Protecting Jeonse Fraud Victims? What If Six Conditions Must Be Met Simultaneously?

The government has decided to support victims through a special law on jeonse fraud, which will be applied temporarily for two years, but criticism is emerging that it is a "showy legislation." To be recognized as a victim of jeonse fraud, all six conditions must be met, but the scope of victim recognition is narrow, raising concerns that victims of jeonse fraud may be excluded from support.

On the 27th, the government announced the special law for victims of jeonse fraud. If recognized as a victim under the special law, special privileges such as the right of first refusal will be granted. Additionally, if desired, the Korea Land and Housing Corporation (LH) will receive the right of first refusal and purchase the leased housing, then provide it as public rental housing, while promoting support in areas such as taxation and finance.

On the 28th, a press conference criticizing the government's special bill on jeonse fraud was held in front of the National Assembly, hosted by the National Countermeasures Committee for Victims of Jeonse Fraud and Empty Jeonse. Photo by Yonhap News

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However, victims of jeonse fraud voiced opposition to the government measures. To be recognized as a victim of jeonse fraud, all six conditions must be met: ▲ tenants who have established opposability and received a fixed date ▲ auction or public sale proceedings (including execution titles) on the leased housing ▲ low-income tenant housing considering area and deposit ▲ cases where investigation has started or there is a judgment of intent to commit jeonse fraud ▲ risk of multiple victims occurring ▲ risk of a substantial portion of the deposit not being returned. The strictness of these requirements makes it difficult for victims to be recognized as such despite being victims.

The National Countermeasures Committee for Jeonse Fraud and Empty Jeonse Victims and the Civil Society Countermeasures Committee (the Committees) pointed out, "If the support target is applied so narrowly, victims who have lost opposability due to unavoidable reasons such as completed auctions, moving out, or simultaneous proceedings will be completely excluded from support." They added, "If the sequential auction and public sale of over 1,000 affected houses proceeds or if issues such as unresolved inheritance problems of landlords delay auctions, there could be situations where victims are entirely excluded from support."

Sim Sang-jung, a lawmaker from the Justice Party, also criticized the victim support law as a victim selection law. On the 28th, on KBS Radio's 'Choi Kyung-young's Strong Current Affairs,' Sim said, "Among the six conditions, the auction or public sale must be in progress. Also, the intent to commit jeonse fraud must be confirmed through investigation. These are difficult to satisfy simultaneously even among current victims." She added, "In cases where the landlord has gone bankrupt, auctions may proceed, but investigations cannot be conducted through bankruptcy procedures."

On the 27th, Won Hee-ryong, Minister of Land, Infrastructure and Transport, is entering the press conference room at the Government Seoul Office in Jongno-gu, Seoul, to brief on support measures for victims of jeonse fraud. Photo by Yoon Dong-joo doso7@

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However, the government maintains the position that lease contracts are private creditor-debtor relationships between individuals, and state intervention should be very limited. The state can intervene only in cases equivalent to clear crimes such as jeonse fraud.

The government also explained that the six conditions are not strict. On the 28th, Won Hee-ryong, Minister of Land, Infrastructure and Transport, said on CBS Radio's 'Kim Hyun-jung's News Show,' "Numbers 1, 2, and 3 are natural conditions such as having a contract, the property being under auction, and it being low-income housing." He continued, "Then numbers 4, 5, and 6 include, for example, multiple victims, intent to commit fraud, and difficulty in returning deposits. These are also natural conditions."

Minister Won said, "Cases where deposits are not returned or are insufficient are addressed through existing civil procedures, which may take time but provide relief through normal, general processes." He added, "This special law is temporary and grants special conditions such as priority in auctions, so the requirements are set to apply to cases involving collective and planned fraud."

Minister Won also explained that the advance compensation plan for deposits demanded by victims is inappropriate as it does not align with the constitutional system and market economy principles. He said, "There is currently no system where the state intervenes to first return the amount lost to fraud victims and later bears the tax burden if it cannot recover the funds." He explained, "The part where the government directly returns the deposit immediately is considered a line that cannot be crossed."

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