Minister of Land, Infrastructure and Transport Won Hee-ryong is observing the joint special crackdown status by the Ministry of Land and the National Police Agency at the briefing session for tenants affected by jeonse deposit damage held at the Federation of Korean Industries in Yeouido, Seoul on the 22nd. Photo by Hyunmin Kim kimhyun81@
[Asia Economy Reporter Hwang Seoyul] #A (26), who rented a studio apartment under a jeonse lease in April this year, was told by a certified real estate agent in September that the rental deposit insurance had not been subscribed. Although A submitted the application form belatedly, contrary to the agent’s statement that it would take 1 to 2 months from application to issuance, the insurance has still not been subscribed nearly three months later. A said, “There are many scary news reports about ‘Villa King’ and ‘Jeonse fraud,’ and since the insurance subscription keeps being delayed, I feel even more anxious.”
With the issue of jeonse fraud and the mandatory subscription of rental deposit insurance for housing rental business operators, the demand for rental deposit insurance subscription is increasing. However, the period from insurance application to acceptance can take up to three months in some cases. There are also voices claiming that the Housing and Urban Guarantee Corporation (HUG) is severely understaffed compared to the increased workload.
According to the HUG call center on the 30th, the period from application to subscription can take up to three months. According to a HUG call center employee, the time required for issuance varies depending on the subscription route: 2 to 3 months for mobile subscription, 1 to 2 months via Naver, and 2 to 3 weeks at commercial banks. The call center employee said, “Recently, as many news reports related to jeonse have come out, the number of customers making inquiries has increased significantly. Naver subscriptions originally took 1 to 2 weeks, but due to the recent surge in applications, we are providing this guidance.”
As the number of applicants continues to increase along with the number of rental deposit insurance subscribers, the time required for subscription is also lengthening. According to data submitted by HUG to the office of Min Hongchul, a member of the Democratic Party, during the national audit in October, as of August, the number of housing rental business operators subscribed to rental deposit insurance reached a total of 600,781 households, surpassing 600,000 subscribers within two years of the mandatory insurance implementation.
The delay in rental deposit insurance subscription is also increasing tenants’ anxiety. Even if they apply, if the subscription is not completed, the insurance premium is not considered paid, so they cannot receive insurance benefits. On a real estate community site’s bulletin board, a post asking “Is it easy to subscribe to jeonse deposit insurance?” was posted to seek opinions from other users. The author of the post said, “I thought I should get the deposit insurance, so I applied, but I haven’t heard anything for over a week,” and “When I inquired, I was told I might have to wait up to three months.” The author also asked for advice, saying, “Is there any way to expedite the subscription?”
HUG stated that the number of rental deposit insurance applicants and accident cases has surged recently, but the workforce is severely insufficient. According to the public institution management information disclosure system Alio, the total number of new regular employees hired in 2020, when mandatory subscription for rental business operators began, was 48, which is not significantly different from the previous year’s 46. Although hiring increased this year (121), HUG explained that many of these new hires were transferred for other tasks and that the number is still insufficient compared to the increased workload.
A HUG official said, “There are personnel who issue insurance and handle claims when accidents occur, but the workforce is insufficient,” adding, “Since we are subject to government personnel management, it is difficult to voluntarily increase staff.”
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