Minister of Land: "Considering Additional Measures if No Auction Profit from Jeonse Fraud Housing"

Park Sang-woo, Minister of Land, Infrastructure and Transport, stated on the 25th that he would consider additional measures if no auction profit arises from the houses affected by jeonse fraud. Previously, the government proposed a plan to return the auction profits from the houses affected by jeonse fraud to the victims.

Maeng Seong-gyu, Chairman of the National Assembly Land, Infrastructure and Transport Committee, pointed out at the National Assembly Land, Infrastructure and Transport Committee hearing on support measures for jeonse fraud victims that "there may be cases where no auction profit arises at all, and cases where the profit is smaller than expected." In response, Minister Park said, "The government side will thoroughly review this," adding, "Isn't the reason we gather in the National Assembly to discuss and debate to find alternatives?"

Minister of Land, Infrastructure and Transport Park Sang-woo is responding to questions from committee members at a hearing on support measures for victims of jeonse fraud held on the 25th at the National Assembly Land, Infrastructure and Transport Committee, which was held without ruling party members present. Photo by Kim Hyun-min kimhyun81@

The Ministry of Land, Infrastructure and Transport expects that the auction profits from houses affected by jeonse fraud could range from 30% to 50% of the Korea Land and Housing Corporation (LH) appraisal price. This estimate is based on the fact that the average auction success rate (the ratio of the auction price to the appraisal price) for nationwide row houses and multi-family houses over the past six months is 67.8%.

Minister Park explained, "Although auction profits are not legally defined, based on past experience, profits do effectively occur," and added, "The basic plan proposed is to allow victims to live rent-free for up to 10 years in the existing residence of the jeonse fraud victim purchased by LH at auction, but if the victim no longer wishes to live in the defrauded house, the auction profits will be given directly to the victim."

Opposition lawmakers emphasized the importance of appraising the auction price favorably for the victims to determine the scale of auction profits. This is because if the 'LH appraisal price' that the government intends to use is lower than the court appraisal price, the auction profits received by the victims could decrease.