HUG Puts 30 Foreign Landlords' Homes Up for Compulsory Auction Over Jeonse Deposit Defaults [Real Estate AtoZ]

46 Foreign Landlords Fail to Repay Subrogated Debts
16 Undergoing Process to Secure Execution Titles
Properties of 30 Owners Sent to Compulsory Auction

It has been found that over the past year, 30 foreign national landlords failed to return their jeonse deposits on time, resulting in their properties being put up for auction. With incidents involving foreign landlords defaulting on jeonse deposits increasing, the Korea Housing & Urban Guarantee Corporation (HUG) introduced a "one-strike out" policy in February last year, under which the corporation immediately initiates debt recovery procedures after a single default. Since there are still foreign-owned properties in the pre-auction stage due to non-repayment of debts, this number is expected to rise further.

According to HUG's data as of March 11, the total number of foreign landlords who failed to repay their debts to the corporation as of last month stood at 46. Among them, properties owned by 30 landlords have already been put up for auction. For the remaining 16, HUG is in the process of securing enforcement titles to proceed with compulsory auctions. The total amount of subrogation payments HUG has made to tenants in this process amounts to 16.7 billion won.

Since February last year, HUG has tightened its debt recovery measures for jeonse deposits involving foreign landlords. When a foreign landlord cannot return a jeonse deposit, HUG subrogates the payment to the tenant and immediately initiates compulsory enforcement proceedings.

This is a measure equivalent to those applied to "closely monitored multi-property debtors" who have defaulted on jeonse deposit guarantees three or more times. For general landlords, HUG allows for debt repayment to be deferred for up to six months following a consultation, even after a guarantee default. However, for landlords who have had three or more subrogation payments made on their behalf, if contact is lost, if they have not repaid any of their guaranteed debts in the past year, or if the amount of unrecovered claims exceeds 200 million won, their properties are sent to auction immediately without any grace period. HUG has strengthened its debt recovery measures for foreign landlords to this same level.

HUG implemented these measures because the number of incidents involving foreign landlords has been increasing every year. According to data provided by Assemblywoman Kim Hee-jung's office from HUG, there were only 4 such cases in 2022, but this jumped to 30 in 2023 and 53 in 2024. The total amount of guarantee defaults also surged from 400 million won in 2022 to 14 billion won over the past two years.

Additionally, as the number of foreign landlords continues to rise annually, calls have grown to strengthen oversight of jeonse deposit guarantee defaults. According to the Court Registration Information Plaza, the number of foreign landlords who received a fixed date for jeonse contracts increased from 11,152 in 2020 to 20,650 last year, a 1.8-fold increase.

The corporation plans to continue strengthening its response to guarantee defaults involving foreign landlords. Previously, in January, Assemblywoman Kim Hee-jung proposed an amendment to the Immigration Control Act that would prohibit foreign landlords listed as habitual defaulters from leaving the country. A HUG official stated, "We plan to provide the necessary data for the legislative discussions and cooperate with relevant agencies regarding the bill to ban the departure of foreign landlords registered as habitual defaulters," adding, "If the law is amended in the future, we intend to promptly implement the changes into our system."

This content was produced with the assistance of AI translation services.