This marks the first case in which a victim of rental fraud has fully recovered their deposit through residential support utilizing auction profits from the Korea Land and Housing Corporation (LH).
On the 17th, LH announced that the residential support utilizing auction profits from rental fraud victim housing is officially being implemented. Since the enforcement of the revised special law on November of last year regarding support for rental fraud victims and housing stability, LH has been supporting the recovery of rental fraud victims' deposits by utilizing auction profits.
The method for utilizing auction profits involves LH acquiring damaged housing through a public auction or bidding process, and then using the auction profit (LH appraisal price - winning bid price) to support rent. Any remaining auction profits after rent support are immediately paid to the affected tenant to assist in the recovery of the victim's deposit loss. The affected tenant can reside rent-free for up to 10 years.
Through this support, a case has emerged in which the entire deposit was recovered for the first time in the country in Dohwa-dong, Michuhol-gu, Incheon, where rental fraud was severely prevalent. The rental fraud victim of an officetel in this area has recovered their entire deposit of 70 million won through auction profits and court dividends.
Following the revision of the special law, which allows for deposit recovery support as part of residential assistance, applications to LH for the acquisition of damaged dwellings have surged. Before the revision, there were about 1,600 applications for the acquisition of damaged dwellings, but after the revision, an additional 7,500 applications have been received, surpassing the current total to over 9,000. LH plans to expedite support by continuing the processing of individual dwellings that have been put on hold in public auction.
LH has acquired a total of 244 damaged dwellings so far. Compared to the number of acquisitions last year (90 dwellings), 154 additional dwellings have been secured this year alone. The process of appraisal for utilizing auction profits for residential support is also underway for those dwellings.
In addition to supplying rental housing through the auction of damaged dwellings, LH is also supporting the supply of public rental housing near the damaged dwellings. Up to now, residential support has been completed for a total of 1,429 units, including 1,145 units of acquisition rental housing and 256 units of rental housing for lease. In the case of rental housing, a maximum deposit support of 240 million won is provided.
You Byung-yong, the acting director of LH's Housing Welfare Headquarters, noted that "Due to the revision of the special law, we are continuing to provide more effective support for victims, now including deposit recovery support for rental fraud victims," and added, "As applications for support continue to rise, we will actively work to swiftly implement the related procedures so that victims can return to their daily lives as soon as possible."