Minister of Land Proposes Veto on Special Law for Jeonse Fraud with "Pre-Notification and Post-Collection"

The government announced that it will recommend exercising its veto power after the National Assembly plenary session passed the amendment to the "Special Act on Support for Jeonse Fraud Victims and Housing Stability" (Jeonse Fraud Special Act), which is centered on 'prior relief and subsequent recovery.'

Minister of Land, Infrastructure and Transport Park Sang-woo is announcing the government's position on the passage of the amendment to the Special Act on Jeonse Fraud at the plenary session on the 28th at the Government Seoul Office. / Photo by Yonhap News

On the afternoon of the 28th, Park Sang-woo, Minister of Land, Infrastructure and Transport, issued a statement at the Government Seoul Office, saying, "If the amendment is sent to the government, we will propose a request for reconsideration (veto) of the bill as stipulated in the Constitution of the Republic of Korea."

The amendment was passed in the National Assembly plenary session that day, led by the Democratic Party of Korea. It was approved with 170 votes in favor out of 170 members present. The People Power Party did not participate in the vote. Previously, the amendment was directly submitted to the plenary session in February through a sole resolution by the Democratic Party.

Minister Park emphasized, "The amendment is difficult to properly enforce, and there are legal issues as well as concerns that the burden may be shifted to other citizens. We express deep regret over the unilateral handling and clearly state that it is difficult to accept."

The Ministry of Land, Infrastructure and Transport has opposed the amendment, citing that the rights relationships of houses involved in Jeonse fraud are complex, making fair value assessment difficult, and that unnecessary disputes may arise between the public and victims over the purchase price of claims. The amendment stipulates that if victims apply for public purchase of their Jeonse deposit return claims, the claim purchasing institution must conduct a 'fair value assessment.' The purchase funds will utilize the Housing and Urban Fund.

Minister Park expressed concern, saying, "The Housing and Urban Fund, which is the source of direct deposit compensation, was created from subscription savings accounts that low-income, homeless citizens have saved to purchase their own homes. If victims are directly supported with money temporarily entrusted by the public, the loss will be borne entirely by other citizens."

He added, "Although it may seem that relief will be provided immediately once the amendment passes, that is not the case. The government will continue to consult and communicate with the National Assembly to ensure that Jeonse fraud victims can restore their daily lives through support measures that are practically helpful to victims and can be implemented promptly."

The government proposed a plan the day before to counter the opposition party’s forced passage of the amendment, whereby the Korea Land and Housing Corporation (LH) would purchase Jeonse fraud victim houses at auction and supply them as public rental housing while supporting rent payments. The method returns the auction profit (LH appraised value minus auction winning bid) to the victims. If rent support is difficult with auction profits, the government will inject fiscal resources.