SEOUL, April 6 (Korea Bizwire) – Korean prosecutors have launched an investigation into lawyers who have stepped into the real estate business. It seems like the second round has started in the battle between lawyers and realtors over a market worth two trillion won.
The Seoul Central District Prosecutor’s Office announced that it had assigned the ‘Trust Real Estate’ case to detectives. The head of the company was sued for breaching the real estate mediation law.
Kong Seung-bae (45), a lawyer famous for his performance in the M&A market, established ‘Trust Real Estate’ with three other lawyers in January. It was the first real estate agency established by lawyers. With a saturated legal market offering little opportunity for growth, Kong and his partners set eyes on expansion into the real estate market.
Since real estate mediation is also an act of law, the lawyers claimed that they had a competitive advantage. They also ‘declared’ that their fees would be reasonable, with clients charged 990,000 won at the most. This was more than enough to draw the attention of real estate buyers.
However, realtors were not happy about the intrusion. They claimed that mediation of real estate is a ‘sacred’ duty of realtors designated by law, and the lawyers at Trust Real Estate were illegally invading their industry.
In March, realtors reported Kong to the Gangnam Police station for breaching the law, as his company used the term ‘Real Estate’ in its name even though the lawyers are not realtors.
The police investigated the complaint and decided that Kong was guilty. They explained that the penalty for using terms such as ‘Real Estate Trade’ when one is not a realtor could be as high as a year in jail or a fine of over 10 million won.
However, Trust Real Estate stated that they did not break the law, as the company receives a fixed fee for legal advice instead of a commission for mediation.
Lawyers are strongly opposed to the decision of the police. With the number of lawyers in Korea surpassing the 20,000 mark, some say that real estate mediation could be a new field for lawyers to pioneer.
The Korean Bar Association stated that there is no problem for lawyers to work in real estate after going over the legal principals. Association officials plan to submit a report of their interpretation of the law to prosecution.
By Francine Jung (firstname.lastname@example.org)