Lease Contracts

Lease contract

The terminology used in housing contracts is often too specialized to understand. The person wishing to move into the home has both rights and responsibilities. When these responsibilities are not carried out, the contract can be cancelled. If there are things you have questions about, you need to ask all of them and make things perfectly clear in order to make sure that nothing will go wrong.
There are two kinds of housing lease arrangements," jeonse" and "wolse." Jeonse literally means "money in full" and is sometimes called "key money" in English. A specific, large sum of money is entrusted to the owner of the home and no monthly rental fee is necessary. The contract period for a jeonse lease is usually two years. Wolse literally means "monthly money" and is also called "sageulse". Little or no down payment is entrusted to the owner. When leasing a home, it is safer to work through a real estate agent.

Terminology relating to lease contracts

Guarantor

A guarantor (bojeungin) is someone who assumes responsibility for the actions relating to leasing the home in question.
You should ask a person who is close to you and has work or a stable income, to act in this capacity. In some circumstances, your school or company might be able to serve as guarantor.

Contracts

Contract forms (gyeyakseo) may be supplied by the real estate agent or available at stationery stores or photocopying shops.
Commercial contract forms are generally all the same, but additional issues may be attached as agreed on by both sides. In Korean contracts, one's legally recognized personal seal (ingam dojang) is considered more important than your signature.
These are made of wood, stone, or some other hard material with your name carved in one end.
A person can have many personal seals called "dojang," so you should have documents issued from a government office which can prove the use of your officially recognized ingam dojang.

Contract Deposit

At the time the contract is signed, a contract deposit (gyeyakgeum) might be entrusted to the owner of the home as an expression of your commitment to not violating the terms of the contract.
Since the amount of a contract deposit is determined by the rate of the lease, the more money that is paid for the lease as either jeonse or wolse, the larger the contract deposit is going to be.
Special care must be taken when there is a contract deposit involved, since if the terms of the contract are violated by the person leasing the home, the owner does not have to return the money according to a contract deposit.
The owner only has to return the money given for jeonse in the case of jeonse lease agreements.

Jeonse Deposit

Jeonse deposit (jeonse bojeunggeum) is money given temporarily to the owner in exchange for use of the home, and it is returned after the contract is over. However, if intentional damage has been caused to the unit, only part of this money may be returned as compensation.

Brokerage Commission

Once the jeonse deposit has been exchanged and your contract with the owner has been signed, you must pay the real estate agent a fee as commission. The amount of this brokerage is stipulated in law.

Things To Consider in Signing Contracts

• Contract Period :
  • - Usually two years. Make sure you understand the process for extending the contracts after the initial period is over.
• Payment Method :
  • - Make sure how any monthly fees must be paid, and what happens in case you are late in payment.
• Restrictions :
  • - Prior to signing, discuss with the owner whether there are any restrictions or prohibitions involving the use of the home you will rent.
• Items to Confirm :
  • - See a copy of how the structure is legally registered (deunggibu deungbon) and whether the owner has any serious debts.

When Contract Problems Occur

If things go wrong with the contract agreement, the Korea Real Estate Brokers Association office in your area or the free legal consultation window at the regional court will be able to tell you if you might be able to win compensation.

• Gwangju Office of the Korean Real Estate Brokers Association
• Tel : +82-62-384-7772
• Fax : +82-62-374-0553

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• Division : Construction & Housing Affairs Division in Construction Bureau
• Contact : +82-62-613-4812