From May of this year, only houses with a deposit of less than 90% of the house price can sign up for deposit return guarantee insurance.
If the house price is 300 million won, it means that you can sign up for guarantee insurance even if the deposit is 300 million won now, but in the future, you will be allowed to sign up for less than 270 million won.
This is to prevent charter fraud by 'villa kings' who buy hundreds or thousands of houses and then take out the deposit through a non-capital gap investment method in which the jeonse is rented at the same price as the house price.
The Ministry of Land, Infrastructure and Transport announced today (2nd) a 'prevention of charter fraud and damage support plan' jointly with related ministries.
The key is to lower the Jeonse deposit rate (ratio of Jeonse deposit to house price) from 100% to 90% of the housing city guarantee corporation (HUG)'s deposit guarantee insurance subscription.
The jeonse rental rate for townhouses and multi-housing houses eligible for guarantee insurance rose from 70% in 2013 and 80% in 2014 to 100% in February 2017.
Then, after signing a charter contract with a tenant at a high price, saying that you should be relieved that you are covered by the guarantee insurance, there were a series of incidents of stealing the deposit.
This is a charter scam that abuses guarantee insurance.
If the jeonse rate is lowered to 90%, the government judges that it will be difficult for charter scammers to acquire thousands of villas through the 'simultaneous progress' method of renting 300 million won for a house worth 300 million won.
The Jeonse rate of houses owned by Mr. Kim, the 'Villa King' who died after owning 1,139 houses, is an average of 98%.
If the 90% jeonse rate standard is applied, most of the houses owned by Mr. Kim cannot be covered by guarantee insurance.
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As of last year, out of 237,800 houses covered by guarantee insurance, 57,200 houses had a jeonse rate of over 90%, accounting for 24% of the total.
On the other hand, there are concerns that the 'hurdles' for insurance insurance will increase.
Kwon Hyeok-jin, head of the Housing and Land Office of the Ministry of Land, Infrastructure and Transport, said, "It is highly likely that the rental price will fall further in the future, so the number of people who cannot sign up for guarantee insurance will not increase significantly."
The 90% jeonse rate standard will be applied to new charter contracts from May 1 of this year.
Tenants who have already purchased guarantee insurance and need to renew the guarantee can apply the 100% standard until the end of December this year.
Instead, the government decided to expand HUG's guarantee capacity so that sound charter contracts can be protected.
We plan to increase the HUG capital and increase the guarantee multiple through government investment so that the subscription to guarantee insurance products will not be interrupted.
Under the Housing and Urban Fund Act, HUGs can issue guarantees up to 60 times their equity capital, but as of the end of December last year, the guarantee multiple rose to 54.4 times.
In addition, the target for guarantee fee discount will be expanded from 40 million won or less to 50 million won or less, and the discount range will be expanded from 50% to 60%.
When reviewing guarantee insurance, we decided to apply the appraisal price only when there is no published price and actual transaction price.
This is in accordance with the point that some appraisers have inflated the market price by arguing with the landlord by exploiting the fact that the appraised value is applied first when calculating the jeonse rental rate.
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It is decided to more closely manage whether registered rental business operators are complying with the obligation to sign up for guarantee insurance.
As a result of the revision of the law, it became mandatory for all rental operators to sign up for guarantee insurance from August 2021, but it was confirmed that there were many cases where tenants were not signed up after reassuring tenants that they were subject to compulsory subscription only in words.
In the case of a house where a tenant lives, the government plans to register it as a private rental house and receive tax benefits only when the landlord purchases a guarantee insurance.
Vacancy allows you to sign up for guarantee insurance after registering a private rental house, but if you do not sign up, notify the lessee so that you can cancel the contract and receive a penalty.
For this, the law needs to be amended.
As some real estate agents and appraisers have been found to have participated in organized charter fraud, the punishment for them will also be strengthened.
Currently, licensed realtors are only revoked if they are sentenced to prison for a breach of duty.
In the future, we will introduce a 'one strike out' system so that it can be canceled even if you receive a probation.
At the same time, it gives real estate agents more authority and responsibility.
In the future, brokers will be able to view the landlord's credit information, such as tax and interest arrears, the relationship of senior rights to the house, and the moving house.
It is mandatory to inform the lessee about the jeonse tax rate and the jeonse guarantee product.
As cases in which some brokerage assistants were actively involved in charter fraud were also revealed, a plan to limit the number of brokerage assistants, who could be freely recruited so far, to the number of brokers (one broker recruits up to 3 assistants) is also being promoted.
Appraisers are now disqualified after receiving two imprisonment sentences, including probation, but the law is amended so that they are disqualified even if they receive only one imprisonment sentence.
(Photo = Yonhap News)