It's not uncommon for a real estate agent to charge a commission exceeding the statutory rate, or to charge both the landlord and tenant separately for the same transaction, and foreign parties are often affected by this. The bottom line: any commission charged above the statutory cap is invalid for the excess amount, and even if it has already been paid, it can be reclaimed as unjust enrichment. Foreign transaction parties are often unaware of Korea's commission rate structure altogether and tend to simply pay whatever amount the real estate agent states, which is the main source of this kind of dispute.
How is the broker commission rate set?
For housing transactions, commission caps are set by local government ordinance based on brackets of the transaction amount, and any agreement exceeding that cap is invalid for the portion above the cap. In other words, even if a tenant separately agreed to a higher fee with the real estate agent, there is no obligation to pay the amount exceeding the statutory ceiling in the first place. Because the cap rate decreases as the transaction bracket rises, it's especially important to check the official rate table for high-value officetel or large-unit contracts.
How can you check whether you were overcharged?
Because the commission cap differs by transaction amount and type (sale, jeonse, or monthly rent), the transaction amount stated in the contract should be compared against the rate table published by the relevant local government, against what was actually paid. For monthly rent contracts, there is a separate formula for converting the deposit and monthly rent into an equivalent transaction amount, so simply using the monthly rent figure alone can produce an inaccurate result — the correct conversion method should be checked. If the conversion method is confusing, contacting the local government's real estate information division or district office to confirm the exact cap amount is also a good option.
What procedure can be used to recover the excess?
The first step is notifying the real estate agent of the overpayment and sending a certified letter demanding a refund. If the broker doesn't voluntarily return the excess, an unjust enrichment claim can be filed, and because the amounts involved are often small, a small claims procedure can resolve this relatively quickly. Reporting the real estate agent's excess commission collection to the local city, county, or district office as a civil complaint can also lead to administrative sanctions, and this can sometimes create enough pressure to prompt a voluntary refund during negotiations.
Real estate agent commission disputes involve somewhat complex calculations, but comparing the rate table against the amount actually paid makes any overcharge clear. Jinheon Law Firm supports foreign transaction parties in reviewing commission appropriateness and claiming back excess amounts.
#RealEstateAgentCommissionKorea #StatutoryCommissionRate #UnjustEnrichmentClaim #SmallClaimsProcedure #LicensedRealEstateAgentsAct #ExcessCommissionClaim #ForeignRealEstateTransactionKorea #RealEstateDisputeKorea #HoamForeignLegalColumn #HoamLawFirm
It's not uncommon for a real estate agent to charge a commission exceeding the statutory rate, or to charge both the landlord and tenant separately for the same transaction, and foreign parties are often affected by this. The bottom line: any commission charged above the statutory cap is invalid for the excess amount, and even if it has already been paid, it can be reclaimed as unjust enrichment. Foreign transaction parties are often unaware of Korea's commission rate structure altogether and tend to simply pay whatever amount the real estate agent states, which is the main source of this kind of dispute.
How is the broker commission rate set?
For housing transactions, commission caps are set by local government ordinance based on brackets of the transaction amount, and any agreement exceeding that cap is invalid for the portion above the cap. In other words, even if a tenant separately agreed to a higher fee with the real estate agent, there is no obligation to pay the amount exceeding the statutory ceiling in the first place. Because the cap rate decreases as the transaction bracket rises, it's especially important to check the official rate table for high-value officetel or large-unit contracts.
How can you check whether you were overcharged?
Because the commission cap differs by transaction amount and type (sale, jeonse, or monthly rent), the transaction amount stated in the contract should be compared against the rate table published by the relevant local government, against what was actually paid. For monthly rent contracts, there is a separate formula for converting the deposit and monthly rent into an equivalent transaction amount, so simply using the monthly rent figure alone can produce an inaccurate result — the correct conversion method should be checked. If the conversion method is confusing, contacting the local government's real estate information division or district office to confirm the exact cap amount is also a good option.
What procedure can be used to recover the excess?
The first step is notifying the real estate agent of the overpayment and sending a certified letter demanding a refund. If the broker doesn't voluntarily return the excess, an unjust enrichment claim can be filed, and because the amounts involved are often small, a small claims procedure can resolve this relatively quickly. Reporting the real estate agent's excess commission collection to the local city, county, or district office as a civil complaint can also lead to administrative sanctions, and this can sometimes create enough pressure to prompt a voluntary refund during negotiations.
Real estate agent commission disputes involve somewhat complex calculations, but comparing the rate table against the amount actually paid makes any overcharge clear. Jinheon Law Firm supports foreign transaction parties in reviewing commission appropriateness and claiming back excess amounts.
#RealEstateAgentCommissionKorea #StatutoryCommissionRate #UnjustEnrichmentClaim #SmallClaimsProcedure #LicensedRealEstateAgentsAct #ExcessCommissionClaim #ForeignRealEstateTransactionKorea #RealEstateDisputeKorea #HoamForeignLegalColumn #HoamLawFirm