PPP and Government Wants to Grant Tenants First Purchasing Rights and Provide Low-Interest Loans for Jeonse Fraud Victims

Park Dae-chul (left), head of the People Power Party policy committee, and Minister of Land, Infrastructure and Transport Won Hee-ryong engage in a conversation during a meeting of the People Power Party and the government to discuss ways to stop jeonse fraud and to help victims at the National Assembly on April 20. Bak Min-gyu, Senior Reporter

On April 20, the People Power Party (PPP) and the government explained that to resolve the damage from jeonse fraud, they would postpone auctions and public sales by all financial institutions and suspend the auction when a financial institution sells bonds to a third party.

Park Dae-chul, head of the People Power Party’s policy committee made the announcement when he met with reporters after a meeting of the ruling PPP and the government on ways to stop jeonse fraud and to support victims at the National Assembly Thursday morning. Jeonse is a housing lease based on a one-time lump-sum deposit, which is returned to the tenant when the lease expires.

Park said, “We decided to actively review measures to improve the system, so that we can grant tenants meeting certain criteria the first purchasing rights when a home involved in the fraud is put up for auction.” He also said, “We are also considering ways to help by providing low-interest loans for a sufficient period of time to help the victim secure funds for the purchase when the bid is successful.” The PPP and the government also decided to operate a “consultation bus,” which will personally visit areas where many tenants fell victim to jeonse fraud, starting tomorrow and expand the organization and increase the staff of the victim support center.

According to Park, the government and the People Power Party will interpret organized jeonse fraud as a crime involving “the organization of criminal groups” and confiscate and preserve all the profits from the crime. They also decided to request the National Policy Agency for a special investigation into the issue including the backdrop of how an expensive team of legal representatives were appointed in the case of a person named Nam. A powerful politician in Incheon is suspected of being involved in Nam’s case. Park said, “As damages from jeonse fraud emerged nationwide, the party and the government have provided support measures on four occasions and conducted a government-wide special crackdown in the present government. However, we admit that they were somewhat limited in ensuring housing stability and in helping the victims.”

The PPP and the government appear to have requested the police investigation on the alleged involvement of an influential politician in Incheon to target the Democratic Party of Korea. The previous day, Park wrote on his social media account, “We need to uncover the truth about the suspicion that a powerful Democratic Party politician was behind the fraud.” The PPP is not mentioning any specific names or accusations, but continues to raise suspicions that a Democratic Party politician was involved in the jeonse fraud.

Park said, “The opposition party argues that the government should first return the deposits to the tenants using public funds, but when it comes to property involved in fraud, not enough money will go to the victims due to priority claims.” “Even if we purchase the property using public funds, only the parties with priority claims will benefit. So it cannot be a fundamental solution to save the victims,” he argued. He also said, “The public settlement of bad liabilities between private citizens is not advisable. Besides, it will add a burden on the people.”

In the opening remark, the PPP and the government sought the cause of the jeonse fraud in the previous government and argued that the opposition’s solution was unrealistic. Park asked, “What did the Moon Jae-in government and the Democratic Party do when these fraudsters took advantage of these vulnerable people?” and continued, “Don’t they know that the Special Public Purchase Act, which the Democratic Party is calling for, does not put top priority on compensating the victims, but only ensures compensation for other parties with priority claims while putting a significant burden on state finances?” Minister of Land, Infrastructure and Transport Won Hee-ryong also said, “The surging housing prices in the five years under the previous government followed by a unilateral amendment of lease related bills have had a major impact on the leasing market, spreading the cause of the present damage from jeonse fraud.”