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[116] 2014.08.06
People complain about goshiwons, particularly those in Seoul. Goshiwons refuse to give a refund when a lease is cancelled. There is a need for standard terms and conditions.

 

#701 Seoul YWCA 20, Myeong-dong 11-gil, Jung-gu, Seoul, Korea
TEL.: 82-2-774-4050/FAX: 82-2-774-4090
 
Press Release
 
Date
: Aug. 6, 2014
Person in Charge
: Im Eun-Gyeong,
Secretary General.
Lee Sun-Hwa,
Assistant Administrator.
Tel.
: 82-2-774-4050
 
People complain about goshiwons, particularly those in Seoul.
Goshiwons refuse to give a refund when a lease is cancelled.
There is a need for standard terms and conditions.
 
It has been reported that the number of complaints about goshiwons (one-room studio used by many students for its low rent) in Seoul submitted to the 1372 Consumer Service Center stood at 366 in the first half of 2014. Fifty-nine percent of the complaints were about penalties associated with lease cancellations. Many young people use goshiwons for their low rent and because they do not ask for a security deposit.
 
[Number of complaints about goshiwons in Seoul in the first half of 2014]
 
[Reasons for complaints about goshiwons]
It appears that many goshiwons do not comply with the current refund regulations. About 39.6% (145 cases) of the entire 366 cases of complaints about goshiwons in Seoul are related to goshiwons refusing to provide a refund for those wishing to cancel their lease before the expiration period. About 30.1% (110 cases) of the entire cases were connected to inquiries about the current regulations.
 
[Major cases of complaints]
-           One lessee found that the facility (in Jongro) was very poor and other lessees suffered from skin problems three days after moving in. The leaseholder refused to accept the lessee’s request for a refund, pointing to the relevant clause in the contract.
- One lessee found that the heating system was not operating and that the shower and the kitchen were very dirty, unlike what was portrayed in the content of the goshiwon’s homepage. The leaseholder refused to accept the lessee’s request for a refund, pointing to the internal regulations stipulated in the contract.
- One lessee was in a situation where he wanted to move out of his room after having only stayed there one day. The leaseholder said that only half of the rent (280,000 won) could be refunded.
“A clause in terms and conditions concerning the cancellation or termination of a contract that falls under any of the following subparagraph shall be null and void: A clause that excludes the right of customers to cancel or terminate the contract under this Act, or limits the exercise of such right.” (The Regulation of Standardized Contracts Act, Article 9, Paragraph 1). The Korea Fair Trade Commission (KFTC) should provide standard terms and conditions concerning the use of goshiwon and ensure that goshiwon businesses do not apply unreasonable regulations. It also needs to provide specific criteria concerning rent refunds for the mid-term cancellation of a lease for the use of a studio for more than a month.
 
A goshiwons is does not fall under the category of a lodging business. Thus, they are not subject to administrative regulations. The Special Act on the Safety Control of Publicly Used Establishments only covers safety-related matters. Seoul City should provide a legal and institutional system for the proper management of goshiwons in order to protect lessees. As for people wishing to move into a goshiwon, they are advised to meticulously check the actual facilities of the goshiwon and to carefully read over the contract clauses related to refunds for a mid-term lease cancellation before signing the contract.
 
 
 
-----------------------------Partners of Korea National Council of Consumer Organizations------------------------------
National YMCA of Korea, Green Consumers Network in Korea, Korea Federation of Housewives Clubs, National Council of Homemakers Classes, Korea Consumer Education Center, National Council of YMCAs of Korea, Consumers Union of Korea, Consumer Affairs Institute, Citizens Alliance for Consumer Protection of Korea


#524, #525, 47, Sejong-daero 23-gil, Jongno-gu, Seoul (Postal code: 03182)
  TEL 82-2-774-4050   FAX 82-2-774-4090   E-mail: sohyub@consumer.or.kr