Service to Provide Priority Rights Information Before Jeonse Contract Signing

The government has decided to overhaul relevant systems so that prospective tenants can easily check rights information all at once before signing a jeonse (long-term lease) contract. Until now, most countermeasures against jeonse fraud have focused on remedies after the fact, but the new measures aim to reduce information asymmetry to enable prevention in advance.

According to the government’s anti-jeonse fraud measures announced on March 10, a system will be established that allows prospective tenants to check risk assessment information-including information on prior-ranking rights-at once before signing a contract. Currently, information such as mortgage, leasehold rights, and provisional seizures must be checked individually via real estate registry extracts held by the Supreme Court’s Office of Court Administration, while move-in information must be confirmed using the certificate of resident registration issued by the Ministry of the Interior and Safety. Even after checking all this information, it has not been easy for tenants to assess the risk by reviewing prior-ranking rights relationships.

Members of civic groups are holding a press conference announcing their demands for housing rights policies in April last year at Gwanghwamun, Seoul. Photo by Yonhap News Agency

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To address this, the government will link data scattered across various agencies to analyze prior-ranking rights information and assess risk, providing this to prospective tenants. The Safe Jeonse Application, operated by the Korea Housing & Urban Guarantee Corporation (HUG), will be upgraded for this purpose. As legal revisions are required, the Ministry of Land, Infrastructure and Transport explained that public services will begin in September, starting with landlords’ consent.

The effective timing of tenants’ opposability will be adjusted to the moment the move-in report is filed. Currently, the effect begins at midnight on the day after reporting, which has been exploited by some landlords who take out additional loans by establishing mortgages immediately after tenants’ move-in registration. In consultation with banks, a system will be developed to allow immediate verification of tenants’ prior-ranking deposits to prevent landlords from taking out duplicate loans. Additionally, an integrated information system will be established so that licensed real estate agents can access it and will be required to explain this information to tenants. Regulations will be revised to mandate these explanations. Failure to properly confirm or explain the information will result in fines or business suspensions.

Minister of Land, Infrastructure and Transport Kim Yoonduk stated, "The government will mobilize all available resources to address the structural vulnerabilities of jeonse contracts, such as information asymmetry, and create an environment where prospective tenants can sign contracts with confidence."

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