Concerns Over Planned Real Estate and Bait Listings Amid General Elections... "Report If Suspicious"

Concerns are growing over speculative real estate schemes exploiting regional development pledges ahead of the recent general elections. These cases vary, including selling land by promoting it as highly profitable using nearby regional development prospects or false/unconfirmed development information, and guiding buyers to normally developable land but contracting for land with no value.

A view of a licensed real estate office in Seoul / Photo by Yonhap News

The Ministry of Land, Infrastructure and Transport urged caution against false and exaggerated advertisements such as speculative real estate and bait listings ahead of the general elections and the spring moving season. It also announced on the 26th that it will operate a focused reporting period for suspected illegal cases from the 27th until June 30th.

Speculative real estate generally refers to companies or transaction types that deceive buyers by selling land that is difficult to develop and economically worthless as if it were highly developable land. Typically, it involves dividing plots or shares into amounts affordable for ordinary citizens (around 10 million to 50 million KRW), causing widespread harm to many small investors, making it a crime affecting the livelihood of the public.

In fact, last year, the proportion of land transactions involving less than 10% shares in areas difficult to develop, such as greenbelt zones, water source protection areas, and military facility protection zones, among land classified as rice paddies, fields, and forests, was about 1.43%. To respond to this, the Ministry of Land, Infrastructure and Transport provides a speculative real estate checklist on the main page of the integrated illegal real estate activity reporting center and plans to operate a focused reporting period for suspected illegal cases through the first half of this year.

During the same period, reports of false listings and suspected lease fraud advertisements will also be accepted. Based on recent false listing reports, the Ministry checked 60 websites of newly built villa sales that appear when searching for terms like '○○ Housing' or '○○ Residence' on portal sites, and found 16 suspected illegal cases such as rental advertisements by unlicensed persons rather than licensed real estate agents at 10 of these sites.

Sales agencies advertising new villas are not licensed real estate agents under the Real Estate Agent Act, so advertising leases or other rental listings besides sales is illegal. Tenants should be cautious as bait listings and unfair advertisements may lure them and lead to lease fraud through so-called "empty shell leases."

Nam Young-woo, Director of Land Policy at the Ministry of Land, Infrastructure and Transport, stated, "Cases received during this reporting period will be comprehensively analyzed along with real estate transaction information and will be closely examined during future nationwide investigations into speculative real estate and lease fraud." He added, "We will strictly respond to market-disturbing activities in close cooperation with related agencies such as the National Tax Service and the National Police Agency."

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