How to Read a Rental Contract
Trip Start Aug 16, 2013
392Trip End Aug 25, 2013
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1. Address, Construction, Zoning, Total Building Size, Unit Size, Unit Number
2. CONTRACT TERMS
보증금 First Deposit (500,000w)
잔금 Deposit Balance and payable date (1,500,000 Aug 25, 12)
월세 Monthly Rent and day of payment (480,000w on the 25th each month)
2.2. Contract Term Dates
2.3. No changes allowed or sublets
2.4. If rent in arrears for more than two months landlord can cancel contract
2.5. Unit to be returned in same condition or damages will be deducted from Deposit
2.6. If owner changes mind after first deposit they must repay two times the initial deposit
If tenant changes mind after first deposit then they forfeit deposit
2.7. If either party lied then contract can be voided. If either party damages they pay repairs
If tenant breaks contract mid term then must pay compensation.
If no specified amount given then amount of initial contract deposit applies
2.8. Real Estate Agent not liable for unfulfilled contracts
2.9. Agent will disclose owners financial status and mortgage on date specified
1. Contract is 'as is'. Owner will provide fridge, washing machine, AC, gas range, internet
2. 480,000w rent includes any monthly management fee
3. Rent is prepaid in advance at the start of each monthly period
Bank and Account Number to pay rent
Account Holder Name
To certify this contract both parties sign
Owners ID Number
Owners Cell Number
Name of Agent
Agents Certificate of Insurance
Limit of Liability
Certificate Issue Date
1. Construction and Zoning details (total bldg, unit size, yr construction)
Amount financed against land
Amount financed against building
Lump sum deposit paid by tenant (160,000,000 so he does not pay monthly rent)
3. Future Zoning Plans
4. Neighbourhood Info
(bus, subway, parking, school, medical, shopping)
5. Security Office - none
6. Any local nuisances - none
7. Tenants Deposit and Monthly Rent
8. Property Taxes
9. Rights of Building Ownership
10. Underwriting Details
(faucet, pressure, supply, electricity, gas, fire extinguishers, heating, elevator, mains supply)
11. Wall Condition
Any leaks or cracks, wallpaper
12. Sunlight and Noise
13. Agents Fee (Deposit + (Rent X 100) x 0.4%
The only major difference in the contract with back home is 2.6. If the owner cancels before the contract start date they must pay back double the initial deposit that was given. I dont know if this also applies if she cancels on me midterm.
Item 2.9. mentions receiving the owners financial documents. I was not given these and had to specifically ask, and get my friend to help translate them again.
Only then did I become aware of clause 13 with is the Agents Fee and is payable by BOTH parties, unlike back home where only the owner pays. In the four visits I had made to the agents office to discuss all items never was that disclosed to me as an additional cost.
When I confronted them on it they didnt actually realize and thought everyone knew this was normal since there was also a certificate posted on their wall with rates. Since I am a foreigner they should have realized I didnt know and point this out as an additional cost.
However, my situation didnt turn out so bad. Rather than giving me the 400,000w housing allowance, the school is making their own contract directly with the landlord and paying it straight to her. I only pay the excess of 80,000w on my own contract. So between the two contracts the school pays 150,000w Agents Fee on their contract, and I only pay 50,000w Agents Fee for my contract.
The Agents Fee is a percentage of your key money/deposit so its to your advantage to negotiate a lower deposit, although most landlords prefer 5,000,000.
I can break this contract anytime, walk out, and just lose my first deposit of 500,000. Unlike back home where I must give 60 days notice or in some cases can not break a lease in its first year.
She can cancel on me midterm anytime and I get 500,000w the first deposit as compensation. There is no specified number of days notice, although people keep telling me this is very rare in Korea
Also if you want to live rent free the other tenant has given a lump deposit of 160,000,000 ($145,000) so does not pay any monthly rent. I'm not sure what happens to this money while the owner has it, if they can use it for risky investments, or tie it up in non liquid ventures. You can have it registered and if the owner defaults on returning it you get title ownership of the unit.
The final factor to consider is that landlords are not obligated to provide you with a fridge or stove. Just because you see them, a washing machine, or an AC unit, does not mean you get them. They may belong to the tenant and they may be taking them with them.
I checked prices at Homeplus. A two ring table top gas range starts from 50,000w ($45), a basic washing machine 300,000w ($275), and a compact fridge 379,000w ($350). If you own your own and the new apartment also provides them that can create problems too. So its important to clarify what comes with the apartment and what you will have to provide.
See previous entry 'Apartment Searching in Korea'