Strengthening Real Estate Agent Verification and Explanation Obligations to Prevent Jeonse Fraud

Notice of Legislative Proposal for Amendments to Subordinate Statutes of the Licensed Real Estate Agent Act

From now on, licensed real estate agents must explain to tenants the landlord's tax delinquency information and the information of prior-ranking tenants when mediating rental and lease contracts.

A view of a real estate agent's office in Songpa-gu, Seoul./Photo by Jinhyung Kang aymsdream@

The Ministry of Land, Infrastructure and Transport announced on the 7th that it will publicly notify a revision of the subordinate regulations of the "Licensed Real Estate Agents Act" to strengthen the obligation of licensed real estate agents to verify and explain the brokerage objects, in order to prevent jeonse fraud and promote transparency in management fees.

According to the revision, licensed real estate agents must, for safe transactions, provide the landlord's information (delinquency status, fixed date status), grant tenants the right to access information, explain tenant protection systems (priority repayment funds, jeonse deposit insurance, etc.), and prepare and sign a "Brokerage Object Verification and Explanation Document" to be delivered to the parties involved in the transaction.

In addition, for small housing such as one-room apartments and officetels, agents must also provide detailed explanations to tenants and other brokerage clients about the actual detailed items included in the management fees (general management fees, electricity charges, water charges, etc.).

Furthermore, agents must verify whether brokerage assistants comply with the obligation to disclose their identity as newly established under Article 18-4 of the Licensed Real Estate Agents Act, and inform the brokerage clients accordingly.

Won Hee-ryong, Minister of Land, Infrastructure and Transport, stated, “Since both the agent and the parties to the transaction are required to sign separately on the key confirmation items during lease contracts, it is expected to be effective in preventing brokerage accidents and disputes.”

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