South Korea Sets One-Third Recovery Floor for Eligible Jeonse Fraud Victims

A cash safety net for tenants left with little or nothing

South Korea will introduce a minimum guarantee for eligible jeonse fraud victims on November 13, paying cash when their recovered money falls below one-third of their rental deposit. Online preliminary applications open on November 10 through the Korea Land and Housing Corporation's Cheongyak Plus portal.

The calculation is straightforward: a tenant with a deposit of 100 million won who recovered 10 million won through an auction could receive another 23.33 million won, assuming no other recoveries count. Someone with the same deposit who recovered nothing could receive 33.33 million won.

The Ministry of Land, Infrastructure and Transport announced the launch on November 9. The measure addresses a gap in existing assistance: some victims received no auction distribution and could not benefit from support linked to LH purchasing their property.

Jeonse is a rental arrangement in which a tenant gives the landlord a large refundable deposit, usually instead of paying ordinary monthly rent. When that deposit is not returned, a household can lose the money it needs to secure its next home. The new system establishes a minimum recovery level for qualifying victims, while leaving much of their original deposit still to be recovered.

How the payment is calculated

The minimum support payment is the difference between one-third of the lease deposit and the amount already recovered through channels counted by the program. Someone whose counted recovery already reaches that threshold would have no shortfall for this payment to cover.

A second example shows how the same rule works with a larger deposit. For a tenant who paid 150 million won and recovered 30 million won, the threshold is 50 million won. The additional minimum payment would therefore be 20 million won.

The two examples also show why the payment varies between victims. The tenant with a 100 million won deposit and a 10 million won recovery receives a larger cash payment than the tenant with a 150 million won deposit and a 30 million won recovery, because the first household is further below its own minimum threshold.

For a household starting with no recovery, reaching one-third still leaves roughly two-thirds of the deposit outstanding. The program provides a floor beneath losses rather than replacing the full amount owed by the landlord.

Who qualifies, and who is excluded?

Eligibility covers tenants formally recognized as jeonse fraud victims under the special law, along with certain tenants covered by Article 2, Paragraph 4(c). The latter category extends assistance to specified tenants who face difficulty recovering their deposits through auction or public sale.

The criteria described for that category include a deposit of no more than 500 million won, evidence of the landlord's intention not to return it, completed registration of the tenant's move into the property, and an officially recorded date on the lease. That recorded date helps determine the tenant's place in the repayment order when a property is sold.

The November 9 explanation also describes Article 2, Paragraph 4(c) as covering some cases where clear fraudulent intent has not been established. Applicants in this category will need LH to check their recognition status and the applicable conditions, including the evidence concerning repayment.

Deposits above 500 million won are excluded. Other exclusions include victims who purchased the affected property themselves and people who are not South Korean nationals. Victims whose auction or public sale ended before the system begins can also qualify, subject to the program's conditions.

Which recoveries reduce the support?

LH will count more than the money a tenant receives at auction. Recoveries include distributions from court auctions or public sales, money returned by the landlord or a licensed real estate agent, support from auction gains associated with an LH purchase, and qualifying rental financial assistance.

An auction distribution is the money paid to creditors after a property is sold. Tenants may receive only part of their deposit because other claims have a higher repayment priority or because the sale brings in too little money to cover the debts.

Rental assistance matters because money already provided through a counted support channel reduces the remaining gap. A tenant who has recovered 10 million won through auction and also received qualifying rental support would therefore receive less than the 23.33 million won in the basic 100 million won example.

The treatment of local assistance needs particular care. The October 6 description of the decree included rental support from local authorities among deductions, while the launch details exclude local government subsidies and financial support from counted recoveries. Applicants receiving local assistance should ask LH how their particular payment is classified before estimating their entitlement.

Advance payments for unauthorized leases

Victims of trust fraud and other contracts signed with someone who lacked legal authority to rent out the property have a separate route: payment first, settlement later. They may seek an advance before the property's auction or public sale has finished.

In these cases, a person may have accepted a tenant's deposit without having the legal power to grant the lease. That can leave the tenant struggling to recover money through the property's sale and waiting for a possible LH purchase before further assistance becomes available.

The advance starts from one-third of the deposit, with deductions for money already recovered and qualifying rental financial support. It is intended to bring assistance forward for these victims rather than require them to wait until the property disposal process ends.

Later recoveries are taken into account during settlement. If an LH purchase generates gains that qualify for further support, an additional payment can follow. Recipients must also return any excess support arising from subsequent recoveries; failure to return money owed can bring an administrative fine of up to 30 million won.

The dates that determine when to apply

The system follows an amendment to the Special Act on Support for Jeonse Fraud Victims and Residential Stability, revised and promulgated on May 12. The Cabinet approved the revised enforcement decree on October 6, establishing the framework for the November launch.

• May 12: The amendment establishing the new support framework was revised and promulgated.
• October 6: The Cabinet approved the revised enforcement decree.
• November 9: The ministry announced the launch arrangements.
• November 10: LH begins accepting online preliminary applications through Cheongyak Plus.
• November 13: The minimum guarantee takes effect, with applications also accepted at LH regional offices or by mail.
• November 13, 2029: Application deadline for people recognized as victims before the system begins.

The opening of applications does not mean every victim can immediately seek the ordinary minimum payment. When LH purchases the property, the tenant must wait until the relevant auction gain calculation is complete. In other cases, applications follow the conclusion of the auction or public sale.

Advance payment applicants can apply before those procedures end. The difference is practical: ordinary support fills a gap calculated after the relevant recovery process, while the advance route provides earlier assistance for specified unauthorized lease cases.

The general application periods are three years from the victim status determination or one year from the close of the auction or public sale, depending on the applicable circumstances. People recognized before implementation have the stated transitional deadline of November 13, 2029.

Documents, decisions and appeals

Applicants should prepare their victim determination notice, lease contract, resident registration extract, identification and a certified copy of the property's registration record. LH may also require a trust register, an auction distribution statement or evidence of money already repaid.

Those additional records help establish who had authority over the property, how much the tenant received from its sale, and whether other repayments reduce the support due. A complete picture of recoveries is central to calculating the cash payment.

LH is expected to notify applicants of its decision within 90 days of receiving an application. The period can be extended by up to 30 days when supplementary documents are needed. An applicant who disagrees with the decision can file an objection within 30 days of receiving the notice.

Cheongyak Plus also provides an eligibility self-check. Applicants can seek further information through LH's call center at 1600-1004. The decision timetable means tenants should allow time for assessment rather than expect payment as soon as they apply.

Why auction outcomes have mattered so much

Existing relief has depended heavily on the money left after a property's sale and whether LH can purchase it. Two households with similar deposits can therefore end up with very different recoveries because their landlords' debts, repayment priorities and property sale prices differ.

The minimum guarantee reduces that gap by bringing qualifying households up to the same share of their own deposit. Its most direct effect is on tenants who received nothing through auction or whose homes LH could not buy.

Baek Seung-rok, director of the ministry's Victim Support Coordination Division, described the expected benefit for victims left outside existing recovery channels:

We expect these measures to provide real help for the residential stability of victims who have fallen through the cracks

The advance route addresses a related problem: delay. For qualifying victims of unauthorized leases, financial assistance can arrive before the property disposal process is complete, with the final balance settled after further recoveries become known.

More than 41,000 victims and pressure for a higher floor

The cumulative number of recognized jeonse fraud victims reached 41,559 after another 623 cases were approved. Young people account for 76 percent of the total, making the recovery of deposits a particularly pressing issue for younger households trying to maintain housing or move elsewhere.

Victim advocacy groups want the guarantee raised to one-half of the deposit, and further National Assembly debate has been signaled. On a deposit of 100 million won, that would mean a recovery floor of 50 million won rather than approximately 33.33 million won, a difference of about 16.67 million won.

The launch arrangements do not give a total funding allocation or a date for parliamentary consideration of a higher guarantee. For applicants, the immediate priorities are establishing eligibility, documenting all counted recoveries and applying within the relevant deadline.

Key Points

• The minimum guarantee takes effect on November 13, with online preliminary applications opening on November 10.
• Eligible victims receive the gap between one-third of their deposit and their counted recoveries.
• A 100 million won deposit with 10 million won already recovered could qualify for another 23.33 million won.
• Specified victims of unauthorized leases can request an advance before the property sale process ends.
• Deposits above 500 million won, victims who bought the affected property and non-South Korean nationals are excluded.
• LH generally has 90 days to decide, with a possible extension of 30 days; objections must be filed within 30 days of notification.
• People recognized as victims before implementation have until November 13, 2029, to apply.