[Jeonse Living ABC] Increasing 'Jeonse Right Registration' in Jeonse Fraud... Tips for Self-Registration?

Editor's NoteThe so-called ‘Villa Kings’ have caused a surge in jeonse fraud cases, increasing tenants' anxiety. However, the jeonse system remains one of the main lease contracts in Korea. Asia Economy delivers practical legal knowledge and information tenants need to know while living under jeonse through a series titled ‘Jeonse Living ABC’ in collaboration with Attorney Koo Min-su (NH Investment & Securities Real Estate Asset Management).

As jeonse fraud cases continue, more tenants are seeking stronger legal measures to protect their deposits. In particular, many tenants who find the fixed date certificate and tenant’s priority rights insufficient are registering a 'jeonse right' (jeonse lien). According to the Supreme Court’s Registry Information Plaza on the 15th, the number of jeonse right registrations last month was 5,941, an increase of 1,096 cases (22.6%) compared to the previous month (4,845 cases). Registering a jeonse right means recording the fact that one is a jeonse tenant on the certified copy of the registry. This allows for faster execution of auctions and priority repayment of the jeonse deposit over subordinate rights holders and other creditors.

How to Register a Jeonse Right from the Landlord?

Attorney Koo Min-su advises that tenants should inform real estate agents from the beginning that they are looking for a property where jeonse right registration is possible. Since registering a jeonse right requires a joint application from both the tenant (jeonse right holder) and the landlord (jeonse right registrant), it is impossible without the landlord’s consent.

Regarding preparations for jeonse right registration, it is necessary to include the landlord’s consent as a special clause in the jeonse contract when drafting it. A simple statement such as ‘The landlord agrees to the registration of the jeonse right’ is sufficient. Preparations must be completed before the move-in date, including paying the registration application fee (KRW 15,000 per case, KRW 13,000 if applied online) and the registration license tax (0.02% of the jeonse deposit) online, and preparing the registration application form to submit to the registry office. Using the Supreme Court’s online registry e-FORM platform, applicants can sequentially enter required information or use linked pages to easily complete the application and payment process. There is no need to entrust this to a judicial scrivener just because it seems difficult.

Then, on the start date of the jeonse contract, when paying the remaining jeonse deposit, the tenant obtains the landlord’s signature or seal on a pre-prepared power of attorney. The power of attorney summarizes that ‘The tenant applies for registration as the jeonse right holder of this property, and the landlord delegates the registration application authority to the tenant.’ When completing the registration application form using the e-FORM platform mentioned earlier, the power of attorney is also prepared simultaneously, so it only needs to be printed out.

Is Jeonse Right Registration Always More Expensive than Deposit Insurance?

Jeonse right registration is often perceived as more expensive than the Housing and Urban Guarantee Corporation (HUG)’s jeonse deposit insurance because it usually involves paying a judicial scrivener for registration application and the registration license tax. However, considering that the tenant’s right to request contract renewal under the Housing Lease Protection Act effectively extends the lease period from 2 years to 4 years, it is worth noting that if the jeonse right registration is handled directly as a ‘self-registration,’ the total cost can be lower than renewing deposit insurance every 2 years.

Moreover, there are cases where tenants cannot subscribe to deposit insurance due to exceeding the coverage limit, making jeonse right registration a viable alternative. If, in the future, policies are implemented to charge only a small fixed registration license tax instead of a proportional one for jeonse deposits below a certain amount, the cost burden would decrease significantly, greatly benefiting tenant protection. Before heading to the registry office for jeonse right registration on moving day, tenants should not forget to report their move-in at the community service center and obtain a fixed date certificate for the contract.