Starting next month, the government will implement a minimum guarantee system for victims of rental fraud, ensuring that if the amount recovered through auctions or public sales is less than one-third of their rental deposit, the state will cover the shortfall. Victims who contracted with individuals lacking legal rental authority, such as in trust fraud cases, will be eligible to receive an advance payment of up to one-third of their deposit before the auction process concludes.
On October 6, the Ministry of Land, Infrastructure and Transport announced that the revised enforcement decree of the "Special Act on Support for Victims of Rental Fraud and Housing Stability" was approved at the Cabinet meeting. The revised decree and related systems will take effect on November 13. This follows the special law's amendment and promulgation in May, which delegated the calculation methods for minimum support and advance payments, as well as the payment procedures.
The minimum support amount will be calculated by subtracting any amounts already recovered or received by the victim from the minimum guarantee amount, which is one-third of the deposit. This includes amounts received through exercising rights such as priority repayment and claims for the return of rental deposits, as well as any auction profits and rental support received when the government purchases the affected housing.
For example, if a victim with a deposit of 150 million won recovers 20 million won from auction distributions and 10 million won from auction profits, their total recovery amount would be 30 million won. They would then be eligible to receive an additional 20 million won as minimum support, bringing their total recovery to 50 million won.
An "advance payment and post-settlement" system will also be introduced for victims who contracted with individuals lacking legal rental authority. Under this system, the amount already received through claims for the return of rental deposits and any rental support payments will be deducted from the minimum guarantee amount, and the remaining amount will be paid in advance. Any additional recovery will be settled afterward. This advance payment system will also take effect on November 13.
The Korea Land and Housing Corporation (LH) will be responsible for the payment and settlement of these funds. Victims can apply for the minimum support after the auction profit calculation is completed upon requesting the purchase of affected housing. Other applications can only be made after the disposal process of the affected housing is completed. Applications for advance payments must be submitted before the purchase of the affected housing by LH or before the disposal of the housing is finalized.
LH must decide on the payment amount and notify applicants within 90 days of receiving their application. In unavoidable circumstances, this period may be extended by 30 days once. If there are objections to the decision or payment amount, applicants can file an objection within 30 days of receiving the notification.
If a victim receives support and subsequently recovers additional amounts, they must return the corresponding amount. Failure to report the return or to repay within the specified period may result in fines of up to 30 million won, depending on the number of violations.
The government is also revising systems to increase public purchases of affected housing. Public housing providers like LH will be allowed to include the costs of assuming the obligations to return deposits to existing non-affected tenants when purchasing affected housing through auctions or public sales.
The government has established procedures to verify the debt and delinquency status of landlords to support victims of rental fraud. The Minister of Land, Infrastructure and Transport can request data on landlords' loans, delinquency records, and unpaid credit card amounts from credit information agencies.
Baek Seung-rok, head of the Ministry of Land's victim support division, stated, "We expect that the minimum guarantee system and the advance payment and post-settlement system will help stabilize housing for victims of rental fraud and aid in their recovery. We will ensure thorough preparations for system implementation and victim guidance."
* This article has been translated by AI.
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