[Exclusive] Malicious Landlord Who Embezzled Jeonse Deposit, Tracking Hidden Assets as Well

Yoo Kyung-jun Proposes Amendment to Housing and Urban Fund Act
HUG Receives Financial Information on Malicious Landlords
Assists in Exercising Subrogation Rights and Preventing Jeonse Fraud

[Asia Economy Reporter Hyunju Lee] A bill is being promoted that would allow the Korea Housing & Urban Guarantee Corporation (HUG) to request financial institutions to provide the financial information of malicious landlords who habitually fail to return jeonse deposits when HUG exercises its right of subrogation. If this bill passes, it is expected to improve HUG's guarantee capacity by increasing the recovery rate of its claims.

According to the National Assembly on the 16th, Yoo Kyung-joon, a member of the Land, Infrastructure and Transport Committee from the People Power Party, plans to propose an amendment to the Housing and Urban Fund Act on the 17th that includes provisions allowing the confirmation of financial information of malicious landlords who fail to return rental deposits.

Rep. Yoo said, "If this law is passed, HUG will be able to request not only the bank accounts of malicious landlords but also their virtual asset holdings, enabling the exercise of subrogation rights. This will help improve the corporation's asset soundness as well as prevent jeonse fraud."

On the 3rd, victims of jeonse deposit fraud are receiving consultations at the malicious landlord guarantee fulfillment consultation desk at the Seoul Western Management Center of the Housing and Urban Guarantee Corporation in Yeouido, Seoul. Photo by Heo Younghan younghan@

Through the Jeonse Deposit Return Insurance, HUG pays the deposit to tenants if landlords fail to return the jeonse deposit after the lease contract expires, and later exercises its right of subrogation to claim the amount from the landlords. However, under current law, there is no legal basis to verify financial assets such as deposit, savings, and savings balances without the debtor's consent, limiting HUG's ability to recover debts from landlords after paying tenants on their behalf.

Currently, HUG's asset soundness is at a concerning level. Due to jeonse fraud damages and the impact of falling house prices, the total deposits paid by HUG on behalf of landlords over the past year reached 924.1 billion KRW. Of this, HUG recovered only 21% (about 170 billion KRW), resulting in a loss of approximately 700 billion KRW. As the amount of subrogated payments increased, HUG recorded a net loss of about 100 billion KRW last year, marking the first loss in 13 years since 2009.

In particular, the subrogated payment amount last month was 169.2 billion KRW, more than three times the 56.4 billion KRW recorded in July last year. Guarantee accidents also reached a record high with 968 cases and 223.2 billion KRW in guarantee accident amounts, both monthly records.

Yoo Kyung-joon, a member of the People Power Party, is speaking at a meeting on the GTX C Line private investment project and Eunma Apartment held on the 23rd at the Gangnam-gu Community Center in Seoul. Photo by Kim Hyun-min kimhyun81@

With negative forecasts suggesting that HUG's annual subrogated payment amount could soar to around 2 trillion KRW, the passage of this bill is expected to aid in fund recovery. According to the bill, financial information of malicious landlords can be provided, ranging from transaction details of deposits and savings to virtual asset transaction information. This will enable tracking in cases where landlords abscond or attempt to conceal assets by establishing corporations to divert assets. Malicious landlords required to provide financial information are those who have had HUG fulfill guarantee obligations three or more times, or those whose unpaid deposits to HUG exceed 200 million KRW after guarantee obligations have been fulfilled.

Meanwhile, the Land, Infrastructure and Transport Committee held a plenary session the day before and approved an amendment to the Housing and Urban Fund Act that allows the disclosure of personal information of landlords who habitually fail to repay tenant deposits paid by HUG. The disclosure targets are those who have failed to repay a total of 200 million KRW or more in tenant deposits and have failed to fulfill repayment obligations two or more times within three years from the date of subrogation debt occurrence. Additionally, a special law amendment on private rental housing was passed to restrict the registration of rental businesses for jeonse fraud offenders.

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