A "minimum guarantee system" will take effect on November 13, under which the government will cover the shortfall if the amount recovered by a Jeonse fraud victim through public auctions or court-ordered sales falls short of one-third of their lease deposit.

The Ministry of Land, Infrastructure and Transport (MOLIT) announced on the 6th that the enforcement decree amendment to the "Special Act on Support and Housing Stability for Jeonse Fraud Victims" (Jeonse Fraud Special Act) was approved at a Cabinet meeting. This establishes the detailed provisions mandated by the amendment to the Jeonse Fraud Special Act promulgated last May.

The amendment contains the calculation criteria and procedures for the minimum guarantee system and the "advance payment-settlement later system" for victims of unauthorized contracts such as trust fraud.

The minimum support amount is calculated by subtracting the amount already recovered by the victim from one-third of the deposit (minimum guarantee amount). Deductions include amounts received through the exercise of opposing power and priority repayment rights, repayments of lease deposit return claims, auction margins, and rent support amounts.

For example, if a victim with a deposit of 150 million won recovered 20 million won from an auction distribution and a 10 million won auction margin, they currently receive only 30 million won back. Going forward, they can receive an additional 20 million won, which is the difference from the 50 million won minimum guarantee, recovering a total of 50 million won.

Advance payments are disbursed prior to the completion of public auctions or court-ordered sales. It is a method of first disbursing the difference obtained by subtracting the already received amount from the minimum guarantee amount, and then settling it in consideration of amounts recovered additionally later.

The Korea Land and Housing Corporation (LH) will handle the disbursement and settlement tasks. LH must decide and notify whether to disburse and the amount within 90 days from the application date. In unavoidable cases, it can be extended once within 30 days. If there is an objection to the decision, an objection can be filed within 30 days from the notification date.

If a reason for return arises, such as recovering the deposit after receiving the support funds, it must be reported and returned. Failure to return within the prescribed period will result in an administrative fine of up to 30 million won depending on the number of violations.

The procedure for purchasing victimized housing has also been improved. When a public housing business operator purchases victimized housing through a public auction or court-ordered sale, if it assumes the deposit return debt of non-victimized tenants, this cost can be included in the housing acquisition cost. Procedures were also established allowing the Minister of Land, Infrastructure and Transport to request the loan and delinquency status of lessors from credit information concentration organizations.

Baek Seung-rok, head of the Victim Support General Division at the Ministry of Land, Infrastructure and Transport, stated, "We expect that Jeonse fraud victims will be guaranteed at least one-third of their deposits, providing substantial help for housing stability and victim recovery."

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