LH "Significantly Easing Requirements for Multi-Family Home Purchases to Prevent Jeonse Fraud"

Changed from 'All households in multi-family housing must be victims and agree' to
'At least 2 victims must occur and all victims must agree'

Korea Land and Housing Corporation (LH) has significantly relaxed the housing purchase requirements to support victims of jeonse fraud living in multi-family houses.

On the 22nd, LH announced that for multi-family houses, if two or more residents are determined to be victims of jeonse fraud and all victims agree, they can apply for prior consultation to enable the purchase. Previously, the entire households in a multi-family house had to be determined as victims and all had to agree for the purchase to be possible.

Under the Special Act for Supporting Jeonse Fraud Victims, LH acquires the priority purchase rights for auctioned properties from victims and uses these rights to purchase the victimized houses or utilizes public rental housing it holds to provide housing support. The priority purchase right allows the holder to buy the property at the highest bid price of the auction winner. However, due to the structure of multi-family houses where individual registration is impossible and the complex rights relationships, it is difficult to utilize victims’ priority purchase rights and to delay auctions. This has been considered a major blind spot in support measures.

With this new measure, if two or more households are determined as victims of jeonse fraud and all victims except other tenants agree, LH can purchase the property. When LH purchases the victimized house, it guarantees the housing rights not only of the jeonse fraud victims but also of existing tenants. Existing tenants can sign a temporary use contract regardless of asset or income criteria and live for up to two years at about 50% of the market rent if they wish.

Multi-family houses that include legally used neighborhood living facilities or semi-basement units are also included in the purchase targets. These spaces will be used as community facilities after purchase. Tenants living in semi-basement units will be relocated to vacant units on the upper floors of the same house or nearby public rental housing to upgrade their housing. However, neighborhood living facilities illegally converted for residential use are excluded from purchase.

The 'jeonse rental' system, where LH signs a lease contract with the owner and subleases the property if the victim finds a private rental housing they want, will also be expanded. This system can be used when a third party, not LH, wins the auction but the victim wishes to continue living in the property, or when there is a shortage of public rental housing available for immediate move-in.

Victims of trust fraud (invalid lease contracts) and commercial villa (illegal buildings) who find it difficult to have their victimized houses purchased will also be supported through public rental housing supply or the jeonse rental system.

Previously, applications for prior consultation on purchases were only accepted through LH regional headquarters. Now, applications can also be submitted at regional jeonse victim support centers (HUG and local governments). Procedures will be improved by simplifying required documents and omitting internal reviews to quickly supply public rental housing when house purchase is difficult.

Ko Byung-wook, head of LH’s Housing Welfare Headquarters, said, “We expect this expanded housing support plan for victims to help many who have been in blind spots,” and added, “We will continue to actively listen to victims’ opinions and steadily improve the system.”

For more details on LH’s housing support measures for victims, including the purchase of jeonse fraud victim houses, please refer to the ‘Integrated Announcement on Jeonse Fraud Victim House Purchase’ on the ‘LH Subscription Plus’ website.

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