Licensed Real Estate Agents Now Required to Explain Shared Maintenance Fees to Tenants... Enforcement Rules Effective from the 28th

Shared Maintenance Fees Added to Agent Disclosure Checklist
Fee Negotiation for Residential Officetel Brokerage Clarified
Korea Association of Realtors to Establish Operational Rules

From now on, licensed real estate agents will be required to explain not only the total amount of existing maintenance fees but also shared maintenance fees when brokering properties. Additionally, for residential officetels, which previously had only an upper-limit brokerage fee specified, it will now be explicitly stipulated that the fee can be negotiated.

On August 11, the Ministry of Land, Infrastructure and Transport announced that the Enforcement Rules of the Licensed Real Estate Agents Act, partially revised and promulgated on the same day following the decision at the cabinet meeting, will come into effect as of August 28.

This amendment was prepared to set rules necessary for the operation of the association after the Licensed Real Estate Agents Act, which grants legal status to the association, was revised in February. According to the revised enforcement decree and rules, the Korea Association of Realtors will transition from a voluntary organization to a statutory organization and will be required to systematically revise its current articles of association. In addition, the ethics code regarding the professional ethics that members must adhere to will need to be established with the approval of the Minister of Land, Infrastructure and Transport. The revised sub-laws will also reflect the legal name "Korea Association of Realtors" and set forth rules necessary for the overall operation of the association, including organizational management and board composition.

Shared maintenance fees will be added to the checklist that licensed real estate agents must review and explain to clients. In the past, it was difficult for tenants of small-scale housing to obtain information on maintenance fees due to the absence of a dedicated management entity. Moreover, costs for common areas, aside from maintenance based on each household's usage, were managed opaquely. As a result, issues arose where landlords would excessively raise maintenance fees as a means of circumventing rent control.

Under the amendment, licensed agents are now required to check and explain the "amount of shared maintenance fees" in addition to the total existing maintenance fees. This will enable prospective tenants of small-scale housing, such as studio apartments and officetels, to know in advance the level of maintenance fees charged for communal areas before signing a contract.

The amendment also explicitly states how brokerage fees should be determined for residential officetels. While brokerage fees for both residential and non-residential properties are to be set in consultation between the agent and the client within an upper limit, confusion had arisen because for residential officetels, only the upper limit was specified, with no mention of fee negotiation. The new provisions will clarify that brokerage fees for residential officetels are also to be decided through mutual agreement.

Shin Yoongeun, Director of the Land Policy Bureau at the Ministry of Land, Infrastructure and Transport, stated, "Now that the Korea Association of Realtors has statutory status, we expect it to grow into an organization that earns public trust by enhancing the competence and ethical standards of real estate agents. This amendment of the sub-laws under the Licensed Real Estate Agents Act is expected to enhance consumer convenience by providing advance information about maintenance fees during the housing lease contract process."

This content was produced with the assistance of AI translation services.