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Jeonse and Monthly Rent Contracts

Residents > Housing > Jeonse and Monthly Rent Contracts
The terminology used in housing contracts is highly specialized and therefore difficult to understand. The person wishing to move into the home in question has both rights and responsibilities. When these responsibilities are not carried out, the contract can be cancelled. If there are things you do not understand, ask all the questions you need to and make things perfectly clear in order to make sure nothing goes wrong.
Their are two kinds of housing lease arrangements," jeonse" and "wolse," Jeonse literally means "money in full" and is sometimes called "key money" in English. It is where a specific, large sum of money is entrusted to the owner of the home and no monthly rental fees are paid to the owner. 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, and instead rental fees must be paid every month. When leasing a home, it is safer to work through a real estate agent.

Guarantor

Guarantor photo

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

Contracts

Contracts photo

Contract forms (gyeyakseo) may be supplied by the real estate agent or found at stationery stores or photocopying shops. Commercially sold contract forms are generally all the same, but additional issues that have been agreed on by both sides may be added as well.

Personal Seal

Personal Seal photo

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 and have your name carved in one end. A person can have many personal seals, which are just called "dojang," so you should have documents from a government office proving that the dojang you are going to use is your officially recognized ingam dojang. However, it is not uncommon to use your written signature to make the contract official.

Contract Deposit

Contract Deposit photo

A contract deposit (gyeyakgeum) might be entrusted to the owner of the home at the time the contract is signed, as an expression of your commitment to not violate the terms of the contract. Since the amount of a contract deposit is determined by the rate of the lease, the more money being 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 given as a contract deposit.

The owner only has to return the money given as 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, when there has been intentional damage done to the unit, only part of this money may be returned, as some of it may be kept 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 determined by law.

Things To Check At Contract Signing

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.

The Korea Real Estate Brokers Association office (in Busan)
Tel. : 051) 803-8060~2
Fax : 051) 803-2004
Address : Red Cross Bldg.(9th Floor) 144 Dongseong-ro, Busanjin-gu, Busan.