Newlyweds in Tears... How the 'Villa King' Deceived Victims

The 'Villa King' Case Owning 1,139 Units... A Typical 'Empty Jeonse'
Tenants Accuse of Embezzling Deposits
Victims Include Youths, New Workers, Newlyweds
Kim's Death Complicates Deposit Return Insurance Process

View of a villa neighborhood from a building in Yangcheon-gu, Seoul, on August 11, 2021. Photo by Moon Honam munonam@

[Asia Economy Reporter Han Seung-gon] Kim Mo, nicknamed the 'Villa King,' who owned 1,139 properties, suddenly passed away last October, leaving tenants who rented houses from him unable to recover their money. The tenants who subscribed to the jeonse deposit insurance do not know when they will receive their money, and there are no heirs of Kim to sue. The victims are truly shedding tears of blood. Some couples have even suffered miscarriages due to extreme stress.

It is reported that about 200 victims have not been able to recover their jeonse deposits. A significant number of the victims had subscribed to the Jeonse Deposit Return Guarantee Insurance provided by the Housing and Urban Guarantee Corporation (HUG). However, HUG has reportedly been unable to proceed with the subrogation process to return the deposits on behalf of the landlord. This is because the landlord, who should be notified of contract termination, has died. Kim has no heirs, and although his parents are alive, they have refused inheritance.

'Villa King' Kim indiscriminately engaged in gap investment around the metropolitan area

Kim was found to have committed fraud against tenants through cunning methods. Many victims had a different landlord at the time of the jeonse contract, but after the contract, the house was sold to Kim.

Tenants could do nothing during the process of the landlord changing to Kim. After settling all matters, Kim later refused to return the deposit, claiming he had no money. Moreover, with over 6 billion KRW in unpaid comprehensive real estate taxes leading to property seizure, tenants are now at risk of losing their deposits.

According to the police and others, Kim purchased more than 1,100 real estate properties in the metropolitan area through so-called 'zero-capital gap investment' and operated a rental business. Having bought properties nationwide without his own capital, Kim is suspected of embezzling tenants' deposits. From 2020 to this year, he acquired villas and officetels mainly in the metropolitan area, owning a total of 1,139 households.

The victims have been struck by a bolt from the blue. Victim A, who moved into Kim's villa after paying a jeonse deposit of 237 million KRW, said in an interview with CBS Radio's 'Kim Hyun-jung's News Show' on the 13th, "After hearing about the death of the Villa King, I asked the investigator in charge, and he said, 'To get the deposit back, you have to proceed against the heir once the heir is determined.' Since it is not yet decided whether the heir will renounce or accept the inheritance, we are just waiting."

Regarding the jeonse deposit insurance, A said, "I considered the HUG guarantee insurance the most important. The landlord (Villa King) promised to subscribe to the rental business guarantee insurance, so I signed the contract. I paid the balance, but when I contacted the landlord, there was no response. When I called HUG, they said, 'It cannot be subscribed due to the landlord's personal debt.'"

About the victims' situation, "I know the landlord owns more than 1,000 houses, so I think there are about that many victims, but our victims' group has only about 450 members. Probably many people don't even know they have been victimized," A said, expressing the unfortunate situation.

She added, "(The victims) are mostly in their 20s and 30s. They are mostly young people, early career workers, or newlyweds. Some have even suffered miscarriages due to severe stress, and others had marriage plans that have now been disrupted. There are many such cases," she said.

View of a villa neighborhood from a building in Yangcheon-gu, Seoul, on August 11, 2021. Photo by Mun Ho-nam munonam@

Concerns over 'Empty Jeonse' nationwide... Red flags already raised, will another 'Villa King' emerge?

The Villa King case is a typical example of an empty jeonse. An empty jeonse refers to a situation where the deposit cannot be returned even if the house is sold. Usually, when the jeonse deposit approaches 80% of the sale price, the risk of empty jeonse is high. In such cases, if the landlord fails to repay loans and the house is auctioned by the court, the auction price often falls below 80% even for apartments, and for villas, the auction price is known to be even lower.

Another problem is that more cases like the 'Villa King' incident may arise. Kwon Mo and his group, who were arrested last September for jeonse fraud after purchasing about 3,400 villas, were also called the 'God of Villas.'

Concerns about empty jeonse can also be confirmed by statistics. According to Seoul City on the 15th, since the city started operating the 'Jeonse Price Counseling Center' in August, a total of 790 consultations were received by the 12th. Excluding cases still under analysis or canceled, 720 cases were analyzed, showing 525 cases as normal (73%) and 195 cases as 'suspicious' (27%). Suspicious jeonse properties are those with inappropriate jeonse prices or excessive mortgage settings, making it highly likely that deposits cannot be recovered. More than 2 out of 10 cases consulted indicate a high possibility of not recovering deposits.

Regarding the rising risk of empty jeonse as the jeonse deposit approaches more than half of the sale price, according to the jeonse rate information provided by the Ministry of Land, Infrastructure and Transport (Real Estate Tech Lease Siren), the average jeonse rate for nationwide row houses and multi-family houses recorded 82.2%, already exceeding the danger level. Seoul's average is 79.9%, and by district, 13 districts including Gangdong (89.5%) and Dongdaemun (80.4%) exceeded 80%. Gwanak (92.7%) surpassed 90%. Incheon (88.7%) has the highest jeonse rate among metropolitan local governments, and Gyeonggi Province averages 82.2%, with 17 municipalities including Bucheon (81.4%) and Pyeongtaek (90.5%) exceeding 80%.

The government plans to actively respond to help victims. On the 11th, Land Minister Won Hee-ryong emphasized on his Facebook post, "We will do our best so that ordinary people do not shed tears due to jeonse damage."

He said, "Because the landlord has died, victims might have worried whether they have to vacate their homes immediately or whether they would become credit delinquents by failing to repay jeonse loans promptly. It must have been overwhelming. Victims can continue to live in their current residences during the several months the inheritance process takes place," he said.

He added, "Jeonse loans can also be extended through the 'Jeonse Loan Guarantee' operated by the Housing and Urban Guarantee Corporation (HUG), Korea Housing Finance Corporation, and Seoul Guarantee Insurance, so there is no need to worry too much for the time being," he said.

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