South Korea's ruling party and government will introduce a "minimum guarantee system" to ensure jeonse fraud victims recover a certain percentage of their rental deposits. For victims of unauthorized contracts, including trust fraud, authorities plan to implement an "advance payment with later settlement" approach to accelerate compensation.
Rep. Bok Ki-wang, policy coordination committee chair of the Democratic Party of Korea's Land, Infrastructure and Transport Committee, unveiled the relief measures at a policy coordination meeting at the National Assembly on Monday. Bok also serves as chair of the party's Special Committee on Jeonse Fraud Countermeasures. The committee held its seventh meeting earlier in the day to discuss legislative tasks for strengthening victim support.
"Jeonse fraud is clearly a social disaster, with 75% of victims being young people in their 20s and 30s," Bok said. "We will do our best to wipe away their tears and reduce future damages."
The relief package includes three key measures: a minimum guarantee system ensuring victims whose auction or public sale proceedings have concluded recover a set percentage of their deposits; advance minimum guarantee payments for unauthorized contract victims before auction completion; and partial advance payments of auction proceeds for joint collateral victims. The measures were developed in coordination with the Ministry of Land, Infrastructure and Transport, Ministry of Justice, Office for Government Policy Coordination, Financial Services Commission, and Ministry of Economy and Finance.
"We will secure funding through government finances," Bok said of the minimum guarantee system. "It will also apply retroactively to victims whose auctions have already concluded. This is the result of joint party-government efforts to ensure not a single victim is left behind."
The minimum guarantee system provides financial support when a victim's total recovery—including auction distributions, auction gains (the difference between Korea Land and Housing Corporation's appraised value and winning bid), landlord repayments, and government rent subsidies—falls short of a specified percentage of the original deposit. The exact percentage will be determined during parliamentary deliberations on amendments to the special law.
"Through the advance payment system, we will keep the promise that Representative Lee Jae-myung and the Democratic Party made when we were in opposition," Bok said. "Joint collateral victims previously had to wait indefinitely to receive their share of auction proceeds, but we will ensure they receive relief through advance payments."
Bok noted that the committee secured passage of criminal code amendments on December 2 that doubled the statutory penalty for fraud and enabled prison sentences of up to 30 years for multiple offenses. He added that the party would work with the Ministry of Justice to adjust the small-sum tenant priority repayment system, which currently creates significant regional disparities between the capital area and other regions.