6.8 Trillion Won Lost to Jeonse Fraud... HUG Funded 6.4 Trillion Won Over 5 Years

Rising Financial Burden Due to Guarantee Incidents

As financial burdens on the Housing and Urban Guarantee Corporation (HUG) have increased due to incidents involving jeonse fraud and failure to return rental deposits, government investment in the agency has exceeded 6 trillion won over the past five years.

According to data submitted by Assemblyman Kim Jongyang, a member of the National Assembly's Land, Infrastructure and Transport Committee, on September 16, HUG's cash and in-kind capital contributions totaled 6.4389 trillion won from 2021 to last year. The annual breakdown shows 390 billion won in 2021 and 383.9 billion won in 2023, but the figure surged to 4.7 trillion won in 2024. Last year, 965 billion won was contributed.

HUG operates the jeonse deposit return guarantee system, which protects tenants' deposits. If a landlord is unable or unwilling to return the deposit or engages in fraud, HUG returns the deposit to the tenant first and then recovers it from the landlord through subrogation. In the past, higher property value criteria and guarantees covering up to 100% of the jeonse value led to inflated deposit amounts and subsequent defaults by landlords. HUG has also been at the forefront of implementing relief policies for victims throughout the jeonse fraud rectification process.

Due to the subrogation payment burden under the jeonse deposit return guarantee, HUG's financial performance has been poor for several years. The corporation's net loss was 408.7 billion won in 2022, rising to 3.8598 trillion won the following year. Its net loss for 2024 is estimated to reach 2.5198 trillion won. Subrogation payments over the same period totaled 924.1 billion won (2022), 3.5544 trillion won (2023), and 3.9948 trillion won (2024). HUG returned to profitability last year, recording a net profit of 1.5749 trillion won.

However, the balance of unrecovered receivables remains high. The amount increased steadily from 292.7 billion won at the end of 2021 to 4.0445 trillion won at the end of 2023, 6.853 trillion won at the end of 2024, and 7.1253 trillion won at the end of 2025. As of the end of June this year, the balance had slightly decreased to 6.817 trillion won.

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