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[HOAM Foreign Law Column] Real Estate Agent Negligence: Can You Sue Your Broker?

Legal steps to take if your real estate broker's mistake caused you financial loss.

[HOAM Foreign Law Column] Real Estate Agent Negligence: Can You Sue Your Broker?
Table of Contents

When you hire a real estate agent in Korea, you are paying for more than just a house tour; you are paying for professional 'Due Diligence.' If an agent provides incorrect information about a property’s debt, ownership, or legal status, they are legally liable for the resulting financial damage.

1. The 'Duty to Verify and Explain' (Hwak-in Seol-myeong)

Under the Licensed Real Estate Agents Act, brokers must provide a 'Property Explanation Statement.' This document must accurately list:

  • Debt Status: Mortgages (Geun-jeo-dang), provisional attachments, or unpaid taxes of the landlord.
  • Ownership: Whether the person you are signing with is the actual owner on the register.
  • Maintenance: Significant defects in the building’s structure or facilities. If any of this is missing or incorrect, it is a breach of duty.

2. Can You Sue Your Broker?

Yes. If you lose your deposit because an agent told you "the house is safe" despite a heavy mortgage, you can file a Damage Claim Lawsuit. The court will examine whether the agent exercised the care required of a professional. Note: If the tenant was also careless (e.g., didn't check the register themselves), the court may assign 'Contributory Negligence,' reducing the compensation.

3. Claiming via Mutual Aid (Gongje)

Individual brokers can be hard to track down if they close their office. However, every licensed broker must join a Mutual Aid (Gongje) program or insurance. You can claim up to the policy limit (usually 100-200 million KRW) directly from the Korea Association of Realtors. This provides a safety net for foreign tenants who might otherwise have no way to collect.

4. Essential Evidence for a Claim

To win a case against a broker, keep these records:

  • The signed 'Property Explanation Statement' (the most important evidence).
  • Recordings of verbal promises (e.g., "The landlord will pay off the debt with your deposit").
  • Text messages or KakaoTalk logs regarding the safety of the house.

5. Why Hoam Law Firm?

Proving broker negligence requires a precise comparison between what is on the legal register and what was stated in the explanation form. Hoam Law Firm specializes in representing foreigners who have been misled by agents. We handle the complex litigation against both the individual broker and the insurance association to ensure your losses are fully compensated.

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