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25 Areas Susceptible to Risk of Failure to Return ‘Jeonse’ Deposit

Written: 2023-04-21 13:48:25Updated: 2023-04-21 15:37:09

25 Areas Susceptible to Risk of Failure to Return ‘Jeonse’ Deposit

Photo : YONHAP News

The risk of problems with lump-sum “jeonse” rental deposits affecting multi-unit buildings and studio apartments is prevalent in 25 areas nationwide.

According to the Korea Real Estate Board on Friday, 25 regions between January and March this year posted a sales-to-rental deposit price ratio for such housing units of over 80 percent.

Ratios in excess of the threshold carry a greater chance that the landlord may be unable to return the deposit to the tenant, even if the property is sold.

Recent cases of organizational fraud also involved the landlord taking out a loan during construction, in which the lending institution had priority for the right to collateral security.

Moreover, in the wake of a decline in housing prices, there were even cases in which the jeonse price exceeded that of the sales price, such as in the central city of Daejeon, where the ratio stood at 131-point-eight percent.

A recent series of deaths by suicide of young people has been attributed to problems with such deposits, prompting the government to pursue remedies to the system.

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