A Study on the Confirmation and Explanation Duty to Transaction Subjects of Licensed Real Estate Agents

This paper provides a legal analysis of residential real estate agents’ duty to provide confirmation and explanation to parties to a transaction. The authors conduct a legal analysis of real estate agents’ duties by interpreting relevant legal provisions and 7 comparatively recent court cases. The amended Act Governing Business Affairs of Licensed Real Estate Agents and the Enforcement decree of the Act obligate real estate agents to provide confirmatory and explanatory services regarding the property being transacted. Current state, location and ownership rights regarding the property must be provided. Restrictions on transactions and property usage are also part of the Acts and subordinate statutes. These legal provisions do not reflect market realities and are therefore unreasonable. Furthermore, existing laws are not sufficient to solve complicated and diverse problems present in actual real estate market transactions. In such situations, court decisions signal the government’s desire to establish a standard for real estate broker responsibilities as well as for the rights and responsibilities of parties to a transaction. Through case analyses, the authors conclude that Korean courts place a heavier responsibility on real estate brokers as evidenced by the ever-stricter standards of real estate practice. Modern contract law exhibits a trend toward strengthening standards of professional responsibility, but excessive regulation can discourage real estate brokerage, which is a loss to the national economy. The authors propose various corrective measures for reducing the excessive burden placed on real estate brokers in the hopes of reinvigorating the real estate transaction market and national economy.