If you come and stay in the Republic of Korea for more than a year, you might need to rent a house for the period. Renting a house in the Republic of Korea can be an interesting process for you because you will find the housing rental system in Korea quite different than in your home country. There are broadly two types of rental agreement in Korea; Jeonse(전세, 全貰), Wolse(월세, 月貰).
Jeonse(전세, 全貰) involves a large sum of deposit money(보증금, 保證金) which is up to 30-70% of the property value(the amount of a Jeonse deposit varies mostly based on the area). Once a renter pays the deposit to a landlord there is no more monthly rent needed to be paid. When the lease is up, a landlord must return the deposit in full to a renter. This is financially very advantageous to tenants so many Koreans prefer to make this agreement with their landlord if they can afford a deposit. But Jeonse can also be risky especially considering Korea’s economy today. A landlord might take out loans and default, and then a tenant might have troubles getting his/her deposit money back in full. So it is very important to check in advance whether there are no unpaid loans on the property before you make the agreement. Typically a Jeonse contract period ranges from 2-3 years, and if a tenant wants to leave earlier than the contract period, he/she is expected to find another renter who will pay a deposit.
Wolse(월세, 月貰) is similar to the Western rental agreement in which a renter only pays a monthly rental fee to a landlord without putting down a deposit. However, in Korea, it is very common that a renter pays a deposit to the landlord and still pays a monthly rent too. Instead, the Wolse deposit money is significantly less than a Jeonse deposit. Under Wolse agreement, like Jeonse, once the lease is over, a landlord returns the deposit in full to a renter. But in the case that a renter fails to pay a monthly rental fee during the lease, a landlord has the right to deduct the amount of the unpaid monthly rent from the deposit, and return the remaining deposit to the renter.
In Korea, the Housing Lease Protection Act(주택임대차보호법, 主宅任代借保護法) was enacted in 1981 to secure residential stability and a tenant needs to learn about some of the Act’s essential provisions to protect his or her rights as a tenant in certain conditions. Among such provisions, ‘opposing power’ and ‘lease registrations command system’ are very practical in many situations. To have an ‘opposing power’ that gives you the power to claim the property over lenders claiming the property, a tenant need to show proof that he/she has occupied the property and he or she registers his/her location with the local government. If a tenant fails to receive the deposit back after the termination of lease, he or she can use ‘lease registrations command’ system. You can deal with above legal matters on your own by searching for the related law, but it is always better and safe that you contact a lawyer and get legal aid concerning the matter before you enter into any Jeonse or Wolse contract in Korea.
