After signing the contract, there are things to settle before moving into Korean housing. One of these is payments, aside from the security deposit and monthly rent, there are also other factors you should pay attention to. It’s important to know these things and to settle them first before moving in to avoid forgetting and having these fees build up over time.
- Monthly Rent
After paying a certain amount of security deposit for a typical Korean apartment, you’ll have to pay your monthly rent. The security deposit will be returned after the contract expires. Compared to the security deposit, the monthly payment is less, but the deposit and rent can be adjusted through negotiation with the landlord. If the deposit increases, the monthly rent will decrease; if the deposit decreases, the monthly rent will increase. According to the law, if the rent is delayed more than two times, the rental contract will be terminated or ordered to leave.
For reservation of apartments: A sum payment of a large security deposit during the contract period will be given instead of paying a monthly rent. During the stay, no monthly rent will be required, and the deposit will be returned after the contract period ends.
*You can ask for a loan transfer for a large amount of deposit for your apartment. The landlord can charge interest on bank deposits as an investment or use of funds, so the loan transfer is widely welcomed by the landlord; Although it is difficult to prepare a huge security deposit at one time, this is also beneficial to the tenants because the full security deposit can be retrieved after the contract period ends. Before signing a contract, be sure to confirm the building’s accounts, if there is a loan or mortgage, etc.
- Margin
In modern Korean houses, the security deposit means that a large amount of money is paid to the landlord when signing the contract, and the money will be returned to the tenant when checking out. The security deposit for a monthly rented apartment is usually 10-20 times higher than the monthly rent itself, and the security deposit for housing in Seoul is generally between 2 million and 10 million won. There is usually no security deposit or monthly rent for overnight stay (lodging) and examination center (dormitories).
Note: The security deposit can only be called to the name of the contract(landlord). The name of the rental contract must also be recorded in the name of the landlord, and the name of the transfer account must be the same as the name recorded in the contract.
- Management fees, utilities, gas (floor heating), and internet
Management fees can be similar to domestic property fees, cleaning, facilities, garbage sorting, etc. in public areas. The management fees will depend on the location and room conditions. The general management fee for one room and two rooms is around 50,000 to 100,000 won, and high-end apartments such as Cheongdamdong in Gangnam also have a management fee of 150,000 to 200,000 won.
As for water, electricity, gas, internet, etc., each apartment is different. Some are included in the rent or management fee, some are part of the package (only water and electricity are included), and some are fully paid by the tenants. Whether it is included or not will be indicated in the contract, so you must carefully check the price of the management fee and the factors it includes when viewing the house and before signing the contract.
Electricity/Gas. So how do you pay for these expenses if you pay yourself?
-The bill will be sent to the home residence
-Confirm the payment deadline, such as 2020.12.25, which means payment must be made before December 25, 2020
-Payment methods: Bank transfer (or electronic bank transfer), if you go to a bank near your home, the bank teller will help you with the payment process. You can also go to the convenience store to pay your bills.
- Contract deposit/ intermediary fee
The contract deposit refers to the payment of 10% of the deposit (for example, 5 million won x 10% = 500,000 won) to the homeowner before signing the contract. Show that you have paid for this apartment and the money will be refunded to the tenant when you sign the contract.
The real estate agency fee is the amount paid by both parties to the transaction when the real estate contract is established. Their service fee includes the actual expenses (various certification fees and travel expenses) required to confirm the management relationship of the agency and other issues.
The basis for calculating the service fee is calculated following the regulations of each city, province, or district within South Korea, and a certain percentage of the deposit and monthly rent (0.3 to 0.8% of the total contract value), and it is calculated on NAVER Search to find the relevant calculation formula.
If your Korean is not fluent, this might cause trouble in other real estate agencies. Ziptoss provides English services, we promise transparent handling fees, no fraud or additional charges, and protect your residential rights. The amount of the intermediary service fee is stated on the contract and can be paid together with the contract deposit. When signing the contract, be sure to confirm whether the amount and payment method are correct.
- Repair costs and compensation for property damage
For repair costs, the responsibility should be divided with the owner before moving in. The unavoidable repair costs should be handled by the landlord. However, simple repairs such as replacement of low-value consumables (lights, faucets, door handles) caused by improper management of tenants (wallpaper, floor glue, electronic locks, etc.) or replacement of low-value consumables shall be handled by the tenant.
The law does not make clear provisions on small expenses, which may become the focus of future disputes. Therefore, when signing a house lease contract, you can add special clauses such as “how much the lessee should pay for the small maintenance cost” to limit it.
If there is a housing problem, you should immediately take a picture of the problem and send it to the homeowner to notify them right away. If the tenant has to repair and pay the repair fee, he must first tell the owner before paying and continue to inform the owner of the progress of the repair. If you do not tell the homeowner, you will be deemed to have repaired it according to your wishes. Not only can you not ask the homeowner for repairs, but you may also be required to restore the original appearance at your own expense. Be sure to keep the bills after the repairs are completed to prevent disputes. During the contract period and within 6 months after the end of the contract, you can ask the landlord for repairs.
- Cleaning fee for checking out
When you check out, you need to pay a cleaning fee of 50,000 to 100,000 won. This will also be written on the contract, please check the amount and the method of payment carefully. Paying the check-out cleaning fee does not mean that you can not clean the room. If there are residual personal items in the room when you check out, the landlord will have the right to add more check-out cleaning fees.
The situation with pets is special. If the contract does not specify that pets are not allowed, or the tenant advises that they will be keeping pets, the check-out cleaning fee will be higher, and the cost of reposting the wallpaper will also require the tenant to pay. If it is stated in the housing contract that pets are not allowed, and a pet is brought into the apartment without asking permission, the landlord has the right to ask the tenant to check out.