When a rented home in Seoul is sold at court auction, the amount a tenant collects ahead of every other creditor is 55 million won. The conditions: a deposit of 165 million won or less, residency plus resident registration completed before the auction commencement is entered in the register, and a timely distribution claim filed with the court. That 55 million won is a ceiling, not the full deposit — if a mortgage was recorded first, the remainder falls into a priority contest. And a deposit that rises from 165 million to 170 million won, a difference of just 5 million, can cut recovery by 8 million.
How Much Does Priority Payment Actually Cover?
Under the Housing Lease Protection Act enforcement decree as summarized by Korea's Easy Law portal, both the qualifying deposit range and the protected amount vary by region.
| Region | Deposit ceiling (10k won) | Priority payment (10k won) | Coverage at the ceiling |
|---|---|---|---|
| Seoul | 16,500 | 5,500 | 33.3% |
| Overconcentration zone (excl. Seoul), Sejong, Yongin, Hwaseong, Gimpo | 14,500 | 4,800 | 33.1% |
| Metropolitan cities, Ansan, Gwangju, Paju, Icheon, Pyeongtaek | 8,500 | 2,800 | 32.9% |
| Other regions | 7,500 | 2,500 | 33.3% |
The rightmost column is calculated against each region's deposit ceiling. All four land near 33%. A tenant who just barely qualifies can protect roughly one third of the deposit through this route; the other two thirds move into ordinary priority distribution based on the confirmed date stamp.
Four requirements apply: the deposit must fall under the regional ceiling; occupancy and resident registration must be in place before the auction filing is registered; the transfer must be an auction or tax seizure rather than a sale; and a distribution claim must be filed with the court. That last item is the one most often missed — without the filing, priority exists on paper but pays nothing.
The reference date is another trap. The governing rule follows the date the first security interest was recorded, not the lease date. The same source states that the February 21, 2023 amendment applies to leases in force on that date, while holders of security interests acquired earlier remain under the previous rules. Move into a home whose mortgage was recorded in 2018, and the lower figure from that era applies instead of today's 55 million won.
165 Million vs 170 Million: An 8 Million Won Gap
Take a Seoul property sold at auction for 200 million won, with 3 million in execution costs and a senior mortgage of 150 million won recorded after February 21, 2023. The distributable pool is 197 million won. Varying only the tenant's deposit produces this.
| Deposit (10k won) | Qualifies as small-deposit tenant | Priority payment (10k won) | Pool left after mortgage (10k won) | Total recovered (10k won) | Recovery rate |
|---|---|---|---|---|---|
| 6,000 | Yes | 5,500 | 0 | 5,500 | 91.7% |
| 14,000 | Yes | 5,500 | 0 | 5,500 | 39.3% |
| 16,500 | Yes | 5,500 | 0 | 5,500 | 33.3% |
| 17,000 | No | 0 | 4,700 | 4,700 | 27.6% |
The arithmetic splits two ways. If the tenant qualifies, 55 million comes out first, the remaining 142 million goes entirely to the 150 million mortgage, and the pool hits zero — the tenant stops at 55 million. If the tenant does not qualify, priority payment is zero, the full 197 million goes to the mortgage first, and the 47 million left over returns to the tenant by confirmed-date priority.
So between a 165 million and a 170 million won deposit — a 5 million won contract difference — recovery drops from 55 million to 47 million. Paying more up front returns less. At the other end, a 60 million won deposit turns the same 55 million into 91.7% coverage. Because the priority payment is a fixed sum, its protective power dilutes fast as deposits grow.
Priority payment is a fixed amount. The larger the deposit, the smaller the share it protects — and one step past the qualifying line, the entire 55 million disappears.
One further limit applies: if priority payments exceed half the property's value, they are capped at half. In the example, half of 200 million is comfortably above 55 million, but in a multi-household building with several qualifying tenants, that ceiling is divided among them.
Where Does a Tenant Sit in the Distribution Order?
Outside the priority band, ranking is everything. Kyeongin Ilbo lays out the auction distribution order as: (1) execution costs; (2) small-deposit tenant claims plus the final three months of wages and three years of severance; (3) taxes levied on the property itself; (4) whichever came first among tax statutory dates, mortgages, jeonse registrations, and confirmed-date tenant claims; and then remaining wage claims, public charges, and general creditors.
The tenant appears twice — at rank two as a small-deposit tenant, and at rank four as a confirmed-date tenant. Within rank four, whichever is earlier between the confirmed date and the mortgage registration takes precedence, which is why the timing of registration and date stamping decides the actual payout.
The property-tax rule has since been softened: the same article notes the amendment under which such taxes no longer outrank a tenant's deposit. Where the tax's statutory date falls later than the tenant's confirmed date, that amount goes to the tenant first. The relief is limited to property-specific taxes, though — general delinquent national taxes with an earlier statutory date still rank ahead, and the article warns that unpaid taxes invisible on the register can surface later and block recovery entirely.
What to Check
- The first mortgage registration date in the register — not the lease date; this decides which era's priority figures apply
- The distance between your deposit and the regional ceiling — 165 million in Seoul, 145 million in the overconcentration zone, 85 million in metropolitan cities. One won over the line means zero priority payment
- Your registration and confirmed-date stamps — a single day later than the mortgage drops you behind it at rank four
- How many other households share the building — multiple qualifying tenants split the half-of-property-value cap
- The distribution claim deadline — priority only pays if the claim is filed within the court's window
- The landlord's tax delinquency — statutory dates invisible on the register can outrank your stamp; reviewing unpaid national taxes before signing is the only check available
- Whether deposit guarantee insurance is available — it bypasses this priority contest altogether