Beware of Losing Your Deposit... Check Jeonse Information in Advance!

Gyeongnam Province's Efforts to Prevent Damage from Unreturned Jeonse Deposits

Gyeongnam Provincial Government. / Photo by Se-ryeong Lee ryeong@

[Asia Economy Yeongnam Reporting Headquarters Reporter Lee Seryeong] Gyeongsangnam-do has urged tenants to check jeonse information before signing lease contracts to prevent damage from non-return of jeonse deposits.

According to the Korea Real Estate Board, the average jeonse price ratio over the past three months nationwide is 80.1% for apartments and 83.1% for row houses/multi-family houses, whereas in Gyeongnam, the ratios are 81.4% and 86.0%, respectively, exceeding the national average.

The recent three-month jeonse price ratios for apartments in the province are 94.6% in Haman-gun, 93.8% in Sacheon-si, and 93.5% in Changnyeong-gun, indicating that jeonse prices are approaching sales prices.

The recent three-month jeonse price ratios for row houses/multi-family houses are also high, with 85.1% in Masanhwoin-gu, Changwon-si, and 88.9% in Gimhae-si.

A provincial official stated, “These figures greatly exceed the recent three-month auction discount rate of 73.0% in the province,” adding, “There is a high risk of not being able to recover the jeonse deposit if sales prices fall, so it is essential to check the jeonse information of the area before signing a jeonse contract.”

Gyeongnam Province has requested confirmation of three pieces of information before signing contracts: ▲jeonse price ratio ▲guarantee accident status ▲auction winning bid statistics.

The jeonse price ratio is the ratio of jeonse price to sales price, calculated by analyzing actual transaction data of sales and jeonse for apartments and row houses/multi-family houses in the area.

The province explained that it is necessary to check the jeonse price ratio for the past year and the recent three months, and the higher the jeonse price ratio, the greater the risk.

The guarantee accident status refers to statistics on accidents related to the “Jeonse Deposit Return Guarantee,” a product that returns the jeonse deposit on behalf of tenants who cannot recover it after the lease contract ends.

The official emphasized that in areas with frequent guarantee accidents or high accident rates, it is necessary to carefully examine the rights related to the property, surrounding sales and jeonse market prices, and whether the landlord has any tax delinquencies.

After signing the contract, it is also necessary to secure priority repayment rights through lease registration and moving-in registration and to subscribe to jeonse deposit return guarantee insurance, the official added.

Finally, auction winning bid statistics are used as an indicator of the real estate market situation.

When a property is auctioned due to the landlord’s default or bankruptcy, tenants can estimate the amount of deposit they can recover.

According to the province, the recent three-month winning bid rate in Gyeongnam is 73%, which is significantly lower than the national average of 82.7%, 85.2% in the metropolitan area, and 80.1% in non-metropolitan areas, with 62.6% in Uichang-gu, Changwon-si, 62.4% in Geoje-si, and 56.5% in Goseong-gun.

Related statistical information can be downloaded from the Korea Real Estate Board’s Real Estate Tech website, and a separate menu will be established by the end of September to allow easy access for everyone.

Gyeongnam Province announced that from this month, it is conducting guidance and inspections to prevent jeonse accidents by visiting real estate agencies in Gimhae-si and Masanhwoin-gu, Changwon-si, where jeonse price ratios are high.

They also plan to expand inspections by visiting Haman-gun, Sacheon-si, and other areas where jeonse price ratios have recently been high.

Heo Dongsik, Director of the Urban Housing Bureau, said, “It is necessary to check jeonse information before signing a jeonse contract to protect the jeonse deposit, which is equivalent to the residents’ entire property,” and added, “We hope that everyone subscribes to jeonse deposit return guarantee insurance to prepare for jeonse accidents.”

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