Where Is the House They Can Rent with Confidence?
Where Is the House They Can Rent with Confidence?
  • Ju Kim Jiyeong
  • 승인 2023.03.03 09:51
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Where Is the House They Can Rent with Confidence?1)

Lease fraud cases in which tenants cannot get their deposit back have recently appeared. The so-called "Villa King," who owned 1,139 houses, died without returning the deposit to the tenants. The National Police Agency estimated the number of lease frauds investigated nationwide at about 8,000 at the end of December, 2022. According to the Korea Housing & Urban Guarantee Corporation (HUG), the number of lease deposit insurance cases has doubled from 2,799 in 2021 to 5,443 in 2022. The police found that lease fraud cases are often not the sole crime of the lessors. These crimes are systematically committed by real building owners, distribution agencies, consulting firms, and real estate agents. When they sign a contract with a tenant, the consulting firm finds a name lender and changes the name of the house. As the name lenders continue to lend their name, they will have as many as thousands of houses, and they have to pay taxes accordingly. However, they are not capable of doing so because they are only people employed by the real building owners. Therefore, the houses where the tenants live are seized, and the tenants cannot get back the deposit even if the contract expires. The groups of consulting firms and brokers behind the cases have been arrested as prosecutors and police have launched a massive investigation. However, there are still so many lease fraud cases that have not been discovered.
Many of the victims are undergraduates and newlyweds with insufficient experience in real estate contracts. According to the Ministry of Land, Infrastructure and Transport's analysis of 687 suspected lease fraud cases, of those who filed with the lease damage support center for two months from September 28, 2021, 50.9% were in their 30s and 17.9% were in their 20s. One of the victims, a 29-year-old man, said, "My life collapsed in an instant. One day, I suddenly received a notice that the auction process for the villa I was living in was going on. There are so many victims around who can't live their lives properly." Among the affected tenants, those who subscribed to the deposit return guarantee insurance can get the deposit back. However, it is difficult for uninsured people to get it back. For now, they can only get it back if the house they lived in is auctioned off. But even with this, if the lessor's arrears tax is high, the return of the deposit is less important than other repayments. When the large number of victims of lease fraud started to rise, the government and the National Assembly decided to modify the system. Starting in April this year, if a house is auctioned off, the lease deposit will be paid back before taxes such as general income tax. In addition, from April this year, tenants who have completed their contract will be able to access the lessor's unpaid national taxes without the lessor's consent up to the lease start date. Victims are urging the government to strictly investigate lease swindlers and regulate the purchase of houses by known tax delinquents in advance.


1) Ryu Taemin, ""Lost the Entire Estate..." 2030 Youth Lost Their Nest", The Asia Business Daily, January 17, 2023

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