South Korea proposed introducing a bill to protect the housing rights of people that have been scammed millions of dollars in rental schemes as the fallout from the crisis grows.
(Bloomberg) — South Korea proposed introducing a bill to protect the housing rights of people that have been scammed millions of dollars in rental schemes as the fallout from the crisis grows.
The ruling People Power Party and government ministries will introduce the bill next week, PPP’s Chief Policymaker Park Dae-chul said in a televised briefing on Sunday. It will include an option to have state-run Korea Land & Housing Corp. buy affected properties and convert them into public rental homes.
The turmoil stems from a traditional rental payment system called jeonse, where tenants pay at least half of the value of the property up front and get their money back at the end of their lease term, instead of paying monthly rent. That provides property owners with cash to invest or buy more homes.
In the suspected fraud cases, landlords didn’t return the funds. That’s led to apparent suicides from penniless tenants and a police investigation. More than 1,700 tenants have lost an estimated 309.9 billion ($233 million) and about half of the victims were in their 20s and 30s, the police said last week.
The party and government will also grant affected tenants a pre-emptive right to buy the property, and will seek to revise a separate law to add “aggravated punishment of specific crimes” in regards to rental fraud, Park said.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.