SOUTH KOREA Law and Practice Contributed by: Hyeon Kang, Tae Kyoon Kim, Seungil Hong and Sung-Ho Moon, Bae, Kim & Lee LLC
for new business models for a period of up to four years. These recent advancements suggests an increasing influence of disruptive technologies on real estate markets. Digital assets and block - chain are expected to become one of the key instruments for securitising real estate and rais - ing funds. The evolution and regulation of these new technologies and products will continue to be significant topics within Korean real estate capital markets in the future. Over the past 12 months, large-scale public financing for real estate investment has faced challenges due to persistently high interest rates, and there have been burdensome situa- tions in refinancing matured PF loans. The dif - ficulty in obtaining funding through loans has sometimes led to situations where additional capital injections from sponsors or their affiliates are required to prevent defaults. Concurrently, a growing demand for credit funds specialising in distressed assets has also been observed. A slowdown in the real estate market and high interest rates have adversely affected the profit - ability outlook for real estate project financing. This has increased liquidity risks for construction companies and related sectors, leading to dete - riorating financial soundness and debt restruc - turing workouts. In Korea, financial institutions tend to prefer private workouts over court-led rehabilitation or bankruptcy proceedings, except
rental flats rather than constructed rental flats and allowing registration of flats of 85 m² or less. An amendment to the law to reduce the acquisi - tion tax from 12% to 6% for corporations that operate purchased rental housing has been pro - posed and is likely to be passed within the year. In addition, the government has decided to amend the law to allow public funds, such as ETFs, to invest in publicly traded REITs that have invested more than 40% of their total assets in funds, and this is expected to be implemented by the end of the year. 2. Sale and Purchase 2.1 Categories of Property Rights Property rights that may be acquired include: • ownership rights; • superficies ( jeesang-kwon ); • easements ( jeeyeok-kwon ); • jeonse-kwon (a deposit-based lease right recorded in the registry); or • mortgages. 2.2 Laws Applicable to Transfer of Title The RERA applies to the transfer of title of all real estate. 2.3 Effecting Lawful and Proper Transfer of Title To be lawful and proper, transfers of real estate must be registered in the real property registry. Title insurance is not common in Korea. The COVID-19 pandemic has not particularly dis - rupted or added to these procedures.
in unavoidable circumstances. 1.3 Proposals for Reform
An amendment to the Special Act on Non-Gov - ernmental Rental Housing has been proposed and is likely to be passed in 2024, changing the policy that prohibits registration of purchased
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