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Signing the Lease

Korea Lease Process Step 2: Preliminary Agreement & Holding Deposit

In many desirable areas of Seoul, landlords won’t wait around while you think things over. If you like a place and want to secure it, your agent may suggest a preliminary agreement—commonly called 가계약 (ga-gyeyak)—before the official lease is signed.

Let’s break down what this means, the risks involved, and how to protect yourself.

What Is a Preliminary Agreement (가계약)?

A preliminary agreement is an informal agreement to hold the property before signing the full lease. It's usually done through verbal confirmation or written messages via KakaoTalk, along with a small deposit.

How it works:

  • You verbally agree to rent the unit at a set price, lease period, and move-in date.
  • You send a holding deposit (가계약금) to the landlord—typically via bank transfer.
  • The agent arranges a contract signing appointment.
  • Once the official lease is signed, this holding deposit is applied toward the total security deposit. So, it’s not an extra fee—it becomes part of your downpayment (계약금).

This practice is common in competitive areas like Gangnam, Mapo, Yongsan, Seongsu, Dongdaemun, or near major universities.

How Much Do You Pay?

There’s no fixed law on the amount.

You may be asked to pay:

  • ₩100,000 to ₩500,000 for lower-value leases
  • Or 5–10% of the total security deposit for higher-end rentals

Always confirm:

  • Where the money is going (usually directly to the landlord’s account)
  • What it’s for (holding the unit—not yet a binding lease)
  • Whether it’s refundable (more on this below)

Risks of Preliminary Agreement

This step is not legally required, but once money is exchanged, things get sticky.

The full lease contract is not legally binding at this stage,
but the preliminary agreement is—because payment has been made.

If you cancel, you may:

  • Lose the holding deposit completely.

If the landlord cancels, they must:

  • Return double your deposit under Korean contract law.
    You get your original payment back plus compensation for the wasted time and effort.

Important note:

There’s no legal guideline on refund-ability—it depends on your verbal or written agreement. That’s why it’s crucial for your agent to clearly confirm terms upfront.

Many agents don’t explain this clearly, and most landlords won’t offer double compensation unless pushed.

Essential Checks Before You Pay

Your real estate agent should handle these checks—but many skip them. You’ll want to make sure they cover:

Ask your agent to check the property title registry (등기부등본) to verify:

  • The landlord is the actual owner.
  • The unit isn’t under someone else’s name (like a parent, ex, or business partner).

Clarify Refund-ability:

Make sure your agent clearly explains:

  • Under what conditions the deposit is refundable
  • What happens if either party backs out

Realtor Tip

If possible, skip the preliminary agreement stage and go straight to the official lease.

This minimizes legal ambiguity and protects your money.

If a preliminary agreement is unavoidable:

  • Minimize the payment amount
  • Get written confirmation (even a screenshot of a KakaoTalk message with both parties agreeing helps)

Final Thought: Step 2

가계약 can help you secure a great unit—but only if handled properly.

Understand what you’re committing to. Confirm ownership.
And never send money without basic verification.

A competent agent won’t rush this step—they’ll walk you through it with proper checks and clear communication.