Dobong District Urges Caution in 'Geunsaeng Villa' Transactions... Advises Careful Review When Trading
Dobong District in Seoul (Mayor Oh Unseok) has launched a campaign to raise awareness and prevent damages related to so-called 'Geunsaeng Villa' properties.
'Geunsaeng Villa' refers to illegal buildings where the official purpose registered in the building ledger is for neighborhood living facilities (commercial use), but the interiors have been converted for residential use and are traded as such. If purchased, buyers may be subject to administrative measures such as penalty surcharges. If rented, tenants may face restrictions on obtaining jeonse loans and will not be able to enroll in jeonse deposit guarantee insurance, which can lead to losses if the deposit is not returned.
The district office is posting cautions regarding transactions on its official website and other outlets, and is informing licensed real estate agents of their obligation to present the building ledger. Due to amendments to the Licensed Real Estate Agents Act, as of contracts signed since the 15th of last month, licensed real estate agents are now required to present the building ledger when handling sales or lease contracts.
The Dobong District branch of the Korea Association of Realtors has recommended that the following be included as a special clause in contracts: "This building is a neighborhood living facility, not a residential property. If violations are discovered, restoration to original use and a penalty surcharge (for sales), and restrictions on jeonse loans and inability to enroll in guarantee insurance (for leases) will apply."
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Oh Unseok, Mayor of Dobong District, stated, "Although Geunsaeng Villa properties are cheaper than typical villas, the legal and financial responsibilities ultimately fall on the buyer or tenant. Therefore, it is essential to check the building ledger and review all special contract clauses carefully before signing any agreement."
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