Starting from June 1, the South Korean government has issued a new policy that a declaration is required within 30 days after signing a full rent (전세) or monthly rent (월세) apartment, failure to declare will result in a fine ranging from 40,000 won to 1 million won.
Why declare?
The South Korean government stated that because of the long-term existence of short-term rental contracts. When finding houses for rent in South Korea, you might observe that the landlord may change the content of the contract after settling, which can affect the interest of the tenants. In this situation, after the implementation of the declaration policy, a confirmation date can be given, and the tenant’s deposit will be protected, so this is a system that is for protecting the tenant’s rights over their rentals.
Implementation area and conditions
Metropolitan areas (Seoul City, Gyeonggi Province, and Incheon City), local metropolitan cities, Sejong City, and municipalities under the jurisdiction of each region.
Amount
The security deposit for a fully rented apartment is around 60 million won. The security deposit for monthly rent is around 300,000 won.
Room Type
All residences covered by the Residential Rental Protection Law include apartments, examination centers, dormitories, slab houses, plastic greenhouses, etc.
Reporting method
When you rent in South Korea, the landlord and tenant can declare by themselves or entrust a real estate agency to declare. Both online and offline reporting methods should be supported. For online transactions, this refers to submitting a photo of the lease contract online as a declaration, and offline transactions refer to the declaration at the district office, resident center, etc. of the area where you live. If there is no lease contract, you need to submit documents, passbooks, deposit details, etc. that can prove the lease declaration.
Circumstances of exemption from the declaration.
For houses that have already been previously declared and there are no changes with the rent and security deposit, then they are not required to have a rent declaration.
Fine
- If the lease contract is falsely reported, a fine of 1 million won will be imposed upon discovery.
- Those who fail to report within 30 days after signing the contract will be fined 40,000 won to 1 million won based on the time and contract amount.
- However, during the first year of implementing this system, until May 31, 2022, no fines will be temporarily imposed.
The difference between monthly rent and full rent
Monthly rent
When signing a contract, you’ll have to pay a security deposit to the landlord. During the contract period, you’ll only need to pay a fixed amount of rent every month. Upon check-out, the landlord refunds the security deposit to the tenant.
* For the monthly rentals in South Korea, the rent will decrease if the security deposit is increased; if the security deposit is reduced, then the rent will increase.
Full rent
When signing the contract, you’ll be paying the full amount with a security deposit to ensure payments to the landlord. During the stay, there is no need to pay any rent. When checking out, the landlord will return the security deposit to the tenant.
* For fully rented houses in South Korea, the security deposit will be higher compared to monthly rentals.
