[Exclusive] Land Ministry Deploys Special Judicial Police...Gains Investigative Power Over Home Price Cartels

Directly Investigating Violations of the Three Laws Under Its Jurisdiction
Cooperation After the Launch of the Real Estate Supervisory Service

The Ministry of Land, Infrastructure and Transport (MOLIT) has secured the authority to directly investigate activities that disrupt the real estate market and has fully deployed four special judicial police officers (Special Judicial Police) since January. This marks a shift from the previous practice of referring cases to the police for investigation, as MOLIT has now begun exercising its own independent investigative powers.

According to MOLIT on February 12, the ministry completed a reorganization of its organizational rules in December last year to grant investigative functions to the Real Estate Consumer Protection Task Force, and from last month it has established a permanent enforcement system that enables direct investigations. This means the organizational overhaul was completed just four months after the government announced the introduction of Special Judicial Police in the September 7 measures last year. The initial plan was to appoint seven officers, but the number was reduced to four during consultations with relevant ministries.

The Special Judicial Police system grants administrative officials investigative powers equivalent to those of the police within a specific scope of duties. In this case as well, it will be operated by designating existing staff members within the Real Estate Consumer Protection Task Force, without new hires. MOLIT is reportedly in the final stage of coordinating detailed work rules to carry out compulsory measures such as search and seizure in accordance with warrant procedures. A MOLIT official said, "We are at the stage of finalizing the work rules following the minister's policy direction," adding, "In addition to personnel for direct investigations, we plan to expand support staff in each division for enforcement operations."

For-sale and jeonse property listing flyers are posted at a real estate agency in Seoul. Photo by Kang Jinhyung

Since its launch, MOLIT's Special Judicial Police have been focusing on violations of three statutes under its jurisdiction: the Act on Report on Real Estate Transactions, etc., the Housing Act, and the Licensed Real Estate Agents Act. Key investigative targets include illegal activities that undermine the soundness of the market, such as price-fixing collusion among homeowners, under- and over-reporting of contract prices, false reporting of actual transaction prices (price-rigging), and fraudulent housing subscription applications.

Previously, even when MOLIT detected suspicious cases, it had no direct investigative authority and had to request investigations from the police. During this process, time was lost due to case transfers and reviews, leading to criticism that the "golden time" for investigations was being missed, for example through destruction of evidence. Even when MOLIT referred cases, responses were often delayed, and the ministry had no authority to press for faster handling, causing many cases to fizzle out. With the activation of the Special Judicial Police, MOLIT is now expected to be able to respond swiftly by immediately opening preliminary inquiries and converting them into full investigations as soon as suspicions are detected.

However, MOLIT's Special Judicial Police can only handle violations of the three statutes under its jurisdiction, which limits their ability to investigate complex crimes such as tracking funds or tax evasion. To address these blind spots, the government will launch the Real Estate Supervisory Service in November this year. The legal basis for this body, the Act on the Establishment of the Real Estate Supervisory Service, was sponsored on February 10 by Kim Hyunjeong, a lawmaker of the Democratic Party of Korea and member of the National Assembly's Political Affairs Committee.

The Real Estate Supervisory Service will serve as a pan-government control tower that integrates and analyzes dispersed information on finance, taxation, and permits and licenses, while also possessing direct investigative powers. In particular, it will have strong investigative authority to access financial information without a court warrant, provided that the request is reviewed and approved by the Real Estate Supervision Council. The number of Special Judicial Police officers to be assigned within the organization is expected to be specified later through a Presidential Decree.

MOLIT's Special Judicial Police will primarily screen out direct illegal activities in the real estate market, while the Real Estate Supervisory Service will take on investigations requiring financial tracking, such as complex analyses of funding sources or suspected tax evasion, thereby dividing roles between the two bodies. If MOLIT discovers suspected violations that fall outside its jurisdiction during an investigation, it will transfer those cases to the Real Estate Supervisory Service.

A MOLIT official said, "MOLIT will investigate primary suspected violations identified through market monitoring, and for violations outside our jurisdiction or highly sophisticated, intelligent crimes, we will cooperate with the Supervisory Service once it is launched."