When it comes to completing the process of moving to a new home after signing a lease agreement, there are crucial steps to ensure you secure your rights regarding your security deposit, whether it's for monthly rent or a lump sum for a long-term lease. In order to safeguard your finances, obtaining the right to priority repayment ("우선변제권") through procedures such as the declaration of your new address and the confirmation date is of paramount importance.
✅ Right to Priority Repayment ("우선변제권"): This legal concept, part of the Housing Lease Protection Act, ensures that the tenant has the right to receive their security deposit before anyone else. This right becomes vital when the property, for which a security deposit or lump sum was given, faces potential sale through auction or other means. It allows the tenant to claim, "I have the right to be repaid before anyone else."
The priority ranking in the right to priority repayment dictates who receives the money first, and if your ranking is lower, it might be challenging to retrieve your funds. Three conditions must be met to obtain the right to priority repayment:
- Occupancy: You must have moved into the property you have signed the lease for.
- Change of Address Report: Within 14 days of moving, you need to report your new address to the local resident center.
- Confirmation Date: This is the date when the housing lease agreement is validated by a court or other authority. It is designed to protect the tenant and create a legal record.
Since the order of priority is determined based on the latest of these three conditions, it's recommended to complete both the change of address report and confirmation date procedures right after moving into your new place.
✅ Important Reminder: If your landlord claims they can't return the security deposit immediately but will do so once the next tenant arrives, remember that to retain your right to priority repayment, you must continue to reside in the property. If you are not living in the property when a dispute arises over the security deposit, it can be challenging to retrieve the funds.
To complete the change of address report and confirmation date procedures, you should visit the local resident center of your new neighborhood with your identification and the property lease agreement. If visiting in person is inconvenient, some of these processes can also be done online through government portals like "정부24" or court internet registration services.
Q. Do meeting all three conditions (occupancy, change of address report, and confirmation date) guarantee that I will receive the right to priority repayment?
While meeting these conditions indeed grants you the right to priority repayment, it doesn't guarantee that you will receive 100% of your security deposit back. If the property is sold, higher-ranking entities or individuals receive their claims first. The priority order is as follows:
- Priority 0: Court fees and expenses related to property auction
- Priority 1: Costs incurred by third parties related to auctioned properties
- Priority 2: Highest priority repayment for "소액임차인"* (low-rent tenant) and wage claims according to labor standards law (equivalent to the last three months' wages and accident compensation)
- Priority 3: Taxes, including national and local taxes
- Priority 4: Encumbrances on lease security deposits with confirmed dates (mortgage rights, lease rights, collateral registration, etc.)
✅ "소액임차인" refers to tenants who have paid a lower security deposit, and they can claim a specific amount of money through the right to priority repayment (up to 55 million won in Seoul, for instance, as of 2023).
Having a confirmed date for the security deposit repayment ensures that you move up the priority list, and without it, you might end up at a lower priority. Considering this, it is wise to always obtain a confirmed date. In situations where there are concerns about accumulating taxes even if there is no mortgage on the property, it might be prudent to use only the amount that qualifies for the right to priority repayment as the security deposit and pay the remaining as monthly rent.
Q. Is it necessary to get the confirmation date if three months have passed since I moved in?
Even if three months have passed since your move or if you have leased a commercial property or an LH public lease housing, obtaining a confirmation date remains beneficial. However, in the case of LH public lease housing, the LH itself provides the confirmation date, so you don't need to obtain it directly.