‘Tin can Jeonse’ tenant relief plan came out… HUG, private rental business special guarantee limited time operation

Kwon Hyung-taek, president of the Housing and Urban Guarantee Corporation, is giving a speech at the opening ceremony for 2022 in the auditorium of the headquarters on the 3rd.|HUG

The Housing and Urban Guarantee Corporation (HUG) announced on the 5th that it will temporarily operate a rental deposit guarantee (special guarantee) for houses with a debt ratio exceeding 100%. With this special guarantee, so-called ‘can-jeonse’ tenants whose combined amount of deposit and collateral exceeds the house price will be able to receive as much of the deposit as possible without going through separate legal procedures, HUG expected.

The operating period of the special warranty is 2 years from the 15th of the next month to the 14th of January 2024. The special guarantee applies to existing rental houses owned by individual rental business operators (excluding corporations) registered after August 18, 2020, when the mandatory guarantee was enforced. Private rental housing that has been rejected for guarantee subscription because the debt ratio exceeds 100% can sign up for guarantee during this period.

However, for the sound management of the rental market, HUG only permits the purchase of a guarantee for a rental deposit that does not exceed the housing price.

For example, if the house price is 1 million won, but you have debts of 1.1 million won, such as a renter’s deposit of 700,000 won and a bank collateral set amount of 400,000 won, the amount guaranteed by the HUG for the return of the tenant’s deposit is the house price (1 million won) and the collateral setting amount (400,000 won) 60,000, excluding In this case, the lessee can only get back 600,000 won, limited to 100,000 won, out of the 700,000 won deposit. However, HUG predicted that the return period and amount would be more beneficial than going through various legal procedures such as auctions to return the deposit.

To the extent that the return amount of the rental deposit can be partially reduced, individual rental business operators must obtain the consent of the lessee to sign up for a guarantee for only a portion of the rental deposit before signing up for a guarantee. HUG plans to require the submission of a ‘debt ratio reduction plan’ when applying for a guarantee in order to induce the rental business to adjust its debt during the special guarantee operation period. HUG President Kwon Hyung-taek said, “We will manage the risks in the rental market by operating the special guarantee system and faithfully fulfill our role as a public institution by supporting rental businesses and protecting tenants.”

Reference-www.khan.co.kr

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