[Exclusive] Real Estate Agents' 'Suspension of Business' Criteria Revised... Possible Up to 2 Years

Ministry of Land, Infrastructure and Transport: "Amendment Reflecting Recommendations from the Ministry of Government Legislation"
Industry: "Limited What Can Be Done, Only Responsibility Increases"

(Photo by Yonhap News)

[Asia Economy Reporter Moon Jiwon] The Ministry of Land, Infrastructure and Transport (MOLIT) will establish related regulations allowing licensed real estate agents to be suspended from work for up to two years if they commit multiple violations. Additionally, the suspension criteria can be adjusted more flexibly at the discretion of public officials to strengthen penalties against malicious agents.

According to sources inside and outside the government on the 20th, MOLIT plans to soon announce the proposed amendments to the Enforcement Rules of the Licensed Real Estate Agents Act for public comment.

The amendment is reported to include provisions allowing local governments, as registration authorities, to increase or decrease suspension criteria based on the content, degree, motive, and consequences of the agent’s violations.

Currently, the Enforcement Rules specify suspension periods (1 to 6 months) only for individual violations under the "Suspension Criteria for Licensed Real Estate Agents." As a result, agents who committed violations have mostly been given fixed suspension periods per violation item.

However, going forward, public officials will have the discretion to flexibly increase or decrease these periods. In such cases, agents who violate regulations due to simple mistakes may receive lighter penalties, while those who commit violations maliciously are expected to face stronger sanctions.

However, the industry expresses concerns that as the government strengthens regulations and market monitoring of the real estate market, licensed agents might be unfairly affected. A representative from the Korea Association of Licensed Real Estate Agents said, "Since public officials’ discretion is increasing, concerns cannot be ruled out," adding, "Even after recent legal amendments punishing false or exaggerated advertisements, many local officials have announced penalties based on their own judgment, despite not having official documents from MOLIT."

The amendment also establishes criteria allowing suspension of up to two years if an agent commits two or more violations. Until now, there were no clear regulations on this, and when agents committed multiple violations, suspension periods were combined and penalties imposed on a case-by-case basis according to interpretations by the Ministry of Government Legislation.

A MOLIT official explained, "This amendment reflects the 2018 recommendations from the Ministry of Government Legislation," adding, "The maximum two-year suspension criterion was referenced from similar cases such as the Appraisal Act."

As the government recently expanded agents’ responsibilities for verifying and explaining real estate objects and strengthened monitoring of 'real estate cartels,' some analyses suggest that this regulatory revision will increase the burden on agents. The MOLIT amendment also includes a provision requiring agents to check whether existing tenants have exercised their right to renew their lease when concluding sales contracts and to mark this on the real estate object verification and explanation document.

An industry insider said, "Whether tenants have exercised their lease renewal rights or the priority deposit on a house are things that are difficult to verify unless landlords or others confirm them," adding, "There are limits to what agents can do, but their responsibilities are increasing."