Yonhap News,
, ‘The size of lease guarantee accidents caused by landlords not returning the security deposit to tenants even after the lease contract has ended is rapidly increasing like a snowball. This was revealed to be nearly 2 trillion won by April this year. It is interpreted as a phenomenon resulting from a chain reaction of lease fraud and reverse sublease issues. It is expected that the total annual amount of accidents this year will surpass the all-time high.’,
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, ‘According to the Korea Housing Urban Guarantee Corporation (HUG) on the 19th, the amount of guarantee insurance accidents for returning lease security deposits in the first four months of this year amounted to 1.9062 trillion won. There were 8,786 cases of accidents. By month, the amounts were 292.7 billion won in January, 648.9 billion won in February, 493.8 billion won in March, and 470.8 billion won in April. The guarantee accidents from January to April this year increased by 823.2 billion won, 76% higher than the 1.83 trillion won in the same period last year. The amount of money HUG returned to tenants for security deposit claims from January to April this year (subrogation amount) was 1.2655 trillion won, 55.8% larger than the subrogation amount of 812.4 billion won in the same period last year. It is speculated that this year’s accident amount will surpass last year’s record high of 4.3347 trillion won.’,
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, ‘The lease guarantee insurance is a product where HUG uses its own funds to first return money to tenants after landlords fail to return the security deposit on time, and then recovers the amount through foreclosure and auction over a certain period.’,
,
, ‘As the scale of guarantee accidents increases, HUG’s subrogation recovery rate for landlords hovers around the 10% range. According to HUG, the auction process takes time, usually requiring about 2 to 3 years from subrogation to debt collection. The recent surge in subrogation has caused the recovery rate to decline.’,
,
, ‘The annual subrogation recovery rate of the lease guarantee insurance, which was 58% in 2019, has been continuously declining. It dropped to 24% at the end of 2022 and 14.3% at the end of last year. HUG paid tenants a total of 3.5544 trillion won on behalf of landlords last year, but only recovered 508.8 billion won. The subrogation recovery rate in the first quarter of this year was 17.2%, where 884.2 billion won of security deposits were returned on behalf and 152.1 billion won were recovered.’,
,
, ‘This issue is resurfacing in the market for row houses and multi-unit buildings (villas). The lease rate of villas in Seoul, which dropped to the upper 60% range last year, has been gradually increasing again this year. According to the Korea Real Estate Institute, in April this year, the average lease rate for row houses and multi-unit buildings in Seoul was 72.0%, showing a continuous increase from 70.4% in January.’,
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, ‘Usually, when the lease rate exceeds 80%, it is classified as a “hollow lease,” where tenants may not be able to get their security deposits back properly even if they sell the house.’,
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, ‘If this situation continues, there is a possibility that the amount of security deposit accidents will skyrocket.’, , ‘The place with the highest villa lease rate in the country was Gwangyang in Jeollanam-do, at 104%. In Seoul, Gangseo-gu (80.2%) had the highest villa lease rate, followed by Guro-gu (79.0%), Gwanak-gu (77.8%), and Jung-gu (76.8%).\n’]