Police Refer Three Women to Prosecution for Failing to Return Jeonse Deposits After Purchasing Over 500 Gap Investment Properties

[Asia Economy Reporter Lee Jung-yoon] A mother and her two daughters, who were accused of buying around 500 villas in the Seoul metropolitan area and failing to return the tenants' jeonse deposit, have been referred to the prosecution.

According to the police on the 20th, the Seoul Metropolitan Police Agency's Violent Crime Investigation Unit sent mother Kim (57) and her two daughters (33 and 30) to the prosecution without detention earlier this month on charges of fraud and violation of the Real Name Real Estate Act.

They are accused of purchasing villas through "gap investment," buying houses with jeonse deposits in the Seoul Gangseo-gu and Gwanak-gu districts as well as the metropolitan area since 2017, and failing to return deposits to about 50 people. When the two daughters first registered as rental business operators in 2017, they owned only 12 houses, but by 2019, the number had increased to 524.

Most of the victims are known to be young workers and newlyweds. It was also reported that none of the properties were enrolled in the "Jeonse Deposit Return Guarantee Insurance," a system where the Korea Housing & Urban Guarantee Corporation (HUG) pays the deposit on behalf of the landlord if they refuse to return the jeonse deposit.

The mother and daughters reportedly suggested tenants, whose jeonse contracts were about to expire, to "buy the house" because it was difficult to return the deposit, thereby transferring ownership.

During the police investigation, the three women strongly denied the charges and stated that they had the ability and intention to return the jeonse deposits. The police began investigating after becoming aware of the case around March last year and booked the three women.