We live in a country where you don’t just put down your first and last month’s rent when you move into a new place. You could be putting down millions, tens of millions or even hundreds of millions of won as a deposit when renting an apartment in Korea.
When you’re talking about entrusting someone with this amount of money, you need to be careful. You also need to make sure you don’t run afoul of government requirements.
1. Use a Real Estate Agent (부동산)
You can, in theory, skip the real estate agent when making a contract, but you shouldn’t. If you make a contract through an agent, you can impose legal responsibility to that agent for unexplained defects of the house or contract errors, and then you can submit a claim for damages related to the defects or contract with that agent.
Also, to avoid an unfair contract, even though the lessor provides an unbiased looking contact, there could be an ambush clause. However, the agents usually provide government-drafted-standardized contracts, so the part you should concern is ‘Special Term (특약사항)’ usually positioned beneath a paper.
In some instances, people may even try to rent or lease you an apartment they don’t even own. Technically speaking, that is not illegal under Civil Code of Korea. However, in reality, it could bring about unnecessary disputes and headaches. The real estate agent will confirm the ownership of the apartment for you.
2. Report your alteration of residence with the Immigration office within 14 days.
You will face a fine up to a W1,000,000 if you wait longer than that. Make sure to submit the proper documentation (lease agreement, passport, alien card) that says that you moved into the location in the 14-days. If you hand them the paperwork later than that they will fine you on the spot with the evidence you just handed them.
Also, alien registration and report of alteration of residence will give you “opposing power(대항력)” which allows the lessee to reside regardless of the change in ownership, assuming all rental payments were made promptly.
3. Obtain the “fixed date” with the local office (주민센터 )
One more thing, if the owner goes bankrupt and another mortgage holder takes ownership, the renter or lessee may not get his/her deposit back first. The other debtors get paid first – unless that renter or lessee has obtained the “fixed date (확정일자)” from the local government office (주민센터)!
In that case, you can recover up to W32,000,000 of your deposit (if the total deposit is under W95,000,000). (Please note that the amount varies according to the city where you reside, and the amount stated above is for Seoul dwellers.)
If you can’t afford to lose the money, you should consider not putting more than W32,000,000 down when renting an apartment in Korea.