Apartment Lease Contract (Jeonse)
Jeonse : The lease of an apartment (on a deposit basis) is made after prepaying a large sum of money as deposit. Monthly payments are small and there are no extra expenses. The full initial deposit is repaid at the end of the contract. As a special lease system in Korea, the tenant is expected to pay a substantial sum as an initial deposit – with an expected 50-80% for the apartment`s sale value- but the total sum will be fully returned at the end of the agreed residency period (commonly after 2 years). Most tenants prefer this contract.
Monthly rent (monthly rent + deposit): This is a method of paying a certain amount of monthly rent. It is a simple monthly form. that you pay a certain amount of money as a security deposit and pay the rent separately.
This is a method of deducting the monthly rent from the amount of prepaid money and paying back the balance at the end of the contract.
Monthly Rent and Security Deposit (Wolse)
Wolse : Wolse is a contract involving a returnable deposit (much smaller compared to Jeonse) and a monthly rental fee. This can includes an up-front deposit and rent paid monthly. The deposit returned upon completion of the tenancy, or alternatively the rent can be automatically deducted monthly from the initial deposit, with the remaining amount (if any) returned to the tenant on completion.
How to Make a Lease Contract
Before making a contract, you should complete a claim-obligation relationship of a relevant house. Nowadays it is mandatory for an estate agent to explain the conditions, position and legal relationship of a related house and to present basic information, such as a certified copy of the registration, to a tenant before the contract is finalized. If a tenant is cheated or loses money due to the fact that an estate agent does not confirm these facts, by law, the agent is required to compensate the tenant for these losses. So a tenant should be able to check the legal relationship of the house without any difficulties. Contracts should be drawn up to three copies: one for the tenant, one for the leaser and the other for the agent.
※ Check list for creating a contract:
- Double-check the amount of deposit, payment methods, brokerage fees for real estate, moving-in day and the contract terms.
- If a contract is agreed upon, tenants keep one copy of the contract and the leaser keeps the other copy.
- Have money ready in advance, because you should pay an additional charge to a moving company for other services on the moving day.
- After moving, you should visit the public service center or the immigration office and report your new address within 14 days.
- Visit a registry office with a Certificate of Alien Registration and receive a fixed date. If you obtain the date, you are able to be protected from any unexpected situation.
※ A certified copy of the register is issued once you are able to confirm a certified copy of the register as the contract is more important than examining a house. This process was previously inconvenient, because in the past you had to visit the register office and it took a long time. However, it has become easier, since you can simply read and issue a certified copy of the register by using the online registeration office. A certified copy of the register must be checked when you make a real estate contract and hand in the middle payment and balance.
To find the Supreme Court of Korea online, visit http://www.iros.go.kr
Terms of Lease Contract
The term of lease contracts are normally 2 years for protection of a tenant, but contracts for less than 2 years under an agreement between parties can also be arranged. In that case neither a tenant nor a lease can declare his/her intentions related to the renewal or the end of the contract from 6 months to 1 month before the end of the 2-year contract, as the lease contract is regarded as being renewed under the same terms and conditions as before, at the contract`s ending point.
Payment Methods and Amounts: The amount of the down payment is usually 10% of a deposit. For example, if a deposit is 2,000,000 won, a down payment is 200,000 won. The remaining amount, 1,800,000 won, is paid on a specific day before moving, and the balance is paid off on the moving day. Sometimes the balance is fully paid on a moving day, so remember to keep any and all receipts.