An appeals court ruled that a licensed realtor who failed to properly verify and explain information affecting property rights and the recovery of a deposit while introducing a listing to a victim of a jeonse scam is liable for up to 70% of the damages. In one case, the appeals court raised the realtor's share of liability to 60%, up from 40% set by the trial court.
According to legal sources, the Seoul Central District Court's Civil Division 1-3 (Presiding Judge Maeng Jun-young, Director General judge) on Aug. 31 ruled partly in favor of the plaintiffs in two damages suits filed by jeonse scam victims against a licensed realtor, a real estate brokerage corporation, and the Korea Association of Realtors(KAR).
The realtor's proportion of liability recognized in the two cases was 60% and 70%, respectively. The victims lost jeonse deposits of 180 million won and 120 million won, and the court ordered the realtor to pay 108 million won and 84 million won, respectively.
◇ "Misinformed on building value and senior deposits"… liability 40% → 60%
The first case concerns a dispute over a multi-family house on Nambusunhwan-ro in Gwanak District, Seoul. The licensed realtor told the tenant key information—such as the building's value and the size of deposits of other tenants who had signed earlier—in a way that differed from the facts.
The dwellings later went to auction, but the tenant did not receive a single won in distribution and lost the 180 million won deposit.
The trial court set the realtor's liability at 40% of the damages and ordered payment of 72 million won. But both the tenant and the realtor appealed, and the appeals court raised the realtor's liability to 60%, increasing the award to 108 million won.
◇ Failed to verify forged trust consent form… 70% liability upheld
The second case involves a lease of a tourist hotel building in Sillim-dong, Gwanak District, Seoul. The building had a trust registration in favor of an asset trust company, so the actual owner (trustee) and the lessor were different.
When leasing such trust property, the trustee's consent is required for a tenant to secure opposability. Opposability means the legal right to assert an existing leasehold against a new owner even if the building's ownership changes.
The licensed realtor provided the tenant with a document stating the trustee consented to the lease even though it had been forged, without verifying its authenticity. The tenant ultimately failed to obtain opposability and lost a deposit of 120 million won.
The trial court set the realtor's liability at 70% and ordered payment of 84 million won, and although the realtor appealed, the appeals court upheld the same finding.
The realtor argued that the benefit of use and revenue obtained while the tenant continued to reside at the property should be deducted from the damages, but the court rejected the claim.
The Seoul Central District Court said the significance of the rulings lies in explicitly recognizing that licensed realtors, who play an important role in the lease contracting process, bear a higher duty of care as a good manager and a duty to explain when informing tenants about the property's status and related rights.