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- May 23, 2016
- by brightness86
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*Photos are for informational purposes only*
*This article should not be used as legal advice*
When you find a property you like, tell the real estate agent that you would like to lease/contract (계약하다) the property. The real estate agent will create a lease contract (계약). The day I signed a contract the following happened:
Invited back to the agent's office for a final chat and to sign the lease contract
Agent called the owner to make final negotiations and to settle the move in date (This may take place before the contract signing day)
Agent described all the money that was to be due and when
Final negotiated rent, security deposit, management fee, and real estate agent commission was detailed
3 copies of the lease agreement were made (one for me, the agent, and the building owner). These should have the signatures of the agent, the building owner, and yourself
I also paid part of the security deposit to basically hold the property. The commission payment is normally also due when you sign the contract. Agents may give you an extra day to pay.
Required Documents for Signing a Lease
Alien Registration Card (외국인등록증/외국국적동포 국내거소신고증)
Key Money/Security Deposit
Pay rent and management fees according to your lease terms (Beginning of the month, end of the month, etc.)
Real Estate Agent Commision - this is calculated via a formula and regulated by the government. The formula for Seoul is as follows:
Real Estate Agent Commission = [DEPOSIT + (RENT * 100)] * FEE PERCENTAGE (Note: If [DEPOSIT + (RENT * 100)] equals less than 50 million, then the 100 is replaced with 70 and recalculated)
[DEPOSIT + (RENT * 100)] = Below 50 million: the fee is 0.5% (max KRW 200,000)
= 50 million to 100 million: the fee is 0.4% (max KRW 300,000)
= 100 million to 300 million: the fee is 0.3% (no max specified)
= 300 million to 600 million: the fee is 0.4% (no max specified)
= 600 million+: the fee is usually negotiated (max 0.8%)
Example: [KRW 5,000,000 + (KRW 500,000*100)]*0.004 = KRW 220,000
Note: Tax is not included in the formula and is added after calculation.
Other regional commission rates can be found here: http://www.kar.or.kr/pinfo/brokerfeeall.asp
After Signing a Contract
Changing your Address with Immigration
By law, you are required to update your address with Korean immigration or your new gu office (구청) every time you move. You must report your new address to immigration or your new Gu office within 14 days of moving. There is no fee to change your address. However, you can be fined if you do not do this within 14 days of your move. For more information as well as the form you need to submit, visit the HiKorea website.
Required Documents for Reporting a Change of Address
Signed Lease OR Residence/Accommodation Confirmation Form (거주/숙소제공 확인서) The Residence/Accommodation Confirmation Form can be used if you are staying with a friend, staying in hasukjib/goshiwon, or are in an arrangement where there is no formal lease.
Alien Registration Card
Form to report change of residence (Can be downloaded from the HiKorea website or filled out in person)
Changing Your Address with the post office, banks, cell phone company, etc.
Post office: Three months of mail forwarding from the post office is available free of charge. Go to any post office with your ARC card and ask for 주소이전신청서비스.
You should also update your address with other services you use such as banks and your cell phone provider. This can be done in person at branch offices of your bank and service providers. If you have an account for Internet & TV or any other utilities, you should have that moved to your new address or cancelled accordingly.
Tips and Tricks
Registering Your Lease: Registering your lease acts as an official record of the key money payment and gives you priority should the property go to public auction. Bring your signed lease agreement to get a fixed date confirmation (확정일자) to your neighborhood community center (주민센터). In the case you do not have a community center, you can visit a local registry office (등기소).
Renter’s Insurance (세입자 보험): Also known as home contents insurance, will cover the contents within your apartment and can also cover the actual property you are renting. Note, in Korea, you can be held personally liable if your property causes damage to others (e.g. A fire starts in your apartment and spreads to other properties. The owners of the other properties can hold you personally financially responsible for the costs of rebuilding/repairs.)
Documentation: Take photos of your leased property before you move in so you will not be charged for pre-existing issues. Request any agreements and addenda to your lease be added in writing.
Plumbing/Water: Water heaters in Korea are not always indoors or insulated from extreme temperatures. Pipes may freeze or even burst during the winter. If your water heater is not indoors, it is advised to let your faucets drip warm water to prevent pipes freezing.
Plumbing may also be different from what you are used to in your home country. Piping and tubing used for water connections may not be sealed properly. I had a personal experience with this when the tube going from my kitchen sink to the main drain pipe separated and flooded my kitchen area.
If you have any more questions, please feel free to contact me here or leave a comment below.