What will happen to Seo Hyun-jin’s 2.6 billion won jeonse deposit? Cheongdam-dong villa goes up for ‘half-price’ auction after landlord’s bankruptcy

[Financial News] A luxury villa in Cheongdam-dong, Gangnam-gu, Seoul, where actress Seo Hyun-jin had lived under a jeonse lease, has once again been put up for auction. Interest is focused on whether Seo will be able to recover her jeonse deposit of around 2.6 billion won, as the auction, which had been halted during the landlord’s rehabilitation proceedings, resumed after the landlord was declared bankrupt.
According to MoneyToday and other outlets on the 6th, the Supreme Court’s Court Auction Information site listed for auction that day a multi-family home in Cheongdam-dong where Seo Hyun-jin had lived under a jeonse lease. The home has an exclusive floor area of 117.79 square meters.
In April 2020, Seo signed a jeonse lease for the home with a deposit of 2.5 billion won and registered a jeonse right. When she renewed the contract in March 2022, the deposit rose to 2.625 billion won. However, when the lease expired in April 2024, the landlord was unable to return the deposit. Seo moved out in September of the same year after completing the registration of her tenant’s leasehold right.
Tenant’s leasehold registration is a system that allows tenants who have not received their deposit back after a lease ends to retain their existing rights against third parties and their priority repayment rights even if they move out.
Seo subsequently applied for a compulsory auction, and the auction proceedings began after the court ordered the auction to commence in April last year.
The home was appraised at 2,873,630,000 won, but after no bidders came forward in three rounds of auctions, the minimum bid fell to the 1.4 billion won range.
In July last year, ahead of the fourth round of bidding, the landlord applied to the court to suspend enforcement, citing rehabilitation proceedings, and the auction proceedings were halted. In December of the same year, after the landlord was declared bankrupt, the auction resumed with the minimum bid set at the level it had reached when proceedings were suspended.
The minimum bid in this auction is 1,471,290,000 won, about half the appraised value, and the date for the sale decision is scheduled for the 13th.
Seo is reportedly listed as the highest-priority rights holder in the property register. She will receive her deposit first from the remaining sale proceeds after auction costs and claims that must legally be paid first have been settled. However, if the home sells at around the current minimum bid, it appears unlikely that she will be able to recover the full 2.625 billion won deposit.
Any deposit she cannot recover through the auction will remain a claim against the landlord. However, since the landlord has already been declared bankrupt, how much she ultimately recovers will likely depend on the landlord’s remaining assets and the order and amounts of distributions to other creditors in the bankruptcy proceedings.
[email protected] Kim Su-yeon Reporter