What Is Reconciliation Application Before Sue?

Reconciliation Application Before Sue(RABS) is a prewritten application between the lessor and lessee in case of the contractual disputes such as consecutive delay of rent payment,

change of space use, subletting and levy on the deposit by the 3rd party etc.

It can be legally enforced before sue when the stated disputes on the application take place.

The application can be made when closing the lease agreement usually by the request of the commercial landlord in Korea and the cost is approximately 0.1~0.15% of the total value of the lease.

= Case Story =

A building owner in Seoul has had a history of a tenant who broke and closed the business in the middle of the lease term. The tenant didn’t move out and stopped paying rent. The landlord eventually had to sue the tenant to evacuate the office when the rents had been delayed over the deferment period stated on the lease agreement.

He finally won the lawsuit but it took around 6 months and suffered the financial damage including the cost and the rents during the lawsuit.

In 2013, I was helping a Japanese medical instrument company finding its new Korean branch office in Gangnam, Seoul. After searching for a couple of months, the company decided to move into the building above.

The building owner requested to write the Reconciliation Application Before Sue(RABS) but the general manager of the Japanese company had never heard of this application and concerned about making one.