Korea Lease Process Step 3: Official Contract & Down Payment
This is when the lease becomes officially executed—but not fully irreversible yet.
Once the contract is signed and the downpayment (계약금) is made, the lease terms are set. However, either party can still withdraw before the mid-term payment by accepting the legal consequences:
- The tenant forfeits the downpayment
- The landlord must return double the downpayment
This is a statutory right under Korean Civil Law—unlike a preliminary agreement (가계약), which are not governed by a specific statute and rely entirely on mutual terms set between both parties.
This often leads to confusion, as both involve money and cancellation—but only the official contract (본계약) rules are backed by law.
Because of this, it's essential to understand every term and verify every document before signing—even if you’re excited to secure the place.
Down Payment at Signing
When you sign the lease, you're usually required to pay 10% of the total security deposit as a downpayment (계약금).
If you’ve already paid a preliminary holding deposit (가계약금), it will be counted toward this amount.
Example:
Lease terms: ₩10,000,000 deposit / ₩800,000 monthly rent
Previously paid: ₩100,000 for the holding deposit
You’ll now pay: ₩900,000 for the balance of the downpayment at contract signing
Lease Document Pack
Your agent and the landlord’s agent will prepare two primary documents:
- Lease agreement (임대차계약서)
- Property condition report or rental unit explanation (중개대상물 확인·설명서)
Several supplementary documents are also commonly attached.
Must-Check Documents
To protect your deposit and tenancy, your agent should check these four crucial documents:
- Record of certified lease date issuance (확정일자 부여현황)
- Proof of national tax payment (국세 완납증명서)
- Proof of local tax payment (지방세 완납증명서)
- Record of registered residency at the property (전입세대 확인서)
These verify that the landlord doesn’t have unpaid taxes or existing tenants, both of which could compromise your lease priority.
Landlord Proxy Risks
If someone else is signing on the landlord’s behalf (e.g., a spouse, child, friend, or third party), they must provide:
- A power of attorney (위임장) signed by the landlord AND stamped by the landlord's registered seal (인감도장)
- A certificate of the registered seal (인감증명서)
- A copy of the official state ID card (or driver’s license/passport) of the landlord
If a proxy signs without proper documentation, the contract could be considered invalid, putting your tenancy and deposit at risk.
Take the Top Priority Position of Your Lease
Korea’s lease system is based on contractual claim rights (채권적 권리)—not real (estate) rights. This means tenants must actively protect their lease priority, especially in case of landlord default or property sale.
Check for Existing Senior Claims
Look for mortgages or liens (선순위 권리) already registered on the property:
- These creditors get paid before you if the property is seized or sold.
- If the landlord defaults, your deposit may be lost if you're not in a top-priority position.
Know the Risks in Multi-Unit Housing (다가구주택)
Most studio (원룸) rentals are in multi-family homes (extended single family home), where:
- Individual units don’t have their own property title
- You share legal priority with other tenants
Make sure:
- Your deposit is eligible for the legal top-priority repayment protection (최우선변제권)
- Your lease gets registered with a certified lease date (확정일자) immediately after signing
Tenants with a registered lease and small enough deposit may qualify for legal repayment guarantees, even in disputes or bankruptcies.
Realtor Tip
Register your lease to receive a certified lease date at the local Dong residents' center as soon as you sign it. Bring the original copy of the lease.
This protects your deposit legally in case of landlord default.
No registration = no priority.
Other Key Contract Terms to Review
Before signing, double-check:
- Contract duration & renewal options (covered in Step 5)
- Rent increase clauses
- Repair & maintenance responsibilities
- Conditions and costs for early termination
Final Thought: Step 3
Step 3 is where your lease truly begins—and where legal protection becomes real.
Confirm ownership, verify priority, and check for tax or lien issues before you sign.
A strong agent will walk you through these steps and ensure your lease stands on solid ground.