Korea Housing & Urban Guarantee Corporation (HUG) said it will dispose of dwellings owned by so-called malicious landlords through public auctions to recover jeonse deposit guarantees. The corporation said on the 9th that it signed a "business agreement on proxy public auctions" with Korea Asset Management Corporation (KAMCO) on the 8th and, as the first guarantee institution, launched public auction operations.
HUG plans to diversify its recovery method, which has centered on court auctions, through public auctions to raise recovery rates and strengthen financial soundness, while purchasing auctioned properties with firm jeonse contracts and supplying them as public rental dwellings.
HUG said public auctions have faster sale dates and bidding cycles than court auctions, and that bidding via KAMCO's online public auction system (Onbid) is possible, which it expects will cut the recovery period by more than half.
The targets of public auctions are properties of habitual defaulters, commonly called malicious landlords. Habitual defaulters are landlords whose names are disclosed after meeting legal criteria such as ▲ two or more debt defaults over three years ▲ subrogation debt of 200 million won or more ▲ filing for a preservative disposition (provisional seizure of real estate). HUG plans to start with about 200 pilot cases and steadily increase the volume consigned for public auction.