The push to make the Korea Association of Realtors (the association) a statutory body, a long-held goal, is just around the corner, but neither the association nor the proptech industry appears to be welcoming it. The association says the revision is a half measure because it excludes mandatory membership and inspection and enforcement authority, while the proptech industry worries that platforms could be further excluded or controlled in the long run.
According to the brokerage industry and the National Assembly on the 25th, the Land Infrastructure and Transport Committee's Subcommittee on Land and Transport Bill Review in the National Assembly approved a partial amendment to the Licensed Real Estate Agents Act on the 24th. If the bill passes the plenary session, the association will become an official body with legal authority rather than a private organization. The bill was jointly proposed by Kwon Young-jin of the People Power Party and Bok Ki-wang of the Democratic Party of Korea, among others, and was referred to the full session of the Land Infrastructure and Transport Committee on the 18th. With the ruling and opposition party secretaries of the Land Infrastructure and Transport Committee working together, the revision is likely to pass the regular session.
Becoming a statutory body is the association's long-held project. The association was a statutory body when it was established in 1986, but it became a voluntary organization after the Real Estate Brokerage Act was revised in 1998. As a result, it has had no particular authority to crack down on or monitor various real estate frauds, such as unregistered brokers or so-called planning real estate schemes. If the bill passes and the association regains statutory status, it will become the largest statutory body in Korea with 110,000 members. The association will also be required to establish a code of ethics on professional conduct and will be given the authority to sanction members who violate the code.
However, the association says it is disappointed that mandatory membership and inspection and enforcement authority were excluded from the revision. Because the code of ethics applies only to members, the association would not have the authority to crack down if a licensed realtor who is not a member commits an illegal act. The association's membership rate is relatively high at 97%, but not all licensed realtors are required to join. Currently, the authority to crack down on illegal brokerage was transferred to local governments when the association became a voluntary organization.
A similar bill that included mandatory membership and inspection and enforcement authority was introduced in 2022, but it failed to clear the legislative hurdle due to pushback from the proptech industry over what it called excessive expansion of powers. An association official said, "The original purpose of the revision was to perform duties the government cannot, such as cracking down on licensed realtors suspected of involvement in jeonse fraud, to create a clean brokerage market, but with all that removed, it has effectively become 'a bun without red bean paste.'"
Proptech companies continue to strongly oppose the push to make the association a statutory body. They worry that even if the controversial parts are removed from the revision, the association could strengthen its powers over time. The association has frequently clashed with several companies, including Darwin Brokerage and Ziptoss, which tout "half-price fees," by filing complaints alleging violations of the Licensed Real Estate Agents Act. They are calling for safeguards, such as an independent body to oversee the association or a clause explicitly preventing mandatory membership.
Still, the association says it is equally frustrated. An association official said, "To establish or amend a code of ethics or the articles of association, we must obtain approval from the Minister of the Ministry of Land, Infrastructure and Transport, so the association cannot act unilaterally as the proptech industry fears," adding, "The passage of this revision carries symbolic significance, but we do not see any substantial change."