[비즈한국] Although the Seoul Metropolitan Government announced it would purchase social housing units affected by Jeonse fraud and provide advance security deposit refunds to impacted tenants, it has been confirmed that the necessary budget has not yet been secured. On August 26, the Seoul Metropolitan Government stated that it would provide advance refunds to tenants in two social housing properties where deposit non-refunds had occurred, and that the Seoul Housing & Communities Corporation (SH) would purchase and directly manage the properties.
Seoul City Announces Measures for Social Housing Jeonse Fraud
On August 26, the Seoul Metropolitan Government announced countermeasures regarding Jeonse fraud occurring in Seoul-managed social housing. The city stated it would provide a total of 344 million KRW in advance refunds to seven households that failed to recover their deposits from two social housing sites. At the same time, the policy is to terminate contracts with poorly managed business sites and transition them to an SH direct management system.
Seoul City announced that while tenants previously had to take legal action themselves, the new structure involves the city and SH stepping in to protect tenants and later holding the operators accountable. The plan aims to return deposits to affected tenants starting in October and exercise the right to indemnity against the operators. It was also announced that contracts with business sites where non-refunds occurred would be terminated immediately, and the buildings would be purchased by SH to be managed directly.
Previously, it was difficult to secure deposit guarantee insurance for land-lease social housing because the owners of the buildings and the land were different. However, Seoul City also announced that it would make guarantee insurance mandatory for social housing operators within two years, conditioned on SH’s commitment to purchase the properties.
Promising Advance Refunds... But Has the Budget Even Been Allocated?
Although Seoul City stated it would provide advance refunds and terminate contracts, BizHankook's investigation confirmed that the relevant budget has not yet been secured. A victimized tenant of a social housing unit reported, "I was contacted by an SH official. However, they said that because a concrete plan hasn't been established, funds haven't been prepared, and the payment schedule hasn't been set." Another tenant also stated, "We asked the Seoul Metropolitan Government about detailed plans, such as the timing of the deposit payments, but we didn't receive a schedule."
Contracts for the two business sites that Seoul City claimed would be terminated remain active. It appears that SH only sent official letters to the relevant social housing operators expressing their intent to purchase the properties after the city released the press release on August 26.
A Seoul City official explained, "It is true that the budget has not been allocated yet," but added, "SH is preparing a plan for the advance refund measures. Although it is delayed compared to the original plan, I understand that it is proceeding smoothly."
An SH official stated, "The purchase targets will be the two sites where deposit incidents occurred, and the goal for advance refunds is October. The purchase will proceed after that."
While Seoul City mandated that social housing operating companies obtain guarantee insurance within a two-year deadline, it remains uncertain whether they will actually be able to do so. An official from a social housing operating company explained, "Since you don't take out guarantee insurance immediately after starting a business, the debt ratio is bound to be high. Even if SH provides a purchase commitment, it's uncertain whether enrollment will be possible."
Meanwhile, it appears that the Seoul Metropolitan Government has not held separate discussions with organizations like the Korea Housing & Urban Guarantee Corporation (HUG) regarding guarantee insurance for social housing. An HUG official stated, "We have never discussed social housing guarantee insurance with the Seoul Metropolitan Government. However, even before this, guarantee insurance was possible in cases where SH provided a purchase commitment."