Mandatory Disclosure of Lot Numbers in One- and Two-Room Ads... Realtors Say "We Won't Advertise"

Revised Licensed Real Estate Agent Act, Guidance Period Ends
Must Specify Lot Number in Ads for Multi-Family Houses
Real Estate Industry "Concerns Over Hijacking and Direct Contracts"
Some Say "Are You Saying Not to Advertise One-Room Apartments?"

The above photo is not related to the article below. (Photo by Yonhap News)

[Asia Economy Reporter Moon Jiwon] From the 21st, licensed real estate agents will be fined if they do not disclose the exact lot number when advertising multi-family and multi-unit housing listings. As a result, consumers will be able to verify the precise location of such multi-family and multi-unit housing when searching for rental listings on real estate platforms like Naver. However, the brokerage industry is opposing this, arguing that it will lead to more listing poaching and direct contracts between landlords and tenants.

According to the Ministry of Land, Infrastructure and Transport (MOLIT) and the real estate brokerage industry on the 21st, MOLIT will begin full-scale crackdowns and penalties from this day as the grace period for the amended Licensed Real Estate Agents Act, which focuses on sanctions against false listings and unfair advertising, ends. Although the amendment was enforced on the 21st of last month, the government allowed a one-month grace period for penalties, considering that licensed agents might need time to revise their customary advertising practices.

According to the amendment, all types of buildings except for pure single-family houses must include the building's lot number and unit/floor number in their advertisements. Buildings are divided into single-family houses and multi-family housing; the single-family category includes detached houses, multi-family houses, and multi-unit houses, while the multi-family category includes apartments, row houses, and multi-unit houses. The obligation to disclose lot numbers does not apply only to detached houses within the single-family category.

Although single-family houses are generally required to disclose lot numbers, if requested by the client, only the town, township, or neighborhood name needs to be indicated.

Apartments have many units, and since the client can request the floor to be indicated as low, middle, or high, even if the address is disclosed, it is unlikely that the specific listing can be identified. However, for multi-family and multi-unit houses with fewer floors and units, disclosing the lot number inevitably leads to the identification of the specific listing. Typically, brokers only disclose approximate locations in advertisements due to concerns about exposing property details and show the property directly when clients visit.

The head of A Licensed Real Estate Office in the Seoul metropolitan area said, "If the lot number is disclosed, the property information is revealed the moment the advertisement is posted," adding, "Brokers who are reluctant to expose their listings will simply not advertise their properties unless they are 'local listings'." Another broker also said, "Posting advertisements risks having the listing taken by other brokers, and direct contracts between parties may also increase."

MOLIT maintains that the amendment is unavoidable to provide consumers with more accurate listing information. From today, licensed real estate agents who post advertisements without including the lot number will be fined 500,000 KRW. Platform operators such as Naver and Zigbang who post incorrect advertisements and fail to comply with MOLIT's correction orders will be fined 5,000,000 KRW.

Some express concerns that the amendment may significantly reduce non-apartment listings. In fact, immediately after the amendment took effect on the 21st of last month, brokers in Seongnam-si, Gyeonggi-do, collectively removed their online advertisements fearing fines.

A representative from the Korea Association of Licensed Real Estate Agents said, "We understand the government's intention, but the backlash from members is very strong," adding, "If brokers remove their advertisements, ultimately, consumers will be the ones who suffer."