Almost 66% of the cases referred to local governments for suspected disturbances in real estate transaction order have been closed without charges. This has raised concerns about the effectiveness of enforcement due to discrepancies between initial investigations by specialized agencies and local government decisions.
On October 5, Yoo Sang-beom, a lawmaker from the People Power Party, revealed data from the Ministry of Land, Infrastructure and Transport and the Korea Real Estate Agency. From 2021 to July 2023, a total of 5,042 reports were filed with the Real Estate Agency's reporting center for disturbances in real estate transaction order.
The number of reports surged from 87 in 2022 to 491 in 2023, more than a fivefold increase. The figures continued to rise, reaching 1,208 in 2024 and 1,488 last year, with 1,094 reports received by the end of July this year.
After preliminary investigations, the Real Estate Agency forwarded 4,161 cases to local governments for further investigation and action. However, 2,748 of these cases, or 66.0%, were closed without charges at the local government level. Only 341 cases, or 8.2%, resulted in actual administrative actions such as cancellation of real estate agent registrations or work suspensions. Additionally, 485 cases, or 11.7%, were referred for investigation.
There were instances where the assessments of specialized agencies and local governments differed. In Changwon, South Gyeongsang Province, a report was filed against a real estate agent who allegedly purchased property under their spouse's name based on information obtained during the brokerage process. The Real Estate Agency found sufficient grounds for the allegation, but the local government concluded there was no wrongdoing, accepting the explanation that the transaction was between the seller and the agent's spouse, and that the purchase funds were personal assets of the spouse.
In Yongin, Gyeonggi Province, a real estate agent was reported for suggesting that a tenant bear the cost of long-term maintenance funds without proper explanation during a lease contract process. While the law stipulates that the property owner is responsible for these funds, the local government deemed it difficult to classify the agent's actions as a violation of real estate agent laws based solely on the inclusion of non-standard terms in the contract.
The high rate of cases ending without charges, despite initial investigations by specialized agencies aimed at filtering out collusion and illegal activities by real estate agents, has prompted calls for a review of investigation and enforcement standards. To ensure effective enforcement against disturbances in real estate transaction order, it is essential to establish consistent criteria for both reporting and local government actions.
Yoo stated, “Even when the Real Estate Agency conducts a preliminary screening with specialized personnel and refers cases, a structural disconnect occurs when local governments close two-thirds of them without charges after only formal written reviews. It is crucial to institutionalize a system for regular joint inspections between the Real Estate Agency and local governments and to quickly establish clear, unified guidelines for investigations and actions to prevent arbitrary judgments by local government officials.”
* This article has been translated by AI.
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