Types of Housing Contracts in Korea

In order to work in Korea, finding a place to stay is a cruicial first step.

There are two main types of housing contracts in Korea; the Jeonse and Wolse.

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Wolse (Monthly Payment + Deposit)

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Wolse requires the renter to deposit a fixed sum to the landlord after which monthly rent is to be paid on a specified date each month.

• The amount of the security deposit for wolse is lower than that for jeonse. The amounts of the security deposit and monthly rent are negotiable.
• The deposit sum can be increased in order to lower the monthly rental charge.
• The lessee should pay monthly utility charges (electricity, water, gas, phone, Internet, and TV reception).

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Jeonse (Key Money Deposit)

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Jeonse, or the key money deposit, is a housing rental system specific to Korea.

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• Instead of paying monthly rent to a landlord, a large lump sum payment is deposited into the landlord's bank account for the duration of the contract.
• By law, Jeonse contracts are signed for two years. At the end of the contract, the deposited amount is returned to the renter.
• Some landlords prefer this method because they can collect interest from the amount deposited in the bank. Another reason why some landlords may prefer the Jeonse method is simply because they have purchased the property with Jeonse contracts themselves.
• Some may not like the key money deposit method since depositing a large sum of money comes with risks, not to mention the difficulty of trying to come up with a large sum of money all at once. However, this method is the most advantageous for tenants since the full deposited sum is returned at the end of the contract.
• When looking to rent on a key money deposit method, the first step you must take is to check that there are no unpaid loans. It is imperative that you check the building's register before you sign.

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