SEOUL, July 12 (Korea Bizwire) — The value of unreturned deposits for “jeonse” home rentals is increasing year after year, hitting an all-time high in the first half of this year, data showed Monday.
Under South Korea’s decades-old jeonse system, tenants pay a large lump-sum deposit, known as key money, to the landlord, which is then returned at the end of the rental agreement, which usually lasts two years.
During the lease period, the tenants do not pay monthly rent.
According to the data that Rep. Yang Kyung-sook of the Democratic Party received from the Korea Housing & Urban Guarantee Corporation (HUG), the number of incidents in which landlords did not return deposits to jeonse tenants stood at 1,595 cases in the first six months of this year.
The amount of jeonse money that landlords failed to return to tenants reached 340.7 billion won (US$260 million), the highest first-half figure in history.
By housing type, multi-unit houses accounted for 196.1 billion won or 924 cases, followed by apartments at 90.9 billion won or 389 cases, officetels (studio apartments) at 41.3 billion won or 211 cases, and row houses at 9.3 billion won or 47 cases.
By region, Seoul city and Gyeonggi Province accounted for 250.2 billion won, accounting for 73.4 percent of the total.
Some tenants were able to receive their deposits if they subscribed to the return guarantee offered by the HUG, which returns deposits to tenants on behalf of landlords if they do not return the deposits even after the jeonse contract expires.
M. H. Lee (email@example.com)