In Korea, typical types of residences are detached houses, apartments, studios (called ‘officetels’ in Korea), multiplex houses, and multi-household houses (etc.). In Korea, the price of housing is very expensive, and houses in metropolitan areas are far more expensive than those in rural areas.

1. Buying a House and Rental Contracts

Buying a house

When you buy a house, there are many things to consider: the house’s location, the direction it faces, transportation, surrounding environment, etc. Once you decide to buy a house, you must get a certified copy of a real estate register to check ownership, mortgage loans, etc., so there won’t be any unpleasant surprises after the contract is finalized. Finally, when you sign a housing contract, you must make sure that everything is written correctly and in detail.

Lease on a Deposit Basis

Before moving into a house, tenants usually pay a large sum to the landlord. When the rental period ends, the deposit is returned to the tenant in full (minus any damages). Typically, you can rent a whole house, or only part of a house (1 floor, 1-2 rooms, etc.). Rental contracts are usually made for 2 years (for officetels, 1 year), and by law the landlord cannot terminate the contract before the end of the two-year period if the tenant wishes to stay until the end of the contract. In fact, a tenant has the right to stay in a house for 2 years even under a 1-year contract pursuant to the Housing Lease Protection Act.

Banjeonse (Half Deposit System)

With the recession in the housing market and the current trend of lower interest rates, leaseholders in Korea have recently been shifting their lease system from the previous jeonse (deposit system) to one of banjeonse (half deposit system), in which a deposit is combined with a monthly rent to secure profitability for the owner. Today, three out of ten houses are leased under the half deposit system.

To calculate the rent for their properties, leaseholders use the average monthly interest (200% of the interest rates at banks) accrued by the deposit. For example, assuming that under higher interest rates, the deposit money would increase from KRW 300 million to KRW 400 million over two years, leaseholders now divide this increase of KRW 100 million into a monthly rent of KRW 400,000 to KRW 600,000, and offer their properties for the deposit money of KRW 300 million and a monthly rent of KRW 400,000 to KRW 600,000.

Wolse (Monthly Rent)

You can also get accommodations on a monthly rent basis. You will still have to pay a small deposit, much smaller than that of a lease, but you will have the advantage of being able to negotiate the deposit depending on the period of your contract. If you can afford a higher monthly rent amount, the deposit can be smaller, and vice versa. Wolse conditions depend on the size and number of rooms, and other facilities.

Neither a lease nor a monthly rent arrangement will include the cost of utilities. You have to prepare furniture and home appliances separately, but many multiplex houses and officetels are equipped with basic home appliances such as a refrigerator, washing machine, etc.

Housing checklist

There are many ways to search for a house in Korea. Although using fliers on the street and visiting advertised places in person is one method, the most common method is to use a real estate agency. If you use a real estate agency, an agent will find housing that meets your qualifications and prepare necessary documents for you. By going through a real estate agent, you will be able to make a safer contract and avoid any future legal problems. Real estate agents charge a commission fee based on the house price, so it is advisable to check the brokerage fee on the Internet in advance.

Contracts

  • Contract Counterpart:

Rental contracts must be made with the actual owner of house. In the contract, the lease period, deposit amount, monthly rent amount, and other important information must be specified. In the case of subletting or taking over a contract from a previous tenant, be cautious of giving large deposits. Since you are not making a contract directly with the owners, the owner is not obligated to give you your deposit back if he/she does not agree with the contract.

Before entering into a contract, it is imperative that you check the identity of house owner, and check the required documents of the owner or the owner’s official representative (authentication certificate of one’s seal, letter of delegation). The identity of a house owner can be verified by examining a certified copy of the person’s real estate register, which can be easily obtained on the Internet. It is good to check the real estate register several times throughout the process: before making your down payment, interim payment, and final payment.

  • Register :

Checking the real estate register before entering into a contract is just as important as seeing the house in person. The register contains the address of the house, the name of the landlord, and the total area and other structural details, and also gives information regarding whether the landlord owns the building outright or is paying a mortgage. A certified copy of the register can easily be issued online at www.iros.go.kr without visiting the registry office. Since this is an extremely important part of the house rental process, be sure to ask a Korean friend or colleague for assistance if you are unable to access the register yourself.

  • Down Payment and Deposit:

A down payment is not required by law, but people typically pay 10% of the total deposit as a type of placeholder to prevent someone else from claiming the house. For example, if the total deposit is 2 million won, then the down payment would be 200 thousand won. The remainder of the deposit, 1.8 million won, would then be paid on an agreed date before moving in. Full payment must be made before or on the move-in date. Make sure to keep all receipts.

Items to be included in a rental contract: Address of the rental unit (The address on the contract should match the one on the register.), Contract payment (Deposit and monthly rent), Due dates for the down payment and the balance payment(s) (It is safe to pay up to 10% of the deposit as a down payment.), Term, Signatures or thumbmarks of the landlord and the tenant

Termination of Contract and Deposit Refund

If a tenant decides to move out before the contract period ends, the house owner can deduct the amount of the upcoming monthly rents (up until the expiration date) from the total deposit and then return the rest.

For example, let’s say that you live in a room with a KRW 2 million deposit and a monthly rent of KRW 150,000 and you decide to move to another place 3 months before the end of your housing contract. If another tenant moves in right away, the landlord would not subtract any money from your deposit. If the landlord is not able to find a new tenant, it is completely legal for the house owner to return only KRW 1.55 million to you, subtracting 3 months’ rent of KRW 450,000 (150,000 x 3 months) from your deposit.

If you do not wish to renew your contract, you should give notice (to your landlord) at least one month before the end of your contract. If you have given advanced notice, it is illegal for your landlord to withhold your deposit. If your landlord wrongfully withholds your deposit, you can seek redress through a civil action. This may take some time and requires some complex procedures. Should such a situation occur, there are various support centers from which you can seek help.before the end of your contract. If you have given advanced notice, it is illegal for your landlord to withhold your deposit. If your landlord wrongfully withholds your deposit, you can seek redress through a civil action. However, this may take some time and requires some complex procedures. Should such a situation occur, it is advisable to seek legal assistance by contacting the Korea Legal Aid Corporation (KLAC).

Things to do a month prior to moving out: At least one month before your contract expires, you must tell your landlord whether you intend to leave on the date your contract expires, or wish to stay longer. If you do not discuss this with your landlord, your contract is automatically renewed, and you may lose the chance to move out when you want to. Many people forget and make this mistake.

This content is a summary of the housing culture page of 2021 Guidebook for Living in Korea with the consent of the Danuri website.

2. Living around Seoul National University

Many SNU students live near Seoul National University Station, Sillim Station, Nakseongdae Station. Let’s take a look at the pros and cons of each area suggested by Seoul Survivor!

Pros and Cons

We hope you find this article helpful. Please leave any comments down below if you have any questions about residency in Korea!