Why The Hell is So Much Deposit Required for Rental Property in Korea?

Why The Hell is So Much Deposit Required for Rental Property in Korea?

22:04 1 Comments A+ a-



Okay, I've heard loads of complaints that the deposit required to rent a residential property is considered to be ridiculously high in Seoul. Sometimes, you may be asked
to make an advance payment for the entire contract period in order to avoid this lump-sum deposit. Trust me, it's got nothing to do with discrimination or whatsoever.

This is a practical question, and it needs to be explained before your anger
explodes.The reason is, it's very difficult to evict tenants whose rents have fallen into arrears. It usually takes at least 6 months or sometimes up to 1 or 2 years to evict tenants with rents in arrears, depending on the speed of the court work process.

What's more, as you may already know, most of Korean residential properties are apartments. And living in an apartment incurs another cost known as Maintenance Fee
which comprises utilities bills, cleaning of common use spaces, security and so on.
Those tenants with so many other bills to pay usually ignore this maintenance fee, and this becomes the landlord's debt. The landlord cannot have another rent contract until the maintenance fee is fully-paid. An average maintenance cost for a 3 rooms-apartment is about KRW 200,000~300,000 per calendar month (USD 200~300  PCM).



So, in landlords' point of view, what they lose from having such tenants is not only the monthly rent foregone but also the maintenance fee they have to pay instead of tenants. This is why landlords sometimes ask for 2-year-rent worth deposit. 

And the last one, the type of rent could be Ban-Jeonse, which literally means "half-Jeonse" and in this case, the deposit required may be high while the monthly rent can be much cheaper than that of normal Wolse. If you do not know much about Korean Property Rent System, you can find the information about it in this blog.

Since the amount of deposit is quite much, you may be worrying if your deposit is safe. 
I'd like to advise you that your money is safe. If you registered your moving-in at the community service center, then, your deposit is protected by Housing Lease Protection Act. The deposit will be fully-refunded upon termination of lease unless you had damaged the house too much or set fire to the property

Don't get frustrated if the property you have in your mind requires too much deposit.
There's always a chance for negotiation. So, what you need to do is "ASK" first.


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22 May 2017 at 06:31 delete

The terms of the offer can also typically include contingency period which will allow the investor to verify the condition of the property, obtain the capital required. apartment management companies

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