[Jeonse Fraud, Aftermath] ② 'Special Law Supplement' Parliament Still Discussing... "Need to Expand Victim Scope and Support"

Last May, the government and the ruling and opposition parties enacted the "Special Act on Support for Jeonse Fraud Victims and Housing Stability (Jeonse Fraud Special Act)" to assist victims of jeonse fraud and announced plans to supplement the legislation every six months after its implementation. However, even after the special act came into effect, victims of jeonse fraud point out that recovery and relief efforts have not been properly carried out. There are calls to expand the scope of victim recognition and strengthen support to enhance the law's effectiveness.

Jeonse fraud victims are marching on the street. [Image source=Yonhap News]

The National Assembly's Land, Infrastructure and Transport Committee held plenary and subcommittee meetings on the 5th and 6th to discuss amendments to the Jeonse Fraud Special Act. According to the Ministry of Land, Infrastructure and Transport, as of the 30th of last month, 9,109 cases have been recognized as victims, 928 cases were rejected due to unmet requirements, and 658 cases were excluded from victim recognition because self-recovery was possible. The Jeonse Fraud Special Act, which was fully implemented on June 1, was created to support tenants who suffered from jeonse fraud by granting special provisions related to auction procedures and tax collection, thereby promoting housing stability. In particular, the government and the National Assembly promised to supplement the legislation every six months along with the enactment of the special act. Since jeonse fraud is an ongoing issue, the intention was to continuously investigate the situation after the law's implementation and amend or supplement it if blind spots arise.

As the promised six months have passed, victims are urging for system improvements. On the 7th, victim groups such as the National Countermeasures Committee for Jeonse Fraud and Empty Jeonse Victims held a press conference in front of the National Assembly main gate, demanding, "Please prepare effective measures to immediately rescue victims who are pushed to the edge of a cliff." The victim groups proposed ▲introducing a pre-relief and post-recovery plan ▲relaxing victim recognition requirements ▲establishing a plan for bulk purchase and housing stability for properties in blind spots ▲suspending eviction of trust fraud victim houses and postponing auction procedures for houses whose claims have been transferred to loan companies ▲intervening in issues such as power and water cutoffs, safety, and facility management of neglected victim houses.

Experts also believe that the current special act needs to be supplemented to effectively support victims. Professor Lim Jaeman of the Department of Real Estate at Sejong University said, "The scope of victim recognition is narrow, but the biggest problem is that even recognized victims lack substantial relief measures," adding, "Among the victim support measures are loan refinancing and granting priority purchase rights, but each program originally existed with its own conditions, so there are limitations." For example, low-interest refinancing loans for jeonse fraud victims require an annual income of 130 million KRW or less. The 'Didimdol Loan,' which supports victims in purchasing auctioned houses or new homes, requires a combined annual income of 70 million KRW or less for couples, net assets of 506 million KRW or less, and that the applicant be a household without homeownership. Professor Lim said, "Even if recognized as victims, some cannot receive support due to product conditions," and added, "Since the law is about victim support, if the victim is recognized, support such as loans should be designed to be naturally accessible rather than trying to fit victim support into existing products."

There are also opinions that the scope of victims under the special act should be expanded. The current special act classifies victims as those who meet four conditions: ▲having completed resident registration at the housing, holding a confirmed date on the lease contract certificate, ▲having a deposit of 300 million KRW or less (adjustable up to 200 million KRW depending on city/province conditions), ▲where the landlord fails (or is expected to fail) to repay deposits to multiple tenants, and ▲where there is landlord fraud or an investigation has been initiated against the landlord. Those who meet some of these conditions are classified as 'victims, etc.' Kim Yerim, lead attorney at Law Firm Simmok, said, "Clients with high deposit amounts face difficulties in receiving relief even if they suffer damages," and added, "It is necessary to realistically expand the scope of victims by relaxing deposit requirements to the median jeonse prices in Seoul."

There were also claims emphasizing the importance of securing the budget necessary for restoring jeonse fraud damages. Professor Kim Jewan of Korea University Law School said, "This is not a law about how to support victims who have already suffered, but it depends on how much budget is secured," emphasizing, "Securing a budget is important to properly implement existing systems under the current law, such as the government purchasing jeonse fraud victim houses."

However, the ruling and opposition parties have not reached an agreement on the supplementary legislation. The biggest issue is the 'pre-relief and post-recovery claim.' This plan involves public institutions purchasing the deposit return claims of victim tenants to first provide relief, then recovering the funds through auctions or from landlords. The opposition party is pushing for 'pre-relief and post-recovery claim.' Min Hongchul, a member of the Democratic Party, argued, "Pre-relief should come first for victims who have already suffered," adding, "Currently, victims who are in debt have to incur more debt under the legal structure."

The ruling party raises concerns about fairness. There is significant opposition to using taxes to compensate for debts arising from private contracts in individual fraud cases. Kim Jeongjae, a member of the People Power Party, said, "While I want to help victims, due to fairness issues, it is not right for the government to repay debts arising from private contracts with taxpayers' money." The government also takes a cautious stance. At the bill subcommittee meeting held on the 6th, Kim Ohjin, the first vice minister of the Ministry of Land, Infrastructure and Transport, said, "There are many considerations and social consensus is required," adding, "We will continue to find measures that victims can feel."