[Exclusive] HUG's Jeonse Guarantee Claims Unrecovered for Over 3 Years Top KRW 1.4T, Near 20,000 Cases

Data from the Office of Democratic Party of Korea Rep. Yoon Jonggun

"Annual recovery figures alone make it difficult to assess"

"Long-term claims need to be managed separately"

The Housing and Urban Guarantee Corporation (HUG) had 19,943 unrecovered recourse claims that had been outstanding for at least three years among claims it was entitled to collect from landlords after paying tenants’ jeonse deposits on their behalf. The total amount stood at KRW 1.3941 trillion.

According to data on the status of jeonse guarantee claims that Yoon Jong-gun, a Democratic Party of Korea lawmaker on the National Assembly’s Land, Infrastructure and Transport Committee, received from HUG, unrecovered jeonse guarantee claims currently total 57,522 cases, worth KRW 7.0373 trillion. Long-term unrecovered claims outstanding for at least three years accounted for about 20% of the total amount.

From 2022 through August this year, HUG made subrogation payments totaling KRW 10.7947 trillion. Cumulative recoveries by year of claim origination amounted to KRW 3.9781 trillion, or about 37% of the total. As of the end of August this year, the recovery rate for recourse claims was 186.9%, calculated by dividing this year’s recoveries by this year’s subrogation payments. This year’s recoveries also include amounts collected on claims originating in previous years. Based on claims fully recovered over the past five years, recovery through court auctions and public sales took an average of 721 days. Even voluntary repayments made directly by landlords took an average of 336 days.

HUG has expanded the number of dedicated court case teams to 14 to recover claims. It has also pursued recovery measures, including referring 669 cases to the Korea Asset Management Corporation (KAMCO) after securing authority to conduct public sales. The entire KRW 7.0373 trillion in unrecovered claims, including recently originated claims, cannot be considered difficult to recover. The issue is that the KRW 1.3941 trillion in long-term unrecovered claims outstanding for at least three years needs to be tracked separately from annual recovery performance. This could be done by tracking how much of the claims originating in 2022 was recovered after one, two and three years, and how much of the claims originating in 2023 was settled over the same periods.

Rep. Yoon said, "Unrecovered jeonse guarantee claims that have been outstanding for at least three years need to be managed separately as long-term claims. We should consider using cumulative recovery rates by year of origination and long-term unrecovered claims as separate management indicators."

Rep. Yoon Jonggun of the Democratic Party of Korea. [Photo by the lawmaker's office]

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