Definition
In Korea, a gagyeyakgeum (holding deposit) is money you send before signing a formal real estate contract so nobody else grabs the place you like. No Korean statute uses that exact word, but whether you can get the money back depends on whether you and the other side had already agreed on key terms, like the price and the balance payment date, when you sent it.
Just holding the place, or already under contract?
Think of reserving a table at a restaurant. You see a room you like, tell the landlord "don't show it to anyone else," and send 1 million won (about $750) to their bank account. The next day you find a bigger, cheaper room and ask for your money back. Does the landlord have to return it?
A lot of people think, "I haven't signed anything yet, so I get 100% back." But under Korean law, a contract doesn't need paper. It's a consensual contract, meaning an agreement made by words or mutual consent is already binding. Korean courts care far less about whether a written contract exists and far more about what was actually agreed.
Suppose you texted with the broker or landlord and locked in the full sale price or jeonse/rental deposit (jeonse is Korea's lump-sum deposit lease), the move-in date, and the balance payment schedule, and then sent the money. Legally, a contract may already exist. In that case, changing your mind alone may not get your money back. Still, whether a contract was formed depends on the facts of each case.
A bit more precisely: the key tests Korean courts use
The first thing a Korean court looks at is whether you agreed on the essential content of the deal. If you had specific agreement on the key terms, such as which property it is, the total price, and how it will be paid, a contract can be found to exist even without a written agreement.
The second test is whether there was a special term, meaning a side agreement with specific conditions. Say that before sending money you texted, "If I cancel before signing the formal contract, you'll return the full holding deposit," or "If I back out on a whim, I give up this money as a penalty." In principle, that special term takes priority. It has to be clear, though, and a court can reduce a penalty that is excessively large.
It's different if the key terms, like price and payment timing, weren't settled and you just wired money saying, "Please don't give it to anyone else, just hold it for me." In that case, a court is likely to find no contract was formed. Unless there was a clear agreement that you'd give up the deposit, you can get it back as unjust enrichment with no legal basis.
If you change your mind, how much could you owe?
A common mistake is thinking, "I can walk away anytime by just losing the 1 million won I put down." If the key terms were already agreed and a contract exists, the cancellation amount is based not on the holding deposit you actually sent, but on the full formal deposit you originally agreed to.
For example, say it's a jeonse contract with a 100 million won (about $75,000) deposit, and the formal contract deposit is 10 million won (about $7,500), but you sent only 1 million won first as a holding deposit. In a ruling (Case No. 2014da231378), Korea's Supreme Court held that when only part of the contract deposit has changed hands, neither side can freely cancel as a rule. Even if cancellation is allowed, the cancellation amount should be based on the full agreed deposit, not the amount actually paid. Under this standard, a landlord can't simply pay back double the 1 million won received (2 million won) and walk away. A tenant who gives up 1 million won isn't automatically free either, and disputes can arise over the rest of the deposit or damages.
That's why, in real deals, people often swap a special-terms text before sending money, such as "Either side can cancel anytime before the formal contract is signed, and the full amount sent will be refunded." Court decisions can still vary depending on the specific circumstances.
Common misconceptions
Until you sign a paper contract, you can cancel anytime and always get your full holding deposit back.
Even without a written contract, if you agreed on key terms like the price and balance date by text or phone and then sent money, a contract may already exist, and you may not get the money back.
If you cancel after putting down a holding deposit, you just give up the amount you sent and that's the end of it.
If the main terms were agreed and a contract was formed, then in light of a Korean Supreme Court ruling on a case where only part of the deposit was paid, any cancellation payment or damages may be based on the full formal deposit originally agreed (usually 10% of the price), not the amount you actually paid.
Where you meet it
You text to settle the deposit, monthly rent, and move-in date, send 500,000 won (about $375), then cancel on a whim. If a court finds a contract was formed, you may not get the money back. However, in a ruling (Case No. 2022da247187), Korea's Supreme Court held that if there was no clear agreement to give up the holding deposit before the main contract, it can be returned even if you simply changed your mind.
Before sending money, you text, "If my loan doesn't come through or the contract doesn't go forward, the holding deposit will be fully refunded." If the loan falls through, that text is your basis for getting everything back.
In one sentence
Getting a holding deposit back depends not on whether a paper contract exists, but on whether the key terms were specifically agreed and whether there was a refund special term.