Korea Association of Realtors "Will Establish Win-Win Plan with PropTech Industry"

On the 26th, Lee Jong-hyuk, president of the Korea Association of Certified Realtors, is speaking at a press conference held at the association's headquarters in Gwanak-gu, Seoul, to announce a position for coexistence with proptech companies. (Photo by Ryu Tae-min)

[Asia Economy Reporter Ryu Tae-min] Amid ongoing conflicts between the proptech industry and the Korea Association of Realtors (KAR) over the proposed amendment to the Licensed Real Estate Agents Act, which includes the legal establishment of the association, the KAR has reiterated its commitment to coexistence and cooperation with platform companies.

On the morning of the 26th, the KAR held a press briefing at its central office in Bongcheon-dong, Gwanak-gu, Seoul, under the theme "Stabilizing the Real Estate Market through Coexistence and Cooperation with Proptech Companies." The association explained the purpose and details of the proposed amendment to the Licensed Real Estate Agents Act. Lee Jong-hyuk, president of the KAR, stated, "The push for legal establishment aims to prevent market disruption and protect the public from resulting damages," adding, "It is not intended to hinder the business activities of proptech companies or brokerage platforms." He further emphasized, "The realtor association and platform companies should be partners in coexistence and cooperation."

The partial amendment to the Licensed Real Estate Agents Act, proposed on the 4th by 24 lawmakers including Kim Byung-wook of the Democratic Party, recognizes the Korea Association of Realtors as a legal entity and mandates membership for licensed real estate agents. In response to intensified opposition from proptech companies such as Zigbang and Dabang, the association provided clarifications.

According to the bill, the association would establish ethical regulations within its organization and have the authority to guide and supervise its members to maintain order in real estate transactions. Additionally, the association would have the power to crack down on activities disrupting transaction order, and if members violate the law, the association could request administrative sanctions from city/provincial governors and registration authorities.

The proptech industry has voiced strong opposition, fearing that designating a specific interest group as a legal entity could lead to a monopoly over brokerage services. The Korea Proptech Forum held an emergency meeting the day before, stating, "Monopolization by a specific interest group could undermine the foundation of a fair economy, stifle the emerging proptech industry, and cause adverse effects such as infringement on consumer benefits." They announced plans for a joint response regarding the amendment to the Licensed Real Estate Agents Act.

Furthermore, during the briefing, Lee Jong-hyuk, president of the KAR, said, "As brokerage work becomes increasingly complex, legal establishment is necessary to prevent illegal brokerage and market disruptions such as lease fraud," and added, "We will strengthen guidance and management functions by mandating licensed real estate agents to join the association."

The KAR pledged that if it becomes a legal entity, it will protect public assets, provide high-quality brokerage services, enhance the professionalism of licensed real estate agents, and promote ethical awareness. Specifically, it plans to increase compensation for damages up to 1 billion KRW to protect public assets. Currently, the association pays up to 100 million KRW in compensation for property damage caused by broker negligence. However, with rapid real estate price increases, there have been continuous calls to proportionally raise the compensation amount.

The association also plans to expand free brokerage services and public consultation offices. It intends to broaden the "free brokerage services" currently offered to socially and economically disadvantaged groups and introduce a U.S.-style exclusive brokerage contract system to provide free brokerage services to tenants and buyers. Additionally, it plans to expand the free consultation offices currently operated by the central association and 19 city/provincial branches nationwide, staffing them with experts from various fields including licensed real estate agents, lawyers, tax accountants, architects, and financial specialists.

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