Even When Reporting 'House Price Collusion,' Punishments Are 'Minimal'... Actual Prosecutions and Final Judgments Account for Only 1%

Real Estate Transaction Disorder Act Violation Reporting Center Received 390 Cases This Year (August)

[Asia Economy Reporter Kim Min-young] It has been revealed that only 1.1% (24 cases) of the total reported cases (2,149 cases) of real estate transaction disorder violations have resulted in prosecution or confirmed judgments.

According to data submitted by the Korea Real Estate Board to Hong Ki-won, a member of the National Assembly Land, Infrastructure and Transport Committee from the Democratic Party of Korea, from February 21, 2020, to August 31, 2022, a total of 4,185 cases were reported to the Real Estate Transaction Disorder Act Violation Reporting Center. Among these, 2,149 cases, accounting for 51.3% of all reports, were suspected of price collusion, while the remaining 2,036 cases involved violations such as unregistered brokerage, brokerage fee violations, preparation of up/down contracts, illegal resale, and fraudulent subscription.

By region, Gyeonggi-do had the highest number with 1,714 cases, followed by Seoul (742 cases), Busan (480 cases), Incheon (379 cases), and Daegu (168 cases).

The problem is that even when such reports are received, cases that actually lead to disciplinary action are extremely rare. Of the 2,149 suspected price collusion reports, only 1,381 proceeded to investigation. Among these, 88.1% (1,217 cases) were dismissed without charges. This means that even if price collusion is suspected and reported, 8 out of 10 cases end with no charges.

Excluding 36 cases currently under investigation or action, only 128 cases (9.2%) are under police investigation (99 cases) or have been sent to prosecution (5 cases). Cases where the prosecution has indicted (13 cases) and received confirmed judgments (11 cases) are rare.

Those who report or accuse real estate transaction disorder violations to the registration authority, investigative agencies, or the Real Estate Transaction Disorder Act Violation Reporting Center before the violation is detected by administrative agencies are entitled to a reward of 500,000 KRW per case. However, the reward can only be paid if the prosecutor decides to indict or suspend prosecution. Although this is intended to prevent mistaken or false reports, it effectively provides little incentive for reporters.

Since March 9, 2021, there has not been a single case where a reward was actually paid for reports received by the Real Estate Transaction Disorder Act Violation Reporting Center.

Assemblyman Hong Ki-won emphasized, "While there is an advantage in being able to report prohibited acts in the real estate market in real-time, the number of cases resulting in confirmed judgments compared to the number of reports is extremely small," and added, "It is urgent to introduce a system that can unify not only the receipt but also the action of reports at the Real Estate Transaction Disorder Act Violation Reporting Center."

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