Responding to Trust Fraud: From Eviction Threats to Security Deposit Recovery
26-04-23 164
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1. Case Overview
The client entered into a lease agreement with the defendants and paid a deposit of 30 million KRW. However, a problem arose when it was later confirmed that the property was owned by a trust company. The defendants entered into the contract without the authority to lease and failed to fulfill the obligation to "cancel the trust registration" as agreed upon at the time of the contract. Consequently, the true owner (the trust company) filed a lawsuit for the delivery of the building, forcing the client’s family to vacate. The client decided they could no longer maintain the contract, terminated the lease due to the defendants' default, and filed a claim for the return of the deposit.
2. Case Specifics
This case mirrors the structure of recent "Jeonse" deposit fraud issues. While it appeared to be a normal lease on the surface, the lessor lacked actual authority. Trust-owned properties are difficult for the general public to navigate, making it hard to verify if the counterparty has legal authority. In this case, the lack of authority and the unfulfilled special terms led to the severe consequence of the tenant being evicted.
3. Legal Strategy and Assistance
Law Firm Theo focused on the validity of the lease and the defendants’ liability. First, we clarified that the defendants lacked legal leasing authority under the trust structure. Second, we proved the defendants' default based on the unfulfilled special terms in the contract. We argued that the lease termination was lawful and logically structured the return of the deposit. By simplifying the complex trust structure for the court, we ensured a swift judgment.
4. Outcome
The court accepted the client’s claims and issued a Recommendation for Decision, ordering the defendants to jointly pay the 30 million KRW deposit plus delayed interest and bear all litigation costs. The decision was finalized, allowing the client to recover their rights quickly. This case is significant for resolving a complex trust-related deposit dispute in a short period through systematic legal reasoning.
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