[Contribution] Practical guide to preventing damage from real estate lease fraud

Attorney Kim Jeong-beom of Daeryun Law Firm

According to the Housing and Urban Guarantee Corporation (HUG), the scale of rental guarantee accidents, for which the Housing and Urban Guarantee Corporation reimburses on behalf of landlords who fail to return the rent to tenants, recorded KRW 4.3347 trillion last year. In Daejeon, where I work, the number of rental fraud cases has increased rapidly since last year, and if you look at the list of ongoing cases, you can see that various lawsuits are being filed directly against famous rental fraud perpetrators in Daejeon, as well as various landlords, real estate agents, and the Korea Association of Real Estate Agents.

Of course, there is a need for structured and continuous social discussion on institutional solution methodologies to prevent jeonse fraud, but for individuals living in an extremely specific reality, a "practical guide to preventing jeonse fraud damage" seems to be urgently needed. The following is a guide to preventing damage that is useful right now, organized by transaction stage, focusing on the regrettable aspects of proceeding with lawsuits and providing contract advice.

First of all, if it is 'before the transaction stage', it is essential to "confirm the real estate registration certificate." It is important to verify the identity of the lessor through this. In particular, if the object is jointly owned, explicit confirmation of the intention of all co-owners is required.

If one of the co-owners appears, or if all co-owners do not appear, it is necessary to check whether the agency contract has been properly concluded (the power of attorney and seal certificate must be checked for forgery, and if possible, it is recommended that the lease contract be concluded directly with the lessor at the real estate agent's office).

In addition, you must first check the existence of a senior deposit bond (be sure to check the moving-in unit viewing history), the establishment of a lien, etc., and calculate whether you can fully recover your precious deposit when the real estate object in question ultimately reaches the auction stage.

In addition, it is necessary to check whether the lessor is delinquent on taxes through a licensed real estate agent and view the details of unpaid national and local taxes from the lessor on the date of concluding the lease contract.

Next, if you have entered the 'transaction stage such as writing a contract', it is important to prepare various 'safety devices' by including various special provisions in the contract contents, which include ① a special agreement that prohibits the transfer of the real estate object in question after the date of payment of the balance until opposition occurs due to a move-in report and a confirmed date (if this is violated, the lessee's right to terminate the lease contract is reserved and the amount of compensation for damages is scheduled); ② a temporary restriction on changes in ownership as above In addition, there is a special contract that prohibits the creation of any security rights such as a mortgage (to secure the right to priority payment), ③ a special contract that asks the lessor to blame the lessor if it is impossible to borrow the deposit money due to a defect in the subject matter, and ④ a special contract that stipulates that if there is a tax arrears, it must be repaid in full before the balance due date, and if this is violated, the lease contract is invalidated and the deposit doubled is compensated.

Lastly, if you have ‘finished the transaction stage’, you must file a move-in report immediately on the day of signing the lease contract and receive a confirmation date. Also, if possible, please sign a lease guarantee insurance contract through a bank.

Still, if you have doubts about something, we recommend that you actively seek advice from a lawyer. If you do not attach various safety measures while providing the deposit, which accounts for a huge portion of your property, it is no different from entrusting your property to a stranger, relying on favor.

Attorney Jeongbeom Kim

Lawyer at Daeryun Law Firm

- Public defender at the Supreme Court and Jeonju District Court
- Publicly elected representative of the Central Administrative Appeals Commission
- Director of Korea Criminal Procedure Law Society
- Director of Operations, Korea Administrative Law Association
- Daejeon Youth Tomorrow Center Counselor
- Member of the Gwangju High Prosecutors' Office Warrant Review Committee

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