Liens and Pledges: Requirements for Creation and Methods of Enforcement

Based on 44 consultation cases · Updated October 4, 2026 · Translated from the Korean original.

A possessory lien arises when a person lawfully possesses another person’s property and has a due claim relating to that property; the connection between the possession and the claim is important. A pledge requires checking how a right, such as a claim or bearer claim, is pledged as security, the requirements for asserting it against third parties, and how it is enforced.

People involved → Claimant or pledgee → Debtor or property owner → Auction buyer or third-party obligor → A claimant seeks payment using property or a claim held as security → Lien route → Was the property lawfully possessed, and is the due claim connected to it? → Yes → Was the lien acquired before seizure took effect? → No - Civil Act Article 320 → Do not assume the lien can be asserted → Yes - Civil Execution Act Article 92(1) → The lien may be asserted, subject to its limits → No - Civil Execution Act Article 92(1) → Claim pledge route → If a claim document exists, was it delivered, and was required notice or consent given? → Yes - Civil Act Articles 347, 349 and 353 → No - Civil Act Articles 347 and 349 → Scope and priority → A lien may cover the whole property until full payment; a prior mortgage alone does not defeat a lien acquired before seizure → Use and waiver → Do not use, l…

Key points

A lien arises when a person possesses another person’s property and has a due claim that arose in connection with that property. A lien is not recognized if possession began through an unlawful act (Civil Act, Article 320 (민법 제320조)).
A claim for the price of construction materials does not become a claim arising in connection with the building itself merely because the materials were used in the building (Case 10).
There must be a connection between the property subject to the lien and the claim, but a lien is not excluded merely because the claim arose before possession was acquired (Case 18).
A lienholder may exercise the lien over the entire property until the claim is paid in full. If construction payments are not allocated separately to each property, a property of which only part is possessed may secure the full amount of the claim (Civil Act, Article 321 (민법 제321조); Case 9).
A lien acquired by taking possession after the seizure takes effect through registration of the entry of the decision to commence an auction is difficult to assert against the auction purchaser. By contrast, a lien acquired before the seizure takes effect is not rendered unenforceable merely because a mortgage was created first (Civil Execution Act, Article 92(1) (민사집행법 제92조 제1항); Cases 4 and 17).
A lienholder may not use, lease, or provide the property subject to the lien as security without the debtor’s consent, but use necessary for preservation may be permitted. Even lawful use may give rise to liability to return any benefit actually obtained as unjust enrichment (Civil Act, Article 324 (민법 제324조); Cases 13 and 23).
An agreement to waive a lien is valid, and even if the lienholder continues to possess the property after waiving the lien, exercise of the lien may not be recognized in the absence of another legal basis (Case 20).
When a pledge is created over a claim, any document evidencing the claim must be delivered to the pledgee, if one exists. A pledge over a claim payable to a named creditor must meet the requirements for asserting it against third parties, such as notice to or consent from the third-party obligor. The pledgee of a monetary claim may claim directly up to the amount of their own claim (Civil Act, Articles 347, 349, and 353 (민법 제347조·제349조·제353조); Case 2).

Frequently asked questions

Q. If I have not been paid for construction work, can I exercise a lien over the building?

The construction payment claim must have arisen in connection with the building, be due, and satisfy other requirements, including lawful possession of the building. The price of materials supplied under a separate materials supply contract does not become a claim in connection with the building merely because the materials were used in it.

Case 10, Case 12, Case 18

Q. Do I have to keep possession continuously from the time the claim arises in order to exercise a lien?

According to the precedent cited in the case, no particular sequence is required between the claim and possession of the property. Even if the claim relating to the property arose before possession of that property was acquired, a lien may be asserted if the other requirements are met.

Case 18

Q. If I acquire a lien by taking possession after an auction has commenced, can I assert it against the purchaser?

If a lien is acquired by taking possession from the debtor after the seizure takes effect through registration of the entry of the decision to commence an auction, it is difficult to refuse delivery to the auction purchaser by asserting that lien. One case held that whether the person who took possession knew that the auction had commenced does not affect the outcome.

Case 17

Q. Can a lien arising after a mortgage was created first be asserted against an auction purchaser?

The fact that a mortgage was created first does not, by itself, defeat the lien’s enforceability against others. The case explains that if the lien was acquired before the seizure took effect through registration of the entry of the decision to commence an auction, it may be asserted against the purchaser regardless of when the mortgage was created.

Case 4

Q. Can a lienholder live in a house or building, or rent it to a third party?

A lienholder may not use or lease the property subject to the lien without the debtor’s consent, but living in a residence may, absent special circumstances, be recognized as use necessary for its preservation. However, if the lienholder actually obtains a benefit from its use, they may be liable to return that benefit as unjust enrichment. If the property is leased to a third party, the specific nature of the benefit actually obtained must be considered.

Case 13, Case 23

Q. If I agreed to waive my lien, can I still assert it if I continue to possess the property?

An agreement to waive a lien is valid, and a lien may be extinguished if it is waived afterward. Continuing to possess the property after waiving the lien does not, by itself, revive the lien; without a separate legal basis for possession, the possession may be unauthorized.

Case 20

Q. Can a contractor exercise a lien if the final payment is withheld because of defects in the construction work?

A claim for repair of defects or a claim for damages in lieu of repair may be subject to simultaneous performance with the construction payment claim. If the amount corresponding to the defects and damages is at least equal to the balance, and the owner of the contracted work has invoked the right to withhold the entire balance until simultaneous performance, the contractor may be unable to exercise a lien if they have not repaired the defects or paid damages.

Case 12

Q. What procedures are required to create a pledge over a claim for a fixed-term deposit?

If a document evidencing the claim exists, it must be delivered to the pledgee. A pledge over a claim payable to a named creditor may be asserted against third parties only if the third-party obligor is notified of the pledge or consents to it. The case also explains that one way to meet the requirements is to obtain the bank’s consent and then establish a fixed date.

Case 2

Q. If a pledge is created over a deposit claim, can the pledgee receive the money directly?

If the subject of the pledge is a monetary claim, the pledgee may claim directly from the third-party obligor up to the amount of the pledgee’s own claim. The pledge may also extend to accessory claims, such as damages for delay on the claim that is the subject of the pledge.