"Special Act on Jeonse Fraud" Proposed as Party Policy by Both Ruling and Opposition Parties... Differences in Relief Methods

Difference Between Immediate Relief Then Recovery and Auction Profit Support
Yeom Tae-young "Possibility of Discussions Including Financial Input"
Common Point Is Expanded Scope for Victim Support

The People Power Party and the Democratic Party of Korea jointly proposed a bill to amend the Special Act on Support for Jeonse Fraud Victims and Housing Stability (Jeonse Fraud Special Act) as their party policy. This is because the existing Jeonse Fraud Special Act is seen as inadequate in providing proper support to fraud victims. Both ruling and opposition parties added provisions to expand the scope of victims, enabling broader support. However, there are differences in the methods of victim relief. Both parties have left open the possibility of negotiation.

On the 15th, Kwon Young-jin, the ruling party's secretary of the National Assembly Land, Infrastructure and Transport Committee, and Kim Eun-hye, a member of the People Power Party, submitted a bill to amend the Special Act on Jeonse Fraud to the National Assembly's Legislative Affairs Office. Photo by Kim Hyun-min kimhyun81@

Differences: Relief First, Recovery Later vs. Support Through Auction Profits

The Democratic Party adopted a 'relief first, recovery later' approach, where the Housing and Urban Guarantee Corporation (HUG) and others use the Housing and Urban Fund to publicly purchase the lease deposit return claims of Jeonse fraud victims. This method provides partial support to victims first and then claims reimbursement rights from the fraudulent landlords. The advantage is that the return of deposits to victims can be expedited. However, even with this relief-first approach, it does not guarantee 100% support of the lost deposits. Yeom Tae-young, the representative lawmaker who proposed the Democratic Party's amendment, said in a phone interview on the 16th, "The current bill does not promise 100% of the deposit. It guarantees an amount equivalent to the highest priority repayment under the (Housing) Lease Protection Act."

The government exercised its right of reconsideration (veto) on the Jeonse Fraud Special Act passed in the 21st National Assembly, and the ruling party has opposed it citing financial burdens and discrimination against victims of other types of fraud crimes. Kwon Young-jin, the ruling party's floor leader on the Land, Infrastructure and Transport Committee, said on the 15th after proposing the Jeonse Fraud Special Act as party policy, "The 'relief first, recovery later' approach raises questions about the effectiveness of evaluating guarantee claims. It could take too much time to evaluate, and if the recovery is less than the evaluation, the Housing and Urban Guarantee Fund itself could be depleted."

In response, the People Power Party's amendment opened a path to compensate victims by providing auction profits and focused on housing stability for victims. Kwon said, "The amendment allows the Korea Land and Housing Corporation (LH) and others to purchase the victimized housing through auction and provide it as a long-term joint lease to victims without rental burden. Through purchasing victim housing and supporting auction profits, it prioritizes housing stability for victims and aims to compensate deposit losses as much as possible." Additionally, if auction profits do not reach the rental level for 10 years, the amendment provides grounds for the government and local governments to provide additional financial support.

Although the amendments proposed by both parties differ in relief methods, it is known that the possibility of agreement remains open. Yeom said, "The core of the government and ruling party's plan is support through auction and public sales profits, but for those who do not even receive the highest priority repayment level, a separate alternative is needed. The government and ruling party are willing to propose alternatives even with financial input, so there is room for negotiation."

Commonality: Expanded Victim Scope to Increase Support Possibility

Both parties focused on expanding the scope of victims in their amendments. The People Power Party's amendment recognized the opposability and priority repayment rights not only for leasehold rights but also for Jeonse rights. Previously, only those who established leasehold rights were recognized as victims, but now those with Jeonse rights can also have their rights acknowledged. Furthermore, the amendment clearly defines the application period for support measures after being recognized as a victim as 'up to 3 years,' broadening the range of victims who can receive support.

The Democratic Party included in its amendment a provision to add tenants who suffered damages due to double contracts and "empty Jeonse" (a situation where the housing sale price falls so low that the Jeonse deposit cannot be returned) as Jeonse fraud victims, even if they do not meet all the requirements for Jeonse fraud victims. Additionally, the Democratic Party allowed foreigners to be recognized as Jeonse fraud victims and raised the deposit limit for victim eligibility from 300 million KRW to 500 million KRW to enable more people to be recognized as victims. They also specified in the law that multiple victims mean "cases where two or more tenants have suffered damages," replacing the vague term "multiple tenants" used previously.

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