Seoul City Conducts Inspections of Real Estate Agencies... "Strict Response to Jeonse Fraud"

Intensive Inspection of Newly Built Areas with High Jeonse Prices
Expansion of 'Jeonse Price Consultation Center' to Prevent Empty Jeonse Cases

[Image source=Yonhap News]

[Asia Economy Reporter Onyu Lim] The Seoul Metropolitan Government is launching a focused inspection to preemptively block jeonse fraud that threatens the housing stability of its citizens.

On the 9th, Seoul announced that the city and its 25 autonomous districts will simultaneously conduct on-site guidance and inspections centered on real estate brokerage offices in newly built villa areas.

Recently, as housing prices have continued to decline, cases of damage related to so-called ‘empty-can jeonse’?where the jeonse price is higher than the sale price?have been incessant. In October last year, a man in his 40s named Kim, known as the ‘Villa King’ for renting out over 1,000 villas and officetels in the metropolitan area, passed away, causing a large number of victims to be unable to recover their jeonse deposits.

The Ministry of Land, Infrastructure and Transport announced that among 106 suspected jeonse fraud transactions, the largest number of suspects were 25 lessors, and Seoul accounted for the highest proportion of transaction areas at 52.8%.

Accordingly, Seoul plans to conduct on-site guidance and inspections of real estate brokerage offices, focusing on newly built building dense areas with high jeonse-to-sale price ratios and businesses with frequent complaints, and will respond with a zero-tolerance policy including follow-up investigations or prosecutions for illegal activities.

In addition, they will intensively guide and inspect issues such as ▲signing double contracts ▲posting or advertising false listings ▲omission in preparing real estate rights relations ▲unlicensed or unregistered illegal brokerage ▲excessive receipt of brokerage fees.

Furthermore, to prevent jeonse fraud in preparation for the spring moving season, the city plans to expand the operation of the ‘Jeonse Price Counseling Center,’ which has been in operation since last year, to allow not only online but also on-site applications, thereby enhancing convenience for citizens.

Since jeonse fraud continues to occur mainly in newly built villas where it is difficult to accurately grasp market prices, the city has been operating the Jeonse Price Counseling Center since August last year, providing consultation services on the appropriateness of jeonse prices.

The Jeonse Price Counseling Center is free for any Seoul citizen through the Seoul Real Estate Information Plaza, where certified appraisers, experts in real estate evaluation, directly assess properties such as newly built villas and multi-family houses and inform applicants about the appropriateness of the planned jeonse price.

Meanwhile, Seoul emphasized that citizen reports are crucial during investigations of illegal real estate activities and urged active reporting if related crimes are discovered or if one has suffered damages.

Any citizen can report illegal real estate activities through various methods such as smartphone applications and the Seoul city website, and whistleblowers may receive rewards up to 200 million KRW after review under the 「Seoul Metropolitan Government Ordinance on Protection and Support for Public Interest Whistleblowers」.