The minimum guarantee rate for jeonse (lump-sum deposit lease) fraud victims' rental deposits, currently being pursued by the National Assembly, is expected to be lowered from the initially proposed 50% to around 33%. A plan to cover up to half of victims' deposits had been discussed, but fiscal authorities are demanding an adjustment, citing equity with similar existing programs.
According to political sources on Wednesday, the National Assembly's Land, Infrastructure and Transport Committee plans to convene a legislation subcommittee meeting on the 7th of this month. The revised "Special Act on Support for Jeonse Fraud Victims and Housing Stability" will be the first item on the agenda. The subcommittee is expected to decide on the most contentious issue — the minimum guarantee rate for jeonse fraud — and proceed with passing the bill. The ruling and opposition parties have agreed to pass the government's supplementary budget, which was drawn up on the premise of establishing a new minimum guarantee system for jeonse fraud, through a plenary session on the 10th. Accordingly, lawmakers are seeking to fast-track the legal framework as well.
Rep. Bok Gi-wang of the Democratic Party of Korea, the ruling party's chief secretary on the Land Committee, and Rep. Eom Tae-young of the People Power Party previously co-sponsored a bill proposing a minimum guarantee rate of 50%. However, the Ministry of Economy and Finance expressed the view that the rate should be lowered to 33%, signaling a shift in the legislative landscape. The ministry took into account criticism that providing a higher recovery rate exclusively for jeonse fraud, unlike existing housing rights protection programs, would be inequitable.
For example, in Seoul, small-sum tenants are protected with a maximum priority repayment of 55 million won — roughly 33% of the deposit — for housing with deposits of 165 million won or less. The cash subsidy ceiling provided by the state when a home is completely destroyed by natural or social disasters is also around 30% of the housing value.
Among ruling and opposition lawmakers on the Land Committee, a consensus is forming that "the priority should be on swift support." A key Land Committee official explained, "The general view is that since fiscal resources are being committed by treating jeonse fraud as a social disaster, the minimum guarantee rate should be determined within the range of other disaster relief standards." The Ministry of Economy and Finance allocated 27.9 billion won in the supplementary budget as minimum support funds for jeonse fraud victims, a figure calculated based on the assumption of a 33% minimum guarantee rate.