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Signing the Lease

Korea Lease Process Step 4: Mid-Term Payment

The mid-term payment is a turning point.
Once it’s made, backing out is no longer simple—and canceling the deal after this stage comes with major legal and financial consequences.

What Is the Mid-Term Payment?

The mid-term payment (중도금) is an additional portion of the deposit—typically about 40% of the total—paid between:

  • The official contract signing with the downpayment, and
  • The move-in with the final payment

It’s standard in Korean leases, including the monthly rent (월세) lease type.

When Does It Happen?

Usually a few days to a week before the move-in date, but timing can vary based on the agreement.

Make sure the payment date and amount are written clearly in the contract to avoid confusion or disputes.

Why It Matters

Once you pay the mid-term amount, the lease becomes fully locked in.
Canceling the deal after this point is no longer a matter of just forfeiting or doubling the downpayment.

You're now entering legal territory that can involve:

  • Contractual disputes
  • Penalties
  • And, in worst cases, lawsuits

From a legal standpoint, this payment marks the beginning of performance obligations (이행착수) between both parties. That’s why this step carries so much weight—and why you must be fully committed before proceeding.

Before vs After the Mid-Term Payment

Before 중도금:

Under Korean Civil Law, both parties can cancel by giving up the amount of downpayment:

  • If the tenant cancels, they forfeit the down payment.
  • If the landlord cancels, they must return double the down payment.

After 중도금:

There’s no statutory “easy out” after this point.
Canceling requires legal grounds or mutual agreement.

Rescission by Mutual Agreement (합의해제)

  • Both parties agree to cancel voluntarily.
  • All payments made (downpayment + mid-term payment) are returned.
  • Typically, the canceling party offers a settlement fee to cover the other side’s time, cost, and opportunity loss.

Rescission by Pre-Agreed Clause (약정해제)

You can insert a pre-negotiated cancellation clause in the lease at the time of signing.

Example clause:

“Either party may cancel the lease prior to closing by paying ₩XXX as cancellation fee.”

This is one of the best ways to avoid disputes—plan ahead when drafting the lease.

Statutory Rescission (법정해제)

Under Korean Civil Law, a party can unilaterally cancel if the other party:

  • Fails to perform the obligations (이행지체)
  • Cannot perform the obligations (이행불능)
  • Performs the obligations incompletely (불완전한 이행)
  • Refuses to accept the subject of the contract (채권자의 목적물 수령지체, e.g., rental unit)

However, this is only valid if you’ve already fulfilled your part.

Example: You paid final payment (잔금), but the landlord fails to deliver the property.
You can then sue to cancel and reclaim all amounts paid (downpayment + mid-term payment + final payment) and potentially claim additional damages.

If you haven’t paid the final payment yet, you're not in a legal position to trigger this kind of rescission.

Realtor Tip

Before paying the mid-term payment, double-check everything:

  • Final lease terms
  • Unit readiness
  • Landlord’s status
  • Your own situation

If there’s any chance you might need to cancel later, insert a pre-agreed cancellation clause (약정해제 조항) in the lease.
It’s the cleanest way to avoid future headaches.

Final Thought: Step 4

The mid-term payment marks the point of no return in the Korean lease process.

Know what you're committing to. If you back out after this, you’re stepping into legal waters—so check every detail, and lock in any escape clauses before you send the money.