SEOUL, Korea, Mar 20 (Korea Bizwire) – A 32-year-old man surnamed Lee has recently “moved in” with a housemate. Not out of romance but for the money.
Upon renewal of the lease, his landlord requested either a 30-million-won raise in the deposit money for the 79-square-meter apartment or a 300,000-won increase of the monthly rent. Lee, who could not afford that much money, had to get himself a housemate to share such burden with.
He decided to sublet one of the rooms to a new college graduate who agreed to pay him a 3-million-won deposit and 450,000 won monthly rents. Lee was able to keep the lease by paying the raised rents with what he gets from the housemate.
As you may have noticed from the above episode, there is a very unique form of lease widely practiced in Korea in which the tenant deposits a large sum of key money to rent the property for a certain period of time, instead of paying smaller monthly rent. Upon termination of the lease, the money deposit is handed back to the tenant without interest.
This form of lease contract usually has a legal term of two years which was enforced in 1990. The year of 2014 happens to be one of the even-numbered years in which plenty of contracts face their renewals. The key money and rents are rooftop high, and moreover, properties are hard to come by. Under such circumstances, it seems rather easy for the interest of the suffering tenant and one looking for a decent place to stay on a low budget to meet.
Not only has the younger population in their 20s to 30s but also the middle-aged ones in their 40s to 50s joined the housing trend, rather unconventional in Korean culture.
A 44-year-old Sohn was looking for a housemate. His wife and child are living in Canada and his house on mortgage is too big for him to live alone. He decided to get a housemate in order to pay off the debt.
However, there have been several incidents in which the tenant ran off without paying the deposit, which they received upon subletting, back to the housemate.
A real estate broker advises to sign a legally binding contract upon subletting a property from a tenant and get an approval from the landlord.