"No Need for Landlord Consent on Jeonse Loans"

'Reiterated Explanation on Criticism of "Some Banks Still Require Consent"
"No Landlord Consent Needed, Notification Alone Is Sufficient"'

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[Asia Economy Reporter Kim Hyo-jin] "The landlord's consent is not required at any stage of handling jeonse loans."

The Financial Services Commission (FSC) recently reaffirmed this principle. This is in response to some criticisms that certain banks still require the landlord's consent when extending (new or increased) jeonse loans.

According to financial authorities on the 29th, the FSC stated in a press release on the 27th, "When handling jeonse loan guarantees from the Housing and Urban Guarantee Corporation (HUG) and SGI Seoul Guarantee, the landlord's consent is not necessary and notification alone is sufficient," adding, "Currently, banks do not require the landlord's consent as a condition when handling jeonse loans."

The FSC and the Ministry of Land, Infrastructure and Transport also disclosed this information on the 31st of last month.

The FSC explained, "Recently, some media outlets have reported misleadingly that 'banks continue to verify landlord consent despite it not being required for jeonse loan extensions,' and we would like to clarify this."

The FSC explained that the jeonse loan guarantee institutions conveyed a policy last month to banks instructing them not to obtain landlord consent.

The FSC added, "From the banks' perspective, if the guarantee institutions, who repay on their behalf in case of jeonse loan defaults, do not require consent, there is no reason for banks to continue demanding it."

"We will actively expand notification methods"

Nevertheless, the FSC plans to actively expand notification confirmation methods?such as text messages, mobile messages, and receipt by related parties?to prevent damages caused by landlords refusing to receive notifications.

However, the FSC explained that banks inevitably need to verify the fact of the jeonse contract with landlords to prevent fraudulent loans such as false loans.

In particular, there are cases where the jeonse contract is extended verbally or implicitly without a written contract, making it difficult for banks to manage loans based solely on the tenant's unilateral claim when extending jeonse loans.

However, if the landlord is continuously unreachable and it is difficult to confirm whether the jeonse contract has been extended, the FSC stated that there is a procedure to extend the jeonse loan through individual screening.

This content was produced with the assistance of AI translation services.