The Supreme Court pointed out in the 107-Tai-Shang-1401 Civil Decision of December 26, 2018 (hereinafter, the “Decision”), holding that in case of any beneficial cost defrayed by a lessee for a leased object, if the lessor is aware of such cost but does not object, such cost shall be reimbursed upon termination of the lease to the extent that the reimbursement shall be limited to the current increased value.
According to the facts underlying this Decision, the Appellee filed a complaint alleging as follows. The Appellant had leased the property at issue from the Appellee pursuant to the leasing agreement at issue. However, the rent was not paid pursuant to the agreement. Therefore, the leasing agreement was terminated and a request was made to return the property at issue and the unjust enrichment equivalent to the rents for the period of occupation. The original trial court rendered a decision in favor of the Appellee, and the Appellant filed this appeal.
According to the Decision, if the value of a leased object is increased due to the lessee’s defrayment of any beneficial cost, while the lessor is aware of such cost but does not object, the cost shall be reimbursed upon termination of the lease. However, the reimbursement shall be limited to the current increased value, as specifically stipulated under Article 431, Paragraph 1. The Appellant asserted that he had set up around 10 hot spring rooms and 10 accommodation rooms at the property at issue as a result of his defrayment of a beneficial cost. Therefore, the above requirement and the argument about the offset against the payable rents are important methods of defense concerning whether rents were still payable and how much was payable. Since the failure of the original court to consider them was also questionable, the original decision was reversed and remanded.