Ruling Party Lawmaker Kim Hyunjung Proposes Real Estate Supervisory Agency Act...“Investigations of Illegal Acts Without Warrants”

Control Tower for Cracking Down on Illegal Real Estate Activities
Abnormal Deals Such as Underreported Contracts and Illicit Gifting Account for 10%

On February 10, Democratic Party of Korea lawmaker Kim Hyunjung proposed the “Act on the Establishment and Operation of the Real Estate Supervisory Agency,” which would comprehensively oversee and supervise illegal activities in the real estate market.

The core of the bill is to dismantle silos between ministries by establishing the Real Estate Supervisory Agency as an independent body under the Office of the Prime Minister. Until now, eight ministries and agencies, including the Ministry of Land, Infrastructure and Transport, the Ministry of Justice, the Ministry of the Interior and Safety, the Financial Services Commission, the Ministry of Economy and Finance, the National Police Agency, the National Tax Service, and the Personal Information Protection Commission, have each carried out fragmented crackdowns on illegal activities in the real estate market. Going forward, the Real Estate Supervisory Agency, as the control tower, is intended to track even blind spots that are difficult for individual ministries and agencies to handle.

At a press conference held at the National Assembly Press Center on the same day, Assemblywoman Kim said, “In reality, there are 700,000 real estate contracts per year, and 86,000 of them, more than 10 percent, are abnormal transactions,” adding, “The Ministry of Land, Infrastructure and Transport has been extracting abnormal transactions such as underreported contracts, illicit gifting, and misappropriation of corporate funds and notifying the relevant ministries and agencies of suspected violations, but there has been a limitation in that there was no feedback.”

Kang Junhyun, the ruling party's ranking member on the National Assembly's Political Affairs Committee, and Kim Hyunjung, along with other Democratic Party committee members, are holding a press conference at the National Assembly Press Center on the 10th to propose the Real Estate Supervisory Agency Act. Photo by Yonhap News

The Real Estate Supervisory Agency would be able to request financial transaction and credit information without a warrant at the administrative investigation stage, thereby enhancing the effectiveness of tracking funds. Investigative and enforcement powers as judicial police officers would also be granted to the agency’s staff. However, when an investigation is upgraded to a criminal investigation, they would be required to obtain a warrant.

Assemblywoman Kim said, “The authority to request personal information is also granted, based on the Real Name Financial Transactions Act, to the Financial Services Commission, the Financial Supervisory Service, and the Korea Deposit Insurance Corporation,” adding, “We have made it mandatory to undergo prior deliberation by the Real Estate Supervision Council before requesting information, to request only the minimum necessary data, and to stipulate that any information used must be destroyed immediately after one year.”

The Real Estate Supervision Council is a body that coordinates between the Real Estate Supervisory Agency and the eight ministries and agencies. The council will be composed of up to 15 members, including the head of the Real Estate Supervisory Agency, who is a Grade-1 senior civil servant, senior officials from the eight ministries and agencies, and five experts appointed by the Minister for Government Policy Coordination. The council will be chaired by the Second Vice Minister for Government Policy Coordination.