Unlocking the Truth: Why Original Owners Must Receive Deposits for Auctioned Trust Properties
Understanding Trust Agreements: Who’s Responsible for Returning Lease Deposits?
Three years ago, I paid a deposit for a leased officetel that was in trust. But soon after, the officetel was put up for public auction and a new owner appeared. I didn’t know who to ask to get my deposit back, and I was at a loss.
Recent Supreme Court Ruling Clarifies Responsibility
On the 5th, Eom Jeong-suk, a real estate attorney (Beopdo Comprehensive Law Firm), released an explanation of the recent Supreme Court ruling through the YouTube channel Beopdo TV. This ruling is an important case that clarifies who is responsible for returning the lease deposit for real estate under a trust agreement.
What is a Trust Agreement?
A trust is a term that means entrusting property to a trust company, and it refers to the owner entrusting the property to a trust company to manage or operate. Here, the trust company is a company that manages the entrusted property, and the trust contract is a promise made between the owner and the trust company. The trustor refers to the person who entrusts the property, that is, the original owner.
Special Circumstances in This Case
This case had special circumstances. The trustor entered into a lease agreement with the lessee without the consent of the trust company. The trust agreement requires the trust company to enter into a lease agreement with the consent of the trust company, but this was violated.
Attorney Eom’s Explanation
Attorney Eom said, “This ruling is a case that easily organizes the complex legal relationships of real estate collateral trust agreements,” and explained, “In this case, since the consignor entered into a lease agreement without the consent of the trust company, it made it clear that the responsibility for returning the deposit lies with the original owner, the consignor.”
Supreme Court Ruling
The Supreme Court ruled that if the contents of a trust agreement are recorded in the trust register, it is effective against third parties. In this case, since the lease agreement was entered into without the consent of the trust company, even if the ownership changes through public auction, the responsibility for returning the deposit lies with the previous owner. Therefore, the new owner does not take over the responsibility for returning the deposit.
Implications for Tenants
Attorney Eom said, “There are many cases where tenants are confused about who to claim their deposit from after the landlord changes through a public auction,” and added, “This ruling makes it clear that in the case of a lease agreement concluded without the consent of the trust company in the trust contract, the return of the deposit must be claimed from the previous owner.”
Important Precedent
This Supreme Court ruling is expected to be an important precedent in disputes related to trust agreements. In general, the lessee often claims the deposit from the new owner after a public auction or auction, but in cases like this one where the trust company’s consent was not obtained in the trust agreement, it should be noted that the deposit must be claimed from the previous owner.