In order to prevent damage from charter fraud, the sale of the home by the landlord or the establishment of a near-mortgage right is prohibited immediately after the signing of the global contract.



Before entering into a global contract, the landlord must transparently disclose to the lessee whether there are any arrears in taxes or loans, etc., which are paid before the security deposit.



A low-interest emergency loan of up to KRW 160 million is provided to victims of the charter fraud, and temporary housing is provided at 30% of the market price for up to six months.



The Ministry of Land, Infrastructure and Transport announced today (1st) the 'Measures to Prevent Damages from Charter Frauds' jointly announced at the government complex in Seoul.



This measure is a follow-up measure to the 'Measures to Stabilize People's Livelihoods in the Residential Sector' reported at the 3rd Emergency Economic People's Livelihood Meeting presided over by President Yoon Seok-yeol on July 20th.



At that time, President Yoon instructed Minister of Land, Infrastructure and Transport, Won Hee-ryong to crack down on the crime of charter fraud, ordering them to preemptively manage areas where there is concern about 'can charter' and to prepare support measures for victims of charter fraud.



Minister Won said at a briefing today, "In order to surely root out the charter fraud, we have prepared this countermeasure under the principle of preventing damage in advance, promptly providing relief for unavoidable damage, and exposing criminals to full punishment."



First, the government has decided to strengthen the resistance of tenants to prevent damage to charter fraud.



To this end, the standard contract for housing rental states that 'the lessor shall not purchase or sell or establish a near-mortgage right until the counter-force of the lessee takes effect'.



According to the current Housing Lease Protection Act, even if a lessee reports a move-in and receives a fixed date, the effect takes effect from '00:00 on the next day', not on the same day.



For this reason, if the landlord sells the house immediately after the jeonse contract or obtains a mortgage from the bank and establishes a mortgage, the tenant's security deposit is pushed down and the security deposit is not properly protected.



Minister Won explained, "As it is still difficult to give the lessee the legal power of defense as soon as the date is confirmed under the current laws and systems, we will promote the system maintenance.



In addition, we have decided to ask the financial sector to check the status of granting the lease date when applying for a mortgage loan, and to consult with major banks in the market to take into account the Jeonse deposit when a housing mortgage loan application is received.



The lessor is obliged to provide the lessee with information such as the tax delinquency and the amount of the senior security deposit prior to the contract.



After the global contract, the law will be amended so that the lessee can check the lessor's unpaid tax, etc. without the consent of the lessor.



Regardless of the collateral setting priority, the 'Priority Reimbursement Amount', which repays a certain amount of the tenant's deposit first, will be raised.



Currently, the highest reimbursement amount is set at 50 million won for Seoul, 43 million won for overcrowding control areas in the metropolitan area, 23 million won for metropolitan cities, and 20 million won for other regions. and amend the enforcement ordinances of related laws within the year.



When subscribing to the Jeonse Guarantee Insurance of the Housing and Urban Guarantee Corporation (HUG), the housing price applied to tenement, multi-family, and urban living houses will be lowered from 150% of the current published price to 140%.



HUG recognizes 150% of the official price as the house price because it is difficult to calculate the market price for newly built villas.



Support for charter fraud victims will be strengthened.



To victims who have not received their Jeonse deposit back, the Housing and Urban Fund provides emergency fund loans up to 160 million won at a low interest rate of 1% per year.



Victims who have difficulties in securing funds or housing are provided with temporary housing so that they can live in rental housing managed by HUG at 30% or less of the market price for up to 6 months.



Management of areas where there is a concern about 'can jeonse' due to the high jeonse rate will also be strengthened.



In the case of the metropolitan area, the Jeonse rate is disclosed in units of dong, and information such as the status of guarantee accidents and the successful bid rate is provided to inform the risk of charter fraud.



In order to support the damage caused by charter fraud, we will set up ‘Jeonse Damage Support Center’ in three locations, starting from Seoul this month, and next year in Seoul, Gyeonggi, and Chungcheong, and have lawyers and solicitors stationed to provide counseling, damage relief, and support related to chartering.



In addition, we will launch a 'self-diagnosis safe charter app' by January next year for 2030 generations with little experience in real estate transactions, and create and distribute a 'core checklist' for tenants.



A reward system for reporting suspected charter fraud will also be introduced.



When an authorized real estate agent reports a property suspected of chartering fraud to the local government, a small reward is paid.



In order to detect malicious charter fraud, the Ministry of Land, Infrastructure and Transport and the National Police Agency will conduct a special joint crackdown until January next year.



Penalties for charter fraudsters will be strengthened.



Registration of rental business is not permitted to perpetrators of charter fraud, and registration is canceled in the case of existing businesses.



Enlarging an image


Minister Won said, "For the youth and ordinary people, the money for jeonse is nothing more than all property."



Kwon Dae-jung, a professor of real estate at Myongji University, said, "Measures such as strengthening the resistance of tenants through special contracts can be more effective in protecting tenants than the 3 rental laws. It depends on how long it will be maintained,” he said.



(Photo = Yonhap News)