After Lawyers, Now Platforms... Ongoing Disputes Over Business Domains in Real Estate Brokerage

Broker Association: "Use of 'Lifestyle Realtor' Title Is Illegal"
HomeSquare: "Recruitment Advertising and Outsourcing... Not a Violation of Current Law"

A cluster of real estate agencies concentrated in a commercial building in Seoul [Image source=Yonhap News]

[Asia Economy, reporter Noh Kyungjo] The conflict over business domains between licensed real estate agents and brokerage platforms is expected to intensify. This is because the Korea Association of Realtors has announced its intention to file a complaint against the real estate brokerage platform "HomeSquare." The situation is similar to the ongoing confrontation between the legal profession and the legal platform "LawTalk."

According to industry sources on September 2, the Association's Policy Research Committee (hereafter, the Committee) decided on August 30 to file a complaint against HomeSquare, claiming that its use of a similar designation, "Saenghwal Gongin Junggaesa" (literally, "lifestyle realtor"), is causing confusion in the real estate brokerage distribution market.

HomeSquare currently offers property search and listing services under the banner of "half-price brokerage, half-price registration." It is also recruiting its first group of "lifestyle realtors." The company describes lifestyle realtors as a type of freelancer who, without opening their own business, performs some tasks as a licensed agent or agent assistant and receives a commission.

Their main task is specified as "introducing properties within apartment complexes," which anyone can do, regardless of whether they are a licensed agent. Through job training, they work as agent assistants. Of course, those with a realtor license are given preference.

In this regard, the Committee recently emphasized that agent assistants impersonating licensed realtors and engaging in illegal brokerage activities have led to violations of citizens' property rights and defamation of licensed realtors. The Committee plans to establish a foundation for swift policy development, including amending the Licensed Realtor Act, by appealing to the government and National Assembly to eradicate such practices. The Committee has also filed a complaint against Mr. Park, an agent assistant who impersonated a licensed realtor on various TV entertainment programs, for violating the Licensed Realtor Act.

An Association official stated, "There are about 500,000 licensed realtors nationwide, but only about 120,000 are actually operating their own businesses. It seems that the introduction of the freelancer concept is targeting the remaining 380,000." The official continued, "The problem lies in employing people without licenses under the similar title of 'lifestyle realtor,' failing to register the business with the relevant authorities, and not complying with current laws."

Article 8 of the Licensed Realtor Act stipulates that individuals who are not licensed realtors may not use the title of licensed realtor or any similar designation. Article 9 prohibits brokerage activities unless the business is registered with the relevant city, county, or district authorities.

In response, HomeSquare stated that while it did not anticipate the Association's complaint, it plans to respond appropriately, as there are no illegal or unlawful activities involved.

A HomeSquare representative said, "HomeSquare outsources and delegates the recruitment of lifestyle realtors and agent assistants. The Association's claim of a legal violation pertains to the work of licensed realtors, which is unrelated to our company's recruitment advertising and outsourcing operations." The representative added, "If using a similar title to 'licensed realtor' is not permitted in advertising, then all businesses that operate licensing exam academies or provide career information would also have to be considered illegal." As of September 1, around 200 people had reportedly applied to become lifestyle realtors.

The Association's response to HomeSquare is seen as a business domain dispute. This is not the first conflict surrounding the real estate brokerage industry. A representative case was the legal dispute in 2016 with "Trust," a brokerage site operated by a lawyer. At the time, Trust's CEO, lawyer Gong Seungbae, announced his intention to run a brokerage business without a realtor license, offering a flat fee of 990,000 won for apartment transactions.

Licensed realtors protested and took legal action against CEO Gong. The dispute ended in 2019 when the High Court imposed a fine on Gong. Afterwards, Gong established a corporation and continued the business by hiring licensed realtors. Some have commented that this was merely "noise marketing."

As the proptech industry, which combines property and technology, continues to grow, disputes over business domains in the real estate brokerage sector are expected to persist. In May, the Ministry of Land, Infrastructure and Transport launched the "Real Estate Service Council," with participation from related industries, research institutes, and academia, to seek ways for mutual growth.

This content was produced with the assistance of AI translation services.