South Korea to guarantee one-third of lease deposits for Jeonse fraud victims

The South Korean government has approved an amendment to the Special Act on Support for Jeonse Fraud Victims and Housing Stability, aimed at ensuring victims recover at least one-third of their lease deposits. Starting November 13, a ‘minimum guarantee system’ will provide support to cover the shortfall if the amount recovered through auctions or public sales is less than one-third of the original deposit.

For victims of trust-related fraud, a ‘pre-payment and post-settlement’ system will be introduced. This allows for the advance payment of funds before the conclusion of auction or public sale processes, with final adjustments made once the total recovered amount is determined. The Korea Land and Housing Corporation (LH) has been commissioned to manage the application, payment, and settlement processes.

The government has allocated 84 billion won for these measures. Existing victims are also eligible to apply retroactively. To ensure efficiency, LH must notify applicants of the payment decision within 90 days of receiving an application. The amendment also establishes procedures for returning funds if a victim later recovers their deposit, with potential fines of up to 30 million won for non-compliance.