Solution Tormenting Jeonse Fraud Victims... Tenant's Right of First Refusal Dilemma

Amid a nationwide surge in reports of jeonse fraud, the government has been rolling out a series of countermeasures such as auction suspensions and tenant preemptive purchase rights, but doubts about their effectiveness are being raised. While these measures may prevent victims from being immediately evicted onto the streets, many argue that they do not offer substantial relief. This is because victims, who have already suffered financial losses due to the inability to recover their deposits, may be forced to incur further debt.

On the 19th, the government decided to implement auction suspension measures for properties affected by jeonse fraud as part of its victim support plan. However, contradicting this move, on the following day, the Incheon District Court auction courtroom proceeded with the auction of four affected properties as scheduled.

Auction suspensions rely on the cooperation of creditors and cannot be enforced by the government. In particular, if the creditor is not a regulated financial institution but a private lender or individual, requests to suspend auctions or sales are unlikely to be accepted. The four properties that failed to sell were backed by claims held by small-scale non-performing loan (NPL) purchasing institutions. When claims are transferred to private lenders, the effectiveness of such measures is essentially minimal.

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The government and the ruling party also plan to support low-interest loans and grant tenant preemptive purchase rights when affected properties go to auction. This means giving tenants the priority to purchase the property if it goes to auction, but this too has been criticized as a half-measure.

Most tenants who have suffered losses do not have sufficient financial capacity since they have already failed to recover their deposits, so asking them to take on more debt to bid for the jeonse property is essentially the same as forcing them to borrow again. In other words, this measure only benefits tenants who have the means to raise funds.

Victims have also expressed skepticism about the concrete implementation plans of the government's measures. On the 21st, Ahn Sang-mi, co-chair of the National Countermeasures Committee for Jeonse Fraud and Empty Jeonse Victims, said in an interview with MBC Radio's 'Kim Jong-bae's Focus' that "(Tenant preemptive purchase rights) are the core of our demands, but they still have no substance." She added, "Nothing has been announced about what price victims can buy at or how they can avoid competing with auction bidders."

She emphasized, "The reason we cannot beat auction bidders is that our deposit is at stake, so the amount we can bid at the auction site is limited," and added, "While preemptive purchase rights are important, knowing the price and how to exercise them is even more crucial."

Ahn also lamented that even if preemptive purchase is possible, "we still have to take on more debt." She said, "Our goal is to recover our deposits. But since that is difficult, we demanded these measures as a last resort. We are not buying these houses because we want to, but because we have no other choice."

Regarding the auction suspension measure, she said, "Banks transfer claims to private lenders. It is not as easy for the government to pressure private lenders as it is with regular banks," and requested, "(The government) should speak more strongly to the banking sector and ensure that suspensions also apply to private lenders."

Jeonse fraud victims are reportedly demanding more effective measures such as the government publicly purchasing affected properties. However, the government is negative about this approach.

On the 20th, at the National Assembly Land, Infrastructure and Transport Committee plenary session, Land, Infrastructure and Transport Minister Won Hee-ryong expressed reluctance to the opposition party's call for "public direct purchase of affected properties and simultaneous purchase of deposit return claims," saying, "With what money and at what price are you asking us to buy?"

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