"Empty Can Jeonse, I'll Return Even 50% of the Deposit"…Sim Sang-jung Proposes Special Public Purchase Act

If Returning Rental Deposit Is Difficult
Request Public Purchase of Deposit Return Claims
Claims Priced Fairly at 50~100% of Rental Deposit

Sim Sang-jung, a member of the Justice Party, proposed the "Special Act on the Protection of Tenants of Rental Deposit Non-Return Housing (also known as the Special Act on Public Purchase of Empty Jeonse Houses)" on the 30th, which stipulates the public purchase procedures for empty Jeonse rental houses and provides relief for victims.

At a press conference held at the National Assembly on the same day, Representative Sim introduced a bill that allows tenants who have not received their rental deposit back even one month after the termination of the lease contract, or who face difficulties in recovering the deposit due to auctions, to apply for tenant registration rights and request the public sector to purchase the deposit return claims.

He stated, "Last month, the Korea Research Institute for Human Settlements analyzed financing plans and estimated that if prices fall by just 5% compared to 2017, empty Jeonse houses could reach 15%. If prices drop by 20%, empty Jeonse houses could reach as high as 40%. The housing market, which has been built up through excessive loans, is now at risk of collapse due to the decline in housing prices."

Specifically, the bill proposed by Representative Sim is not limited to victims of Jeonse fraud. The appropriate price of the claim is to be determined by the Claim Purchase Price Deliberation Committee, with the range set between 50% and 100% of the rental deposit. This ensures that even in the worst-case scenario, tenants can recover at least half of their deposit. The bill also includes provisions allowing tenants to move in first if they wish after the purchase process through auctions or other means.

[Image source=Yonhap News]

Representative Sim explained, "Tenants can recover a certain level of their deposit and receive financial support to relocate elsewhere, or after recovering the deposit and receiving financial support, they can reside in the public rental housing at the same property, or directly participate in auctions to purchase empty Jeonse houses." The institution responsible for housing purchases will be the Ministry of Land, Infrastructure and Transport, which may delegate tasks to the Korea Land and Housing Corporation, the Housing and Urban Guarantee Corporation, the Korea Asset Management Corporation, and specially established special purpose corporations.

He added, "Since the national audit, I have argued that the public sector should purchase empty Jeonse houses and utilize them as rental housing to guarantee the housing stability of affected tenants. This is a triple-benefit solution that can increase the supply of public rental housing and serve as a means to prevent a hard landing by adjusting supply during a real estate market downturn."

Separately from the enactment of the law, Representative Sim also urged, "Find ways within policy capabilities to enable public purchases immediately and execute them without delay."