The Ministry of Land, Infrastructure and Transport said on the 6th that the Cabinet approved a partial amendment to the enforcement decree of the Special Act on Support for Victims of Jeonse Fraud and Housing Stability, with the changes set to take effect Nov. 13.
The amendment sets out the details needed to implement a minimum guarantee for lease deposits and an advance-payment-and-later-settlement scheme. Under the minimum guarantee, the government covers the shortfall when the amount a jeonse fraud victim recovers through an auction or a public sale falls short of one-third of the lease deposit. Jeonse is a Korean housing lease system in which tenants pay a large lump-sum deposit instead of monthly rent.
The advance-payment scheme applies to victims of contracts signed by someone without the legal right to do so, including trust-related fraud. Under the scheme, all or part of the minimum guarantee amount — one-third of the deposit — is paid before an auction concludes, with any remaining recovered funds paid out later once auction and other procedures are complete.
The amendment also assigns the work of paying and settling minimum support payments and advance payments to the Korea Land & Housing Corporation (LH) to handle the process more efficiently. Victims who have asked the government to buy their home can apply for the minimum support payment after the auction margin has been calculated; in other cases, they can apply after disposal procedures for the home are complete. Advance payments can be applied for before LH completes its purchase of the home or before disposal of the home is finished.
The amendment further revises rules to make it easier to purchase homes affected by jeonse fraud and specifies the criteria for real estate investment companies that local governments can use to support victims. It also lays out a procedure allowing the land minister, when needed for victim support, to request data such as a landlord's debt and arrears records from the head of a credit information collection agency.
"Once the minimum guarantee and the advance-payment-and-settlement scheme take effect, jeonse fraud victims will be guaranteed at least one-third of their deposit, which we expect to provide real help for their housing stability and recovery," said Baek Seung-rok, director of the ministry's victim support coordination division. "We will do our utmost in preparations, including building the necessary systems and informing victims, so that the program is implemented without disruption."
