Assemblyman Kim Seung-nam Proposes Amendment to the Licensed Real Estate Agents Act to Strengthen Client Rights in Real Estate Transactions
A Total of 656 Real Estate Brokerage Accidents in the Past 3 Years, with Compensation Amounting to Approximately 27 Billion KRW
Mandatory to Display Actual Coverage Amount on Insurance Certificates and Notify Before Real Estate Contracts
[Asia Economy Honam Reporting Headquarters Reporter Lee Hyung-kwon] Kim Seung-nam, a member of the National Assembly (Jeonnam Goheung·Boseong·Jangheung·Gangjin), announced on the 13th that he has introduced the "Certified Real Estate Agent Act Partial Amendment Bill" to strengthen the rights of real estate brokerage clients.
The current Certified Real Estate Agent Act requires subscription to guarantee insurance or mutual aid, or deposit of a bond, to prepare for cases where intentional or negligent acts cause property damage to brokerage clients.
According to the Korea Association of Certified Real Estate Agents, there were a total of 656 real estate brokerage accidents and approximately 27 billion KRW in compensation over the past three years (’18?’20).
The amount of damage not compensated due to exceeding the guarantee insurance or mutual aid/bond guarantee limits is difficult to even estimate.
This is because the guarantee insurance or mutual aid/bond guarantee amount is limited to 100 million KRW for individual licensed real estate agents and 200 million KRW for corporate licensed real estate agents, regardless of the number of transactions or contract holders.
If a licensed real estate agent exceeds the compensation limit due to a brokerage accident, there is a serious institutional loophole where subsequent brokerage clients who entrusted the brokerage relying on the guarantee insurance cannot receive proper compensation.
Accordingly, the amendment requires licensed real estate agents to provide an explanation of compensation for damages to brokerage clients along with a copy of the mutual aid certificate containing the actual guarantee amount and damage guarantee details before the real estate contract.
Currently, such procedures are conducted after the real estate contract.
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Assemblyman Kim Seung-nam said, "Instead of the formal guarantee amount (total amount per year) on the mutual aid certificate, we intend to notify brokerage clients in advance of the actual guarantee amount (the remaining amount of the total guarantee) before the real estate contract," adding, "This will guarantee the right to know for ordinary citizens and tenants and reduce damages that may occur during real estate transactions."
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