[2020 National Audit] Cases of Foreign Landlords Defaulting on Jeonse Deposits Surge

[Asia Economy Reporter Yoo In-ho] It has been revealed that incidents of foreign landlords in Korea failing to return jeonse deposits to tenants are occurring repeatedly.

According to data submitted by HUG on the 19th to So Byung-hoon, a member of the National Assembly Land, Infrastructure and Transport Committee from the Democratic Party of Korea, an analysis of the current status of foreign jeonse deposit return guarantee accidents shows that a total of three incidents have occurred so far.

Foreign rental business operator Mr. K failed to return a total deposit of 110 million KRW, and HUG made a subrogation payment on behalf of Mr. K, but HUG has not yet recovered the amount. Accordingly, HUG plans to take measures such as seizing assets owned by Mr. K in Korea, but if Mr. K does not repay and flees overseas, there is no way to recover the funds.

In particular, the number of foreign rental business operators, which was only 1,974 in 2018, has gradually increased to 2,448 as of June this year.

In this situation, urgent measures are needed to prevent damages that may occur when foreigners conducting rental businesses in Korea fail to return tenants' deposits and flee overseas.

Regarding countermeasures, Assemblyman So said, “When foreigners purchase housing in Korea, regardless of the price or location of the housing, they should be required to submit a housing fund procurement plan,” and “When foreigners rent out houses, even if they are not registered rental business operators, they should be required to subscribe to jeonse deposit return guarantee insurance, and measures such as travel bans should be established immediately after an incident to prevent fleeing overseas.”

He added, “To prevent not only foreigners but also rental business operators from failing to return tenants' deposits and fleeing overseas, the law should be amended so that travel bans and other measures are promptly implemented immediately after a report of deposit non-return is received.”