One-third of jeonse fraud deposits guaranteed... Actual support for Jeju’s 149 cases to be calculated separately

【Financial News, Jeju = Reporter Jeong Yong-bok】 A system under which the government will cover the shortfall if jeonse fraud victims recover less than one-third of their rental deposit even after auction or public auction proceedings will take effect next month. A total of 149 cases in Jeju have been recognized as jeonse fraud victims, but the amounts of deposits already recovered and the types of damage vary, so all 149 cases will not receive the same amount of support.
According to the Ministry of Land, Infrastructure and Transport and Jeju Special Self-Governing Province on the 7th, the “minimum-guarantee system,” which guarantees that jeonse fraud victims recover at least one-third of their deposits, and the “advance payment followed by settlement” system for some victims, including those affected by trust fraud, will take effect on Nov. 13.
A proposed amendment to the enforcement decree of the “Special Act on Support for Victims of Jeonse Fraud and Residential Stability” was approved at a Cabinet meeting on the 6th. It sets out in detail the amounts and the application, payment and settlement criteria needed to implement the minimum-guarantee amount and advance-payment system under the amended Special Act, promulgated on May 12.
The key point of the new system is that victims will not automatically receive one-third of their deposits in cash once they are recognized as victims. If the amount they actually recover after auction or public auction proceedings is less than one-third of their rental deposit, only the shortfall will be paid as a “minimum support payment.”
The minimum-guarantee amount used to calculate the minimum support payment is one-third of the rental deposit. The actual support payment is the amount left after deducting money received through enforceable tenancy rights or preferential repayment rights, amounts repaid through claims for the return of rental deposits, and other sums, including auction profits generated when the public sector buys the affected home and rent support payments.
For a victim whose deposit is 150 million won, the minimum-guarantee amount is 50 million won. If they recover 20 million won from the auction proceeds and 10 million won in auction profits, their existing recovery totals 30 million won. The government will pay the remaining 20 million won as a minimum support payment, bringing their total recovery to 50 million won.
If victims have already recovered at least one-third of their deposits through various channels, they may not receive an additional minimum support payment. A “guarantee of one-third of the deposit” does not mean that one-third of the deposit will be paid anew to every victim.
The advance-payment-followed-by-settlement system will also be introduced for victims who contracted with someone without the authority to lease the property, as in trust fraud, and who have difficulty exercising their tenancy rights as a result.
In such cases, a certain amount will be paid upfront without waiting for all auction or public auction proceedings, or the disposal of the affected home, to be completed. If victims later recover additional money through an auction or collection of claims, the amount will be taken into account in a subsequent settlement.
In the Ministry of Land’s example involving a 150 million won deposit, if a victim has received only 10 million won in rent support, they can first receive 40 million won—the 50 million won minimum-guarantee amount minus the support they have already received. Any additional recovery will later be reconciled with the advance payment.

Korea Land and Housing Corporation (LH) will handle applications for minimum support payments and advance payments, as well as disbursement and post-payment settlement. Victims who have asked LH to buy the affected home can apply for the minimum support payment once the auction profit has been calculated. Those who have not requested a purchase can apply after the disposal process for the home is complete. Applications for advance payments can be made before LH’s purchase of the affected home or its disposal is complete.
In Jeju, a total of 149 cases have been recognized as victim cases following review by the Jeonse Fraud Victim Support Committee. There are 50 victims in their 30s and 38 in their 40s; those in their 30s and 40s account for 59.0% of the total.
Officetels make up the largest number of affected homes, with 60 cases. They are followed by 37 detached or multi-household homes, 15 row houses, 14 multi-family homes and 10 apartments.
However, the 149 cases recognized as victim cases in Jeju cannot simply be counted as expected beneficiaries of the new system. For minimum support payments, authorities must determine whether the amount actually recovered through auction or public auction, among other procedures, falls short of one-third of the deposit. Advance payments are available only to victims who meet the conditions set out in law, including those affected by trust fraud.
Nationwide, 40,936 cases had been recognized as jeonse fraud victim cases from the Special Act’s implementation through the end of August. Rental deposits were 300 million won or less for 97.6% of victims, and people under 40 accounted for 76.0%.
Jeju’s high rate of incidents involving unreturned jeonse deposits must be distinguished from recognition as a jeonse fraud victim under the Special Act. Last July, the incident rate for Housing and Urban Guarantee Corporation (HUG) jeonse deposit return guarantees in Jeju was 4.6%, 5.1 times the national average of 0.9% and the highest among the country’s 17 cities and provinces. From January through July this year, Jeju recorded a cumulative 131 guarantee incidents totaling 25.294 billion won.
An incident rate of 4.6% for jeonse deposit guarantees does not mean that 4.6% of tenants in Jeju failed to get their deposits back. It is the share of the value of HUG guarantee products whose coverage period ends in a given month that was recorded as incidents because landlords failed to return the money.
By contrast, recognition as a jeonse fraud victim under the Special Act is determined by the Jeonse Fraud Victim Support Committee after reviewing whether the case meets legal requirements, such as deception by the landlord and the possibility of multiple victims. Unreturned deposits and recognized jeonse fraud victims are tracked in separate statistics.
Therefore, to estimate the actual impact of the minimum-guarantee system on recovery for victims in Jeju, authorities must separately identify, among the 149 cases, those in which auction or disposal proceedings have concluded, cases where the deposit recovery rate is below one-third, and cases eligible for advance payments, including trust fraud.
Once information on each Jeju victim’s rental deposit and prior recovery, as well as whether LH has bought the affected home, is taken into account, the amount of additional deposit recovery in Jeju after the system takes effect is also expected to become clearer.


[email protected] Jeong Yong-bok Reporter