LH Jeonse Lease: 76.3 Billion KRW in Deposits Lost Over the Past 5 Years

LH Jeonse Rental Deposit from 2019 to 2023
763 Billion Won Not Recovered from 1,952 Households

Korea Land and Housing Corporation (LH) revealed that as of August, the deposit paid on behalf of tenants but not refunded from 2019 to 2023 amounted to 76.3 billion KRW. Similar incidents have been repeatedly occurring at LH due to the aftermath of rental frauds involving non-apartment properties such as villas and officetels.

On the 8th, Jeon Yong-gi, a member of the National Assembly’s Land, Infrastructure and Transport Committee from the Democratic Party, disclosed this based on data received from LH. A total of 1,952 households have not received their deposits back. This represents about 30% of the initial unreturned deposit amount of 245.4 billion KRW (4,942 households) that has not been recovered as of last August.

In particular, the largest amount of unreturned deposits was from incidents that occurred last year. The scale of incidents last year was 100 billion KRW (1,727 households), of which only 38.6 billion KRW (499 households) has been recovered.

When such deposit non-refund incidents occur, LH initiates legal procedures to recover the deposits. If the incident was caused by the landlord’s death, bankruptcy, or reverse jeonse due to market price drops, LH proceeds with tenant’s rights registration for jeonse deposit claims and lawsuits. In cases where the incident was caused by the tenant, such as property damage, unpaid management fees or rent, or unauthorized moving out affecting the tenant’s legal standing, LH issues payment orders or recovers the deposit through litigation.

Assemblyman Jeon said, "Tenants living in jeonse rental housing may face inconveniences as their movements are restricted during the deposit refund process. Considering that these tenants are vulnerable groups such as youth and low-income households, LH needs to prepare more fundamental countermeasures."

Meanwhile, LH’s jeonse rental housing is a program where LH signs jeonse contracts with landlords targeting youth aged 19 to 39, then subleases the housing at affordable rates. In the Seoul metropolitan area, LH supports deposits up to 120 million KRW, and the tenant pays a tenant burden fee of 1 to 2 million KRW and an annual LH support fee of 1% to 2% as rent. Tenants can reside for up to 10 years.