Chonsei contracts are prevailing at house lease contracts in Korea. In
chonsei contracts, tenants of houses give a lump-sum deposit to the owner of
the property instead of paying periodic rent. This study constructs a chonsei
price model from a housing price model under no arbitrage condition. The
model implies the expected price change of the property determines the
chonsei/trade price ratio. The chonsei price approaches to the trade price as
the trade price is not expected to rise and it lowers as the trade price is
expected to rise more. The implication of the model is confirmed both in time
series and cross sectional data. Also, it is confirmed in panel data analysis.