Gyeongnam Province Invests 190 Million Won to Support Jeonse Fraud Victims

HUG Reports from January to April: 31 Cases and 7.24 Billion KRW in the Province

Gyeongsangnam-do continues its support and prevention activities to assist victims of jeonse fraud within the province.

According to Gyeongnam Province on the 31st, from January to April this year, there were 31 reported guarantee accidents to the Housing and Urban Guarantee Corporation (HUG) within the province, with the accident amount reaching 7.24 billion KRW.

From April 3 to May 30, the Gyeongnam Jeonse Damage Support Center received 129 related consultations, 9 jeonse damage reports, amounting to 695 million KRW.

Among them, damage confirmation certificates were issued for three cases totaling 195 million KRW: 50 million KRW in Tongyeong-si, 55 million KRW in Masanhappo-gu, Changwon-si, and 90 million KRW in Jinhae-gu. Two cases were withdrawn, and four cases are under review.

Heo Dongsik, Director of the Urban Housing Bureau of Gyeongnam Province, is announcing support and prevention policies for victims of jeonse fraud.
[Photo by Lee Seryeong]

On this day, Gyeongnam Province held a briefing and announced that it will invest a budget of 190 million KRW to support jeonse victims who have not received all or at least 30% of their jeonse deposit without justifiable reasons despite the deposit return deadline having passed.

The budget includes 80 million KRW for jeonse deposit return guarantee insurance premium support, 10 million KRW for emergency housing rent support, and 100 million KRW for low-interest loan interest support.

The province will first support low-interest loans with interest rates ranging from 1.2% to 2.1% for victims who have received a jeonse damage confirmation certificate through the Jeonse Damage Support Center and need to move to a new jeonse residence.

Loans can be applied for at Woori, Shinhan, Kookmin, Hana, and Nonghyup banks, and Gyeongnam Province will cover the loan interest that tenants must pay.

For those wishing to remain in their existing jeonse residence, low-interest refinancing loans are available, and interest-free loans are provided to eligible groups such as basic livelihood security recipients, single-parent families, and near-poverty class.

For residents requiring urgent housing support, LH public rental housing will be offered for a period ranging from 6 months up to 2 years without a deposit and at rent within 30% of the market price.

Regarding jeonse victim applications and reception, the province plans to quickly investigate the damage facts in cooperation with city and county offices and request the Ministry of Land, Infrastructure and Transport’s Jeonse Fraud Victim Support Committee to designate victims of jeonse fraud.

To prevent damage, the ‘Gyeongsangnam-do Real Estate Information Portal Service’ will be launched on July 1.

This service will provide access to advanced local real estate prices, jeonse price ratios, and jeonse damage status through a business agreement signed with KB Kookmin Bank on the 23rd.

The province will fully support the insurance premiums for jeonse deposit return guarantees for non-homeowners with a median income of 180% or less who have signed lease contracts with jeonse deposits of 200 million KRW or less, aiming to increase guarantee insurance subscription rates.

This is to prevent incidents related to jeonse deposit returns caused by the reverse jeonse phenomenon, where housing prices fall below the jeonse deposit.

Real estate transaction accident prevention education will be conducted for licensed real estate agents in the province, along with regular and special inspections.

For tenants designated as victims of jeonse fraud under the special law, the following support is provided: ▲interest-free installment repayment of existing unpaid jeonse loans for up to 20 years ▲exemption from delinquency information registration for 20 years ▲interest-free loans of priority compensation for up to 10 years ▲application for suspension or postponement of auction or public sale of the relevant house ▲priority purchase rights ▲tax benefits such as acquisition tax and property tax reductions ▲policy loans for home purchase funds ▲auction agency services and 70% support for agency fees ▲provision of public rental housing for existing leased homes.

Even invalid contracts made with unauthorized landlords, such as in trust fraud cases, are eligible for financial support and emergency welfare support under the special law.

A provincial official urged, “To avoid becoming a victim of jeonse fraud, it is essential to thoroughly understand the entire jeonse contract process and to enroll in jeonse deposit return guarantee insurance.”

For newly built villas, officetels, and small apartments, it is advised to first check whether collateral trust has been established. If the property is trust real estate, even with the trust company’s consent, returning the deposit may be difficult, so it is recommended to keep the deposit low or opt for monthly rent contracts.

If illegal brokerage activities such as unregistered or unqualified brokerage are suspected, residents are advised to contact the ‘Illegal Brokerage Reporting Center’ autonomously operated by the Gyeongnam Licensed Real Estate Agents Association.

Heo Dongsik, Director of the Urban Housing Bureau, said, “We sincerely empathize with the suffering of jeonse victims and will actively support them to restore their daily lives. We will create a real estate transaction environment that safely protects the valuable jeonse deposits and focus our efforts on supporting and preventing jeonse damage in line with government policies.”