Even if the home goes to auction, part of it comes back before the bank

Hear that the home you live in has gone to auction and it is easy to assume the deposit is gone entirely. All the more so if the property register shows a bank's mortgage registered ahead of your move-in report.

But the law makes an exception for tenants meeting certain conditions. A fixed portion of the deposit is repaid ahead of secured creditors. It is called minimum priority repayment.

Not everyone qualifies, though. The deposit must sit below a ceiling set for each region. That is where the 'small' in the name comes from.

The way the regions are divided takes some getting used to: Seoul highest, then the overconcentration control region, then metropolitan cities, then everywhere else. Two cities in the same Gyeonggi Province can fall in different bands.

The amount repaid is the lower of two figures: the amount set by the decree and your own deposit. You cannot receive ₩55M on a deposit of ₩20M.

Here is the part to be most careful about. The ceiling has no middle ground. Up to ₩165M you receive ₩55M; at ₩166M you receive ₩0. The whole thing turns on ₩1M.

One thing not to misread, though. Falling outside minimum priority repayment does not take every right with it. If you have a fixed date stamp, the priority repayment right remains, separately, and you are paid according to your rank in the distribution. What disappears is the right to skip the queue, not the right to be paid.

Nor is it settled by the amount alone. Before the auction application is registered you must have taken delivery of the home (actually be living there) and completed resident registration (filed your move-in report). Miss either one and you are outside the scheme whatever the amount.

There is also a cap. The total paid out under minimum priority repayment cannot exceed one half of the property's value, land included. Where one building has several small-deposit tenants, they share within that cap in proportion to their respective fixed amounts. It is the provision that actually bites in multi-household buildings with many tenants.

Finally, the most important warning on this page. The table above is on the Enforcement Decree as last amended on 21 February 2023, but an actual case follows the decree in force when the mortgage was registered, not today's decree. If the home carries a mortgage registered long ago, the lower amount from that time governs. Which is why the registration date on the property register is the first thing to check.

So there are three things you can do now. Pull the property register and check the date and amount of the mortgage; see whether your deposit sits inside the regional ceiling; and confirm that the move-in report and the fixed date stamp are both in place. All three can be done today.