tenant bear the costs, we separately applied for a legal cost determination to fix the amount, including attorney fees, that can be claimed from the other side.