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| ▲ A coalition of civic groups fighting against housing rental scams stage a demonstration at a plaza in the western port city of Incheon on April 18, 2023. (Yonhap) |
PPP-rental scam measures
PPP, gov't discussing measures to provide financial support to rental scam victims
SEOUL, April 19 (Yonhap) -- The ruling People Power Party (PPP) and the government are in talks to come up with measures to help victims of a massive home rental scam, including putting in government money to help victims buy those homes or giving them the priority purchase right, a lawmaker said Wednesday.
The move comes after three victims took their own lives in recent months after losing rental deposits in a scam in the western city of Incheon, highlighting the dismal situation the victims are under and sending the government scrambling for remedies.
President Yoon Suk Yeol has also expressed concern and endorsed a government plan to ask financial institutions to temporarily suspend auctions of the affected homes.
"The PPP and the government are considering either to publicly procure the housing units involved in the scam or give victims priority to purchase the houses," the senior lawmaker of the PPP said in a call with Yonhap News Agency.
"But further discussions would be necessary due to budget constraints," the lawmaker said.
Under the scam, the mastermind, surnamed Nam, rented highly collateralized homes to victims for deposits worth tens of millions of won. The homes ended up being put up for auction as Nam failed to repay debts to financial institutions, leading to victims facing eviction without getting their deposits back.
Similar rental scams have been reported elsewhere.
"We need to look further into whether the government should provide funds as loans or grants," the lawmaker said. "We also need to take the issue of fairness into account because there are also victims of other rental scams."
The PPP plans to hold a meeting with the government on the issue Thursday.
"We will immediately form a task force within the party to communicate directly with the victims and listen to what they have to say and come up with specific measures by putting our heads together," Rep. Park Dae-chul, the PPP's chief policymaker, said in a Facebook post.
Under South Korea's jeonse system, tenants pay a large lump-sum deposit, known as key money, to the landlord, which is then returned at the end of the rental agreement, usually lasting two years. During the lease period, the tenants do not pay monthly rent.
Tenants, however, may be unable to get their deposit back if landlords conceal their mortgage.
The combined value of disputes surrounding the jeonse system reached 1.2 trillion won (US$980 million) in 2022, doubling from a year earlier, according to the finance ministry. The number of jeonse fraud cases also shot up to 618 cases from the previous year's 187.
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