Do we have to arrange for the notarization of our lease contracts?
Question:
We have a complex building which include both apartments and office for lease. Now, we are planning to sign lease contracts with clients. Do we have to arrange for the notarization of our lease contracts?
Answer:
Under Article 492 of the Civil Code, it is stated that “A contract for renting a house must be made in writing; if the renting term is six months or longer, the contract must be notarized or authenticated and registered, unless otherwise provided for by law”.
Under Article 93.3 of the Housing Law, contracts in respect of house transaction must be notarized except for the case that the seller or lessor has the function on housing business.
Thus, in your case, if your company already has the function on housing business, lease contracts in respect of your apartments do not need to get notarized.
In respect of the office part, under Article 67.3 of the Law on Real Estate Business, it is provided that the notarization of contracts on transaction of real estate properties shall be subject to agreement by the parties except otherwise provided by laws. As such, it could be seen that there could be a conflict between the Civil Code and the Law on Real Estate Business on whether contracts for office lease shall need to get notarized or not.
Notwithstanding, in our opinion, the Law on Real Estate Business could be considered as a special law, thus its provisions may prevail. In such a case, it could be interpreted that contracts for office lease shall not be required to get notarized as it is subject to agreement by the parties.
Even where your contracts for office lease are not notarized while they may be required to get notarized, provisions of those contracts are still valid and applicable. If any dispute arises and be referred to the court for settlement, the court shall give the parties a certain time period for getting the contract notarized. If one party refuses to notarize the contract in such time period, they shall be responsible for any damages which may occur.
