Rent issues

In Korea, getting other people to do something is never easy, especially when you’re a foreigner -- you often don't have any leverage. For example, take our recent rental issue.

Background: In the U.S., landlords usually ask for a month’s deposit, sometimes two. However, in Korea landlords require a much larger one, called a jeonsae (전세, 傳貰). Sometimes it’s as low as $5,000, though normally it’s about $10,000 for a typical small apartment. The smaller the jeonsae, however, the larger the monthly payment, or wolsae (월세, 月貰). Also, both renters and landlords each pay a $200 commission to the real estate agent that draws up the contract.

Setup: As part of CDI’s typical compensation package, the school provides about $5,000 for a jeonsae. We contributed another $5,000 and pay $400 monthly. We found out later that the property was assessed as being worth $48,000. Given this, and assuming our landlady invests the deposit money at 6%, her total rate of return for the property is almost 11% annually. Our apartment is about 5 pyeong (평, 坪), about 16.5m2 or 180 ft2­­­.

According to the terms of my teaching contract, my last day was supposed to be May 7, but because CDI would rather have teachers come and go at end of their quarterly terms, I stayed until the end of the spring 2008 term. This worked well not only for the school, but also for me, since I knew I would be shipping out July 1, and didn’t want to be sitting around for two months. (One is enough.)

So when CDI and I decided to extend our contract in March, SY and I informed our landlady that we would be staying until the end of June. She said that was fine, but that we should reimburse her the $200 for the next tenant’s fee. We bargained her down to $100.

Problem: SY spoke with the real estate agent during the last week of May, we found out that if the landlady wanted to, she could is legally entitled to continue charging us monthly rent as an “extension” of our current contract. In talking with another real estate agent – one who was familiar with our apartment – it turns out that’s what she did with the previous tenant.

When we asked if we could get our deposit back when we move out, the landlady said she "didn’t have the money," but that she could give us the money when another tenant moves in.

Then we found out she’s also raising the wolsae by 38% to $550 per month. At that point, it looked extremely likely that we would end up paying rent on our apartment even after we’d moved out. Real estate agents familiar with our apartment said getting someone to move in at that rate would be hard – our apartment doesn’t get much sunlight during the day, it has a mold problem, and there’s no air conditioning.

But then again, what would the landlady have to lose? If someone takes it, she gets a 15% rate of return; if no one moves in, she can continue to milk us even after we’re long gone. It was a pretty frightening scenario for us.

Solution: I spoke with the faculty manager (교수부장) at CDI about our situation on Thursday, May 29, and asked for help. She couldn't believe that the landlady would do that -- in her opinion, she had to give our money back. Not that I wanted to argue with her, but I explained what the real estate agent said about the legality of it and the other agent's opinion about getting someone to move in.

I also said that although I’d agreed to replace the school’s money with our own after my last paycheck, I couldn’t do that until the landlady agreed to give us our money back when we move out.

Though she sent my last paycheck (and airplane ticket compensation) the next day, she apparently didn’t understand my position because I received a phone call on Monday, June 2, asking why I hadn’t sent the school’s $5000. I explained again what I’d said on the previous Thursday, that I couldn’t give the money until the landlady agreed to give our deposit money when we move out. This started a flurry of phone calls.

We spoke with the landlady on the morning of Tuesday, June 3, and she adjusted her position: if someone moves in, she can give the deposit, but if no one moves in, she will only charge us July rent, and we can get our deposit at the end of July at the latest. We said "we’ll think about it." ("생각 해볼거에요.")

Later that day, I visited CDI again and repeated what the landlady said to us. Mira relayed what I said to Mr. Gi, the branch manager and co-signor on the contract. Mr. Gi spoke with the landlady, and the landlady said that we had agreed to getting the money in July. She got angry because she perceived him as butting in when the tenants were apparently fine with the situation. She interpreted “we’ll think about it” as meaning we were fine with the situation.

Finally, I suggested that we all sit down at the real estate agent’s office to discuss everything and make sure everyone understood each other. Mr. Gi was fine with that, but the landlady didn’t want to do that. She finally agreed to give us our deposit when we moved out.

I’m not sure whether she only agreed to that because she didn’t want to deal with the added hassle, or because she didn't want to come face to face with someone who "wouldn't take her nonsense," but we got what we wanted.

Mr. Gi also got what he wanted -- the return of the school's $5000 deposit. I wired the money from our account, making us the sole recipient of the $10,000 deposit on our apartment.

Having succeeded in mollifying one co-signor (Mr. Gi) I hope she doesn't change her mind later and mess us over. In the meantime, however, I'm happy about another thing:

I successfully leveraged our position as the weakest of the three parties into getting at least a verbal agreement to do things our way.