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Real estate

lastmod 2025-07-19created 2016-11-1226 edits

Real property refers to land and property fixed to it, such as buildings or trees. Depending on the country, standing timber (South Korea, Japan) or railway foundations (Japan) may also become a single piece of real property under special laws.

The Civil Act of South Korea defines "land and things fixed thereto as immovables" (Article 99(1)), and "things other than immovables are movables" (Article 99(2)). Beyond this, various laws provide that land and its fixtures, which count as real property, include land; buildings, which are immovables independent of the land; trees that form a group attached to land (standing timber) and have completed standing timber registration; trees with a method of public notice; natural fruits such as fruit not yet separated from trees; and crops cultivated or grown on land and not yet separated from it.

For a building to count as independent real property, it only needs at minimum pillars, a roof, and main walls.

The Civil Code of Japan gives the same definition as the Civil Act of South Korea, but provides that because real property is not easily moved and is high-value property, it is subject to different regulation from movables (Article 177). In addition, under special laws, factory foundations, mining foundations, fishery foundations, tourist facility foundations, port transport business foundations, road transport business foundations, motor vehicle transport business foundations, railway foundations, tramway foundations, and the like are also recognized as real property through registration.

Category

Differences between exclusive area vs supply area vs contract area

Md2biz-tistory-real_estate-area.png

Exclusive area
First, let's look at the exclusive area. In multi-family housing such as apartments, it is the area that includes all the rooms, living room, kitchen, bathrooms, and so on, i.e., the floor area excluding the common areas. In other words, it means the family's private living space you enter through the front door. However, balconies are excluded from the exclusive area; balconies are explained again below.
Common area
Common area means spaces used jointly by many people, and it is broadly divided into 2 types: residential common area and other common area. Residential common area means the stairs, hallways, elevators, etc. outside the front door, while other common area means basement floors, the management office, the senior center, residents' community facilities, etc.
Supply area and contract area
Supply area = Exclusive area + Residential common area
Contract area = Supply area + Other common area
Supply area and contract area have the meanings above. You can understand them simply as sums.
Service area
Balconies are separate spaces not included in the parts mentioned above. This is called the service area. As the name says, think of it as a kind of service provided to residents. Recently, balconies can be extended to enlarge the living room or rooms and increase the usable space, so many people check this service area when buying a pre-sale apartment or signing a contract. Even with the same exclusive area, extending the balcony can make the usable space larger.
Sale area
The term sale area also shows up from time to time. It usually means the supply area, but for officetels it is said to be a little different, so I summarized it.
{|class="wikitable"

! Type || Sale area || Governing law |- | Apartment || Supply area || Housing Act |- | Officetel || Contract area || Building Act |}

Real estate brokerage fee rate table (Seoul Metropolitan City)

Housing

Transaction type

Transaction amount

Maximum rate

Cap amount

Brokerage fee
rate determination

Transaction amount calculation

Sale/exchange

⊙ Under 50 million won

6/1,000

250,000 won

⊙ Brokerage fee limit = transaction amount × maximum rate
(however, the calculated amount cannot exceed the cap amount)

⊙ Sale: sale price
⊙ Exchange: the price of the brokered property
with the higher price among the exchanged properties

⊙ 50 million won or more ~ under 200 million won

5/1,000

800,000 won

⊙ 200 million won or more ~ under 600 million won

4/1,000

None

⊙ 600 million won or more ~ under 900 million won

5/1,000

None

⊙ 900 million won or more

( )/1,000 or less of the transaction amount

⊙ Determined by agreement between the client and the licensed real estate agent, at or below the maximum rate shown on the left, which the licensed real estate agent sets within a maximum rate of 9/1,000.

Lease, etc. (transactions other than sale/exchange)

⊙ Under 50 million won

5/1,000

200,000 won

⊙ Brokerage fee limit = transaction amount × maximum rate
(however, the calculated amount cannot exceed the cap amount)

⊙ Jeonse: jeonse deposit
⊙ Monthly rent: deposit + (monthly rent × 100).
However, if the calculated amount is under 50 million won: deposit + (monthly rent × 70)

⊙ 50 million won or more ~ under 100 million won

4/1,000

300,000 won

⊙ 100 million won or more ~ under 300 million won

3/1,000

None

⊙ 300 million won or more ~ under 600 million won

4/1,000

None

⊙ 600 million won or more

( )/1,000 or less of the transaction amount

⊙ Determined by agreement between the client and the licensed real estate agent, at or below the maximum rate shown on the left, which the licensed real estate agent sets within a maximum rate of 8/1,000.

※ Transaction amount for a pre-sale right: [amount paid up to the time of the transaction (including loans) + premium] × maximum rate

Officetel

Enforcement Rule of the Licensed Real Estate Agents Act, Article 20(4) (promulgated and effective Jan. 6, 2015)

  • 1. Officetels under Annex 1, item 14(b)2) of the Enforcement Decree of the Building Act (limited to those meeting all of the following requirements): the fee is received from each of both clients, and the brokerage fee is determined within the rate range of Annex 3.
  • a. The exclusive area is 85 square meters or less
  • b. It has a private standing kitchen with water supply and sewage facilities, a private flush toilet, and bathing facilities (including the case where the private flush toilet has bathing facilities)

[Annex 3] Officetel brokerage fee rates (related to Article 20(4))

Type

Maximum rate

Sale/exchange

5/1,000

Lease, etc.

4/1,000

  • 2. Cases other than item 1: the fee is received from each of both clients, and is determined by mutual agreement between the client and the licensed real estate agent within 9/1,000 of the transaction amount.

Non-residential (land, commercial buildings, etc.)

Transaction type

Maximum rate

Brokerage fee rate determination

Transaction amount calculation

Sale/exchange, lease, etc.

Within ( )/1,000 of the transaction amount

⊙ Determined by agreement between the client and the licensed real estate agent, at or below the maximum rate shown on the left, which the broker sets within a maximum rate of 9/1,000.

Same as "Housing"

  • Brokerage fee limit = transaction amount × maximum rate (however, the calculated amount cannot exceed the cap amount)
  • For "housing sale/exchange of 900 million won or more", "housing lease of 600 million won or more", and "sale/exchange/lease of brokered properties other than housing", the licensed real estate agent must state in the table above the maximum rate they actually intend to charge, within the range of the maximum rate set by law for each.
  • The above real estate brokerage fees are set by the Licensed Real Estate Agents Act and the Seoul Metropolitan Government ordinance on housing brokerage fees, etc.

Sale contract process

Checking the registry and the property

Check the Korean: 등기사항전부증명서.

Partial down payment contract (provisional contract)

Even if done by text message or KakaoTalk, it is a formal contract. The following requirements must be met.

Four requirements for a formal, valid, and lawful "partial down payment contract":

  • Property location stated
  • Contract terms
  • Parties to the transaction
  • Terms for contract termination

Writing the contract (main contract, interim payment)

For reference, the brokerage fee for a 600 million won property is 0.4% (= 2.4 million won)

Checking special terms

If you take out a loan

Submit the contract for the loan review, etc., and make sure there are no surprises.

Paying the balance

  • Before the balance date, appoint a judicial scrivener for the transfer (if unsure, ask the brokerage agency)
  • There is a lot to do, so it is best to pay the balance in the "morning".
  • Just hand the ownership transfer documents you were told about in advance to the judicial scrivener.
  • The buyer pays the remaining amount, minus the loan, to the seller in full
  • Repayment of the existing mortgage, cancellation of the mortgage, transfer of ownership, and creation of a new mortgage all happen simultaneously on the same day.
  • On the day, you can receive the receipt for the ownership transfer application.
    • After about a week, you can also receive the certificate of title by mail.

Right after the balance payment is complete

The real estate agency settles the utility bills and management fees, and you receive the card keys and move-in items.

Real Estate Transaction Electronic Contract System

Real estate transaction contract report certificate

Should you file a move-in report before the balance date?

This civil service applies when all or some members of a household move their residence: the person obliged to report must report the move-in to the authority with jurisdiction over the new residence, for the change and registration of address, within 14 days of moving in. (Overseas Korean nationals must apply in person at the eup/myeon/dong office, since their status as overseas nationals must be verified. For inquiries about filing and processing, please contact the relevant eup/myeon/dong office.)

Long-term repair reserve

See Long-term repair reserve. When living in a jeonse home, if there is a "long-term repair reserve" item, you can later claim it from the landlord.

When should you apply for a fixed date?

Once the contract is written, go right away.

Favorite site

References

  1. How_to_Avoid_Real_Estate_Scams.pdf ↩

author Zer0 sitemap