"Prevent Jeonse Damage"... Gyeonggi-do Establishes Jeonse Damage Support Center and Comprehensive Measures

Gyeonggi Provincial Government Gwanggyo New Office Building

Gyeonggi Province is implementing multifaceted measures, including the establishment and operation of a 'Jeonse Damage Support Center,' to prevent damages such as 'Kkangtong Jeonse' (empty-can Jeonse) fraud.

On the 15th, the province announced its Jeonse damage countermeasures, which include ▲establishing and operating the Jeonse Damage Support Center ▲providing emergency support housing using rental housing from Gyeonggi Housing and Urban Corporation (GH) ▲operating a Kkangtong Jeonse Damage Prevention Counseling Center ▲strengthening education and publicity to prevent Jeonse damage ▲and enhancing real estate market monitoring to strictly respond to illegal activities.

First, by the end of this month, the province will establish the 'Jeonse Damage Support Center' within the Gyeonggi Residential Welfare Center. The center will deploy housing experts, lawyers, and licensed real estate agents to provide comprehensive consultations on real estate law, emergency financial support, and housing assistance. The province will operate a single window system that handles everything from initial consultation to support application in one place.

For victims forced out due to Jeonse damage, the province has secured 309 rental housing units from Gyeonggi Housing and Urban Corporation (GH) that are immediately available for move-in. The rental conditions include no deposit and monthly rent at about 30% of the surrounding market price. The rental period is a minimum of six months, with possible extensions upon agreement. To support residence within the original living area, emergency support housing will be provided using Jeonse rental housing in areas without vacant units.

The province plans to actively promote the 'Kkangtong Jeonse Damage Prevention Counseling Center (consult.kapanet.or.kr),' operated in cooperation with the Korea Association of Property Appraisers, to prevent Jeonse damage. Established in January 2021, the center assigns property appraisers by region where the real estate subject to consultation is located, offering free consultations on the appropriateness of Jeonse and monthly rent agreements.

Last December, the province launched the 'Understanding Kkangtong Jeonse' section on the Gyeonggi Real Estate Portal (gris.gg.go.kr), which is currently in service. Key services include recent housing sales and Jeonse price trends over the past 1-2 years, precautions regarding Kkangtong Jeonse, and guidance on types of Jeonse fraud.

The province is also strengthening education and publicity to prevent Jeonse damage. Since February this year, online educational content covering basic real estate knowledge, contract precautions, and how to safely protect deposits has been provided free of charge on the Gyeonggi Lifelong Learning Portal GSEEK website (www.gseek.kr), targeting young adults and others with limited real estate contract experience. Additionally, Jeonse damage prevention publicity continues through G-Bus TV, media, real estate agencies, and neighborhood meetings.

The province is intensifying monitoring focused on newly built villas with high Jeonse ratios and conducting inspections of suspicious real estate agencies. If illegal activities by licensed real estate agents are confirmed, strict measures will be taken. Furthermore, in cooperation with the Gyeonggi Province Fair Special Judicial Police Unit, a focused investigation into illegal brokerage activities by real estate agents involved in Jeonse fraud will be conducted through the end of this year.

Meanwhile, the province has proposed adding Jeonse fraud victims to the support targets of the Ministry of Land, Infrastructure and Transport’s 'Moving Expense Support for Residents in Abnormal Housing' project. Currently, the ministry’s moving expense support project provides up to 400,000 KRW for moving expenses only to residents of abnormal housing such as small rooms or semi-basements who, after a basic eligibility investigation (housing status, assets, income, etc.) and resident selection process under the ministry’s 'Guidelines for Housing Support for Vulnerable Groups,' are selected to move into public rental housing.

The province also proposed improvements to the 'Housing Price Assessment Criteria' used when subscribing to the Jeonse Deposit Return Guarantee Insurance provided by the Housing and Urban Guarantee Corporation (HUG) at the time of Jeonse contract. Housing price is the basis for determining the deposit amount, making the price assessment criteria important. The current system uses 140% of the publicly announced price and a Jeonse rate (the ratio of Jeonse price to real estate sale price) of 90% as standards (scheduled to be implemented in May 2023) for calculating housing price for Jeonse deposit return guarantee amounts. The province maintains that, as housing prices and Jeonse prices fluctuate continuously, it is necessary to improve the system to calculate housing prices linked to the housing market situation.

Lee Gye-sam, Director of the Gyeonggi Province Urban Housing Office, stated, "Last year, the total guarantee accident amount of the Housing and Urban Guarantee Corporation (HUG) was 1.1726 trillion KRW with 5,443 guarantee accidents, of which Gyeonggi Province accounted for 355.4 billion KRW and 1,505 cases, indicating the large scale of Jeonse damage." He emphasized, "Gyeonggi Province will strive to alleviate housing insecurity for low-income, non-homeowners by providing comprehensive support from consultation to emergency housing, strengthening education and publicity to prevent Jeonse damage, and inspecting illegal activities by real estate agencies."