"1.8 Trillion Won in Kkangtong Jeonse... Occurring Nationwide, Very Concerning"

Attorney Kim Tae-geun, YTN Radio Interview
"Jeonse Fraud Is Not the Tenant's Fault"

"Currently, there is a prediction that about 176 multi-homeowners could face a total of approximately 1.8 trillion won in ‘Kkangtong Jeonse’ (empty-can Jeonse) problems."

Attorney Kim Tae-geun (Chairman of Tenant 114 Steering Committee) explained in an interview with YTN Radio's 'News King Park Ji-hoon' on the 21st, "It is a situation where we can fully expect the so-called ‘Kkangtong Jeonse’ problem to occur this year, 2023." Considering the surge in Jeonse prices due to the low interest rates in 2021, it was predicted that problems would arise this year as the two-year renewal period comes around.

Attorney Kim said, "Situations are continuously occurring across the country, so we are very tense right now, and as far as I know, the government side is also very tense."

[Image source=Yonhap News]

Attorney Kim explained the concept of Kkangtong Jeonse as follows.

"Usually, when house prices drop and the Jeonse deposit cannot be returned, it is commonly called ‘Kkangtong Jeonse.’ In cases of Jeonse fraud, from the beginning, the landlord either does not have the ability or the intention to return the Jeonse deposit. They accept the Jeonse and then invest that money elsewhere, but if they go bankrupt and cannot return it, that is considered Jeonse fraud. For example, in Michuhol-gu, Jeonse deposits have been accepted since 2011. From 2011 to 2022, the total number of affected households is about 3,000. Among them, investigative agencies have confirmed that from 2022, the perpetrators were definitely unable to return the Jeonse deposits, which is the so-called delinquency problem."

Attorney Kim said, "The most serious aspect of the Michuhol-gu Jeonse fraud is that the so-called ‘Construction King’ is the actual owner," and explained, "Despite the existence of senior secured creditors, contracts were made under the belief that it was safe even though they were subordinate, which is the case here."

Attorney Kim said, "The third victim entered a house in 2019 for 72 million won, where a mortgage was established in 2017. Since the mortgage was set before 2018, the priority repayment amount was guaranteed up to 27 million won for amounts under 80 million won," adding, "(However, by increasing the Jeonse deposit) it became 90 million won, exceeding the senior mortgage amount based on 2017, which was 80 million won."

Attorney Kim said, "That is very unfair. Under the laws at that time, small-scale tenants were protected, but since the senior mortgage was established in 2017, going back to that year means they realized they would not receive any of it," conveying the unfortunate situation.

Attorney Kim delivered the following message to tenants.

"To the tenants affected by the Michuhol-gu Jeonse fraud, due to the large number of you, we cannot meet and counsel each of you individually, so I am speaking through this broadcast. We understand very well how difficult this is for you. Many people agree that Jeonse fraud is not your fault, and many citizens and the public are helping. So, although it will take some time, I earnestly ask you to endure strongly."