[Exclusive] Presidential Office Reviews Measures to Eradicate 'Villa King' with Licensed Real Estate Agents Association

Presidential Office Calls Real Estate Agents Association to Discuss Jeonse Fraud Measures
Focus on Establishing Early Warning System Beyond Punishment and Compensation

[Asia Economy Reporter Baek Kyunghwan] The Presidential Office has confirmed that it reviewed measures with licensed real estate agents to preemptively block jeonse fraud incidents like the 'Villa King' case. This is a follow-up action following President Yoon Seok-yeol's directive to establish protection measures for victims of jeonse fraud.

According to the Presidential Office on the 9th, on the 6th, key officials from the Korea Association of Licensed Real Estate Agents were summoned to the Yongsan Presidential Office building to assess the market's perspective on resolving the jeonse fraud situation. The meeting discussed measures to prevent fraud in advance, including punishment and compensation for damages, and also addressed the causes of the nationwide occurrence of jeonse fraud. A Presidential Office official explained, "While detailed measures are being initiated by relevant ministries, since preventive measures are also necessary, the intention was to first listen to voices from the field."

[Image source=Yonhap News]

On that day, the Presidential Office received proposals from on-site licensed real estate agents regarding granting them authority for crackdowns and other enforcement actions. Since the enactment of the Real Estate Brokerage Act, which introduced the licensed real estate agent system, licensed agents had been responsible for cracking down on market disruption activities in the real estate brokerage market. However, with the 1998 amendment of the Real Estate Brokerage Act aimed at regulatory reform, these powers were transferred to local governments. The association reportedly conveyed to the Presidential Office that "if the association, which operates systematically and organizationally on a nationwide scale, can be utilized to legally manage and supervise licensed real estate agents and brokerage workers, incidents like the second and third Villa King cases can be prevented in advance."

The government as a whole plans to further discuss additional measures to block jeonse fraud together with licensed real estate agents. In political circles, there is also talk of elevating the Korea Association of Licensed Real Estate Agents to a statutory body to grant them enforcement authority. A related amendment bill was already proposed by Kim Byung-wook, a member of the Democratic Party of Korea, but it has been pending in the Land, Infrastructure and Transport Committee for several months.

The market expects that some degree of self-regulation will become possible with the elevation of the Korea Association of Licensed Real Estate Agents to a statutory body. The related bill includes a provision requiring newly licensed real estate agents to mandatorily join the association. Through this, ethical regulations will be strengthened, and if members violate laws, administrative sanctions can be requested from the mayor/provincial governor and registration authorities. Additionally, for licensed real estate agents who intentionally cause real estate brokerage accidents, measures such as restricting subscription to indemnity insurance for accident prevention may be introduced, along with further revisions to the liability indemnity system. However, concerns about potential side effects such as abuse of authority by granting them enforcement powers will also be reviewed.

The Presidential Office conveyed that relevant ministries and agencies will proceed with establishing detailed measures. Since President Yoon officially instructed twice last month to "review the Villa King case" and "resolve jeonse fraud," measures regarding punishment, compensation, and a pre-warning system are expected to be announced soon. The Ministry of Economy and Finance's recent consideration of allowing tenants to view landlords' national tax arrears without separate consent starting in April is in line with this context. A Presidential Office official stated, "Since jeonse fraud is a crime targeting ordinary citizens, relevant ministries will unite to ensure strong punishment and maximum compensation," adding, "It is also important to review the market's voices to prepare various plans to prevent the recurrence of the same incidents."