"Multi-Family Homes: LH to Receive Priority in Preemptive Purchase Rights"...Assemblyman Yeom Taeyoung Proposes Amendment to the Jeonse Fraud Special Act

Loopholes in the Current Law on Multi-Family Jeonse Fraud
When Preemptive Rights of LH and Victims Collide
New Clause Gives LH Priority in Exercising Purchase Rights

Assemblyman Yeom Taeyoung of the Democratic Party of Korea announced on the 14th that he sponsored a proposed amendment to the "Special Act on Support for Victims of Jeonse Fraud and Housing Stability." The amendment would give priority to the preemptive purchase rights of Korea Land & Housing Corporation (LH) over those of individual tenants when both parties compete for such rights.

The main provision of the amendment stipulates that, in cases where multiple jeonse fraud victims are identified within a single affected property, LH should be prioritized in exercising its preemptive purchase rights.

Representative Yeom Taeyoung is questioning related matters during the report on the status of support for victims of jeonse fraud at the Land, Infrastructure and Transport Committee's current issues inquiry on August 19. Photo by Yeom Taeyoung's office

The current law, which was revised in May, states that when both an affected tenant and LH wish to exercise their preemptive purchase rights simultaneously, the tenant’s right is prioritized. However, for multi-family housing—where multiple tenants may be affected, but only a single registration is possible—conflicts have arisen over who gets to exercise the right first.

In fact, a case in Hwaseong, Gyeonggi Province, in June demonstrated such a conflict between a victimized tenant and LH over preemptive purchase rights in a multi-family house. At this property, there was an unpaid jeonse deposit of KRW 720 million. Last year, four subsequent tenants, including tenant A, had transferred their preemptive purchase rights to LH. However, on the auction date, A unexpectedly exercised his own right and won the property, hindering other subsequent tenants’ ability to recover their deposits. The property has since seen one auction disapproval decision, and the auction date currently remains postponed.

The proposed amendment introduces a clause to prevent such cases, specifying that if two or more victims are affected by jeonse fraud in the same property and there is a conflict between the victim(s) and a public housing operator over preemptive purchase rights, the property must be sold to the public housing operator.

The amendment also reduces procedural burdens for victims. Under current law, if both the victim and LH want to exercise preemptive purchase rights, the victim must submit a request asking the court to approve the sale in their favor. The proposed amendment shortens the victim’s recovery period by allowing the court to handle the sale based solely on the victim’s declaration of intent, without requiring an additional petition for approval.

Assemblyman Yeom explained, "No other victim should be excluded from auction proceeds or housing support in the same property simply because of another victim’s individual choice. When there are multiple victims, it aligns with the purpose of the Jeonse Fraud Victims Act for the public sector to acquire the property and support recovery for all affected individuals."

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