[비즈한국] Big Hit Music is facing a prolonged struggle to recover a 6-billion-won "jeonse" (lump-sum deposit) for a luxury villa in Cheongdam-dong, Seoul, which the company leased under its name. Although the contract expired in 2024, the return of the deposit has been delayed due to the landlord's financial difficulties and subsequent legal proceedings. It is known that BTS member Jungkook lived in this villa.
Contract Ended in October 2024, But Deposit Still Not Returned
According to Bizhankook's coverage, it has been confirmed that Big Hit Music, a label under HYBE and the agency representing BTS, has yet to receive its deposit back regarding the jeonse contract for a luxury villa in Cheongdam-dong, Gangnam-gu, Seoul. In April 2022, Big Hit Music leased a unit in a high-end villa in Cheongdam-dong under the company's name. The contract period was until September 30, 2024, and the jeonse deposit was 6 billion won.
Big Hit Music's jeonse contract appears to have been made to support the housing needs of its artists. It is known that BTS member Jungkook lived in this villa. At the time, Jungkook was building a detached house in Itaewon. After purchasing the land in 2020, he received a building permit in 2022 and began construction at the end of the same year.
The timeline of the jeonse contract aligns with Jungkook's relocation. Big Hit Music's contract was set to expire on September 30, 2024, and was extended by one month thereafter. Jungkook mentioned moving into his Itaewon house during a live broadcast at the end of 2024. Considering this, it is highly likely that the Cheongdam-dong villa was used as Jungkook's residence until the completion of his Itaewon house.
At the time of the contract, the unit had approximately 4.8 billion won in collateral loans. However, as Big Hit Music signed a 6-billion-won jeonse contract, all existing mortgage rights were canceled. It is possible that Big Hit Music entered into the contract on the condition that the existing loans be cleared. In typical jeonse contracts, if a landlord has existing loans, it is not uncommon for the new tenant's deposit to be used to pay off the debt, followed by the cancellation of the mortgage before the contract is finalized.
It is also notable that Big Hit Music registered a "jeonsegwon" (right to a lease deposit). This right is established to protect against situations where the deposit might not be returned. In the case of high-value corporate leases, such a right is often registered to ensure the deposit is safely recovered.
HYBE: "Unlikely to Incur Losses"
The issue is that the landlord's financial situation deteriorated rapidly thereafter. Starting from the end of 2023, new mortgage rights, primarily held by lending firms, were placed on the property. The newly established collateral amount is approximately 1.7 billion won in terms of the maximum bond amount. This suggests the landlord borrowed additional money while under financial pressure.
As the financial crisis deepened, the auction process eventually began. The Seoul Central District Court issued an order for a voluntary auction of the property in August 2024. However, the actual sale process has not yet proceeded. The landlord subsequently went through a rehabilitation process but was eventually declared bankrupt by the court late last year.
The jeonsegwon registered in the name of Big Hit Music has not yet been canceled. The company explained that the right remains in place because the jeonse deposit has not been returned.
The key factor is the recovery amount of the deposit. Since Big Hit Music has secured priority rights through the jeonsegwon registration, it can receive preferential distribution in the auction process. However, if the final bid price falls short of the deposit amount, they may not be able to recover the full sum.
A neighboring unit owned by the same landlord was recently sold at auction for approximately 4.9 billion won. Although this unit is on the same floor as the one Big Hit Music contracted, it is a duplex structure with a larger area of 205㎡ (approx. 62 pyeong). The unit contracted by Big Hit Music has a dedicated area of 183㎡ (approx. 55 pyeong).
The company maintains that there is no major problem with recovering the deposit. An official from HYBE, the parent company of Big Hit Music, stated, "Asset protection measures are in place, so there is almost no possibility of loss." However, the official did not elaborate on the specific details of these measures.