Obligations of Real Estate Agents
Duty of good faith and loyalty and obligations to keep information confidential
Explanation obligations
Obligations to issue and preserve the confirmation and the explanation of the object of the transaction
Obligations to issue a certificate of mutual aid
Damage Compensation Liability of Real Estate Agents
Damage compensation liability of real estate agents
- A realtor, who inflicts a property damage upon clients by intention or negligence while in service, is liable for the damage (Article 30(1) of the Licensed Real Estate Agents Act).
Realtor Fees and Actual Expenses
Realtor fees and reimbursement claim for actual expenses
- clients shall pay a fixed realtor fee except in the case where the transaction between the clients is invalidated or cancelled by the realtor's intention or negligence (Article 32 (1) of the Licensed Real Estate Agents Act).
· The term "realtor fee" means the commission that clients pay to a realtor upon the conclusion of a real estate contract. The maximum amount of a realtor fee, which depends on a transaction price, and the payment schedule thereof are prescribed by the ordinance of the logal government (Article 32(3) and (4) of the Licensed Real Estate Agents Act).
- A realtor may request the clients to pay reimbursment for actual expenses incurred in confirming the legal relationship over the object of the transaction or giving the repayment guarantee of the deposit, etc. (Article 32(2) of the Licensed Real Estate Agents Act).
※ Please visit the website of the Korea Association of Realtors (www.kar.or.kr) to obtain information on the realtor fee rates by Si/Do.
Maximum amount of realtor fees and actual expenses
- Realtor fees for a housing transaction (also applicable to a transaction of a building whose 1/2 or more areas are for a residential purpose) are limited to maximum 0.8% of the total transaction price (Article 20(1) and (6) of the Enforcement Rule of the Licensed Real Estate Agents Act).
- The actual expenses are defined by the expenses incurred in confirming the legal relationship over the object of the transaction or giving the repayment guarantee of a deposit, etc. A realtor may receive reimbursement for such actual expenses from clients who sells or leases his/her real estate, or transfer rights thereover (Article 20(2) of the Enforcement Regulations of the Licensed Real Estate Agents Act).
Non-collection of a realtor fee and actual expenses exceeding the limit
- A realtor shall not receive money or othe valuables in the form of a reward, donation, etc., other than collecting the fixed amount of realtor fees and actual expenses. A realtor who fails to comply with the above will be punished by an administrative fine, ordered to suspend business or punished by imprisonment with labor for not more than 1 year or by a fine not exceeding 10 million won (Subparagraph 3 of Article 33 and subparagraph 10 of Article 49(1) of the Licensed Real Estate Agents Act).