Have you heard of the story that large-scale charter fraud is occurring these days? If you need to find a private house or have plans in the future, you will be very anxious. Even if it has nothing to do with me right now, there are probably many people who wondered ‘what the hell is going on’.
Today, I summarized the charter fraud that is shaking Korea. I summarized what kind of fraud cases were, how the fraud was done, and how the government’s measures to rescue the victims were progressing.
charter fraud, what happened?
News of large-scale jeonse fraud began to spread frequently from the second half of last year, when the real estate economy slowed. Among them, some scammers called ‘Villa King’ or ‘Construction King’ shocked people by holding more than 1,000 houses per person and committing charter fraud. In each of these major incidents, fraudulent damages ranging from billions of won to tens of billions of won occurred.
Among the numerous charter fraud cases, the case that has been attracting the most attention until recently was the ‘architecture king fraud’ that occurred in the Michuhol-gu area of Incheon. Unfortunately, some of the victims made extreme choices, making it a case that people are more concerned about.
Architect King? what is the name of the criminal
Media outlets commonly referred to other charter scam suspects as ‘The Villa King’. It’s because they cheated with hundreds of villas. However, the only suspect in Michuhol-gu, Incheon’s charter fraud is called the ‘architectural king’. There is something different between them. That’s why they are called different names in the news.
The construction king and the villa king are two types of scammers who use the most representative charter fraud methods. The fact that they own hundreds and thousands of houses and did not return the deposit to the chartered tenant is the same, but the scam method is a little different.
As ‘architecture king’ has the word ‘architecture’ in his name, he built the house himself. After building villas mainly in Michuhol-gu, Incheon, I took out a loan from a financial company using this house as collateral. Up to this point, it is no different from ordinary builders.
The problem is that I received a charter tenant in a house with a lot of mortgage loans, and built another building with the loan and the charter deposit. When other buildings were built, we continued to increase the number of buildings by taking out loans and tenant deposits in the same way.
The ‘architectural king’, who committed charter fraud in the Incheon area, received a chartered tenant for a house with a lot of mortgage loans, and continued to increase the number of buildings by building another building with the loan and charter deposit.
Instead of leaving a jeonse deposit to return to the tenants later, the number of houses was increased to thousands. Each building has a lot of loans to repay to the financial company, so if the real estate market deteriorates, there is a possibility that the tenants will not get their money back, but they did not inform us of this risk when signing the charter contract.
‘Villa kings’ constantly appearing
On the other hand, charter scammers called ‘villa kings’ did not build houses or take out loans. I bought a villa that had already been built and signed a charter contract at a price similar to or higher than the house price. For example, when you buy a house worth 100 million won, you sign a charter contract with a deposit of 110 million won at the same time, and you acquire the house without spending a penny of your own money. In this case, 10 million won would be left even after adding one house.
Of course, the fact that there is a possibility that the deposit will not be returned later was not properly informed to the tenants. This method is called ‘no-capital gap investing’. Gap investment refers to an investment in which you receive a chartered tenant rather than directly entering and living in a house while purchasing a house. I want to buy a house for the purpose of capital gains, but it is burdensome to pay the entire house price, so I buy a house with only the difference ( gap ) between the house sale price and the jeonse price. If you buy a house for 200 million won and get a chartered tenant for 150 million won, you can buy a house for 50 million won.
By the way, the villa kings bought the house without spending a penny at all. That’s why the name ‘no capital’ gap investment was attached to this method.
Why didn’t problems arise while we were building thousands of homes like this? This is because house prices are generally on the rise. Even if the house was increased in a very risky way, in the end, the house price rose or remained the same, so I was able to get a new tenant and return the jeonse deposit.
However, as the real estate market slowed down from last year and house prices fell rapidly, a problem immediately arose. The market price of the jeonse deposit plummeted, and new tenants were not found well, so they started not being able to return the deposit.
‘Villa Kings’ and ‘Building Kings’, who have returned tenant money in a completely ‘blocking’ way, will not be able to return the jeonse deposit unless they sell the house. The price had already fallen as quickly as it had fallen, so the more serious problem was that I couldn’t pay the money back even if I sold the house. It didn’t sell well either.
Massive Fraud Damage, How to Remedy?
As mentioned earlier, there is a difference between the fraudulent methods of the construction king and the villa king, so the way they support the victims is also slightly different. Because the King of Architecture took out a lot of loans from financial companies using the damaged houses as collateral, the house is subject to a mortgage for legal collateral. Since the mortgages of financial companies are set up before the tenants of the charter house, even if the house is auctioned off and sold, the financial company will take this money first. In fact, even if the house is sold at auction, it is difficult for victims to get their money back.
So, the victims of the Incheon Architecture King scam first demand that the auction be stopped. If the house is sold by auction and the financial company takes the money, there is no way to receive damage relief at all. There is no legal basis to stop the auction yet. The government is delaying the auction date by seeking cooperation from financial companies. As of the 12th, all 61 auctions of the ‘architectural king’ houses whose auction dates have arrived have been postponed.
Unlike the victims of the construction king fraud who ask to stop the auction process, those who have been victimized by the villa kings are asking to ‘go ahead with the auction, but first give them the winning bid’. This is because the house does not have a loan, so it is better to sell it through an auction and get some of the deposit back, and if you can afford to participate in the auction yourself, it may be a good choice to win the bid before others at a reasonable price. You can continue to live without being evicted from the house you used to live in.
‘Special Act on Charter Fraud’ that has not yet been decided
Realizing the seriousness of the situation, the government and the National Assembly began preparing countermeasures. I started to think about ways to prevent charter fraud, and I am also thinking about how to rescue the victims that have already occurred. The National Assembly decided to pass the ‘Special Act on Support for Victims of Charter Fraud’ on the 25th of this month.
Everyone agrees that we should help the victims. However, opinions are still divided in the National Assembly and the government over this special law. I haven’t decided yet on a specific way to support victims.
The government and the ruling party (power of the people) announced that they would give priority to the victims who want to win the auction for the house among the victims, and support them with various tax cuts and long-term loans at low interest rates when buying the winning house. .
If there is a victim who does not want to win the house at auction, a public institution such as Korea Land and Housing Corporation ( LH ) has come up with a plan to purchase the house by exercising the right to buy instead. The public institution will win the bid for the house instead, and the victim will be able to live for up to 20 years while paying only 30-50% of the market price.
A banner announcing the damage of the charter fraud is hung at the common entrance of an apartment in Incheon where damage to the charter fraud occurred.
On the other hand, the opposition parties (Democratic Party, Justice Party, etc.) are in the position that more active concrete measures are needed. The government is insisting on returning all or part of the deposit to the victims first, and recovering the money entered through legal action against charter scammers.
There is truth to both sides of the argument. This is why it is not always easy to come to a conclusion. The opposition party’s assertion that ‘it is most important for victims to get some of their deposit back quickly’ is also correct, and ‘using the method of injecting blood tax even though it is difficult to recover the funds in fact creates a problem of equity with other victims of fraud’ The government’s rationale is also correct.
In addition, both sides are still fighting over the scope of recognition as a victim of charter fraud. It is true that methods such as ‘no-capital gap investment’ are dangerous, but there may be landlords who failed to return the jeonse deposit after making a non-capital gap investment without the intention of deceiving or fraudulent tenants. In this case, it is true that even if there is a victim, it is difficult to conclude that it is charter fraud. So there is an ongoing disagreement over how broadly to support different types of victims.
What will be the outcome of this massive charter scam? Can the government and the National Assembly agree on appropriate measures to help victims and come up with preventive measures to protect the public from overflowing charter scammers?
※ Chartered contract, be sure to check this!
There are various methods of charter fraud besides examples such as villa kings and building kings. There are actually a lot of things to be careful about. Still, the methods that have created so many victims at once can usually be prevented by checking a few things carefully.
① Let’s check the market price first
To avoid fraudulent methods such as the ‘non-capital gap investment’ described above, you should choose a house whose sale price is definitely higher than the jeonse deposit. So, it is necessary to find out the market price of the house. You can use market price inquiry services such as the Safe Jeonse app of Housing and Urban Guarantee Corporation ( HUG ) and the ‘ KB Real Estate’ app of KB Kookmin Bank that aggregates market prices . It is best if the deposit for the deposit does not exceed 70% of the market price, and if it is not easy to find such a property, you can get it in the 70-80% range and then use the deposit return insurance for the deposit. New villas have been used a lot in charter fraud because the market price cannot be accurately determined, but if you are not confident in estimating the market price, it is better to avoid it. ② Let’s use the jeonse guarantee insurance It’s good to find out if the house is covered by the ‘jeonse deposit return guarantee insurance’ before signing the contract. This guarantee insurance is a system in which the guarantor returns the money to the lessee when the landlord fails to return the deposit. Since the jeonse deposit is similar to the market price, dangerous houses are not registered in the first place, and if the lessor habitually fails to return the deposit or if the building is an illegal building, subscription will be rejected.
③ Let’s check the certified copy of the registration book
Be sure to check the certified copy of the real estate register. It shows various rights, such as who the owner of the house is, whether there is a mortgage that has been set up after receiving a mortgage loan, and whether it has not been foreclosed on. Also, it is good to check the copy of the register at least once before the contract as well as after the contract. This is because new fraudulent methods are emerging, such as secretly obtaining a mortgage loan or changing the name almost simultaneously with the contract.
④ Let’s put in special contracts to prevent secret loans스포츠토토.
When signing a charter contract, it is a little safer if you include special contracts such as ‘the landlord does not set up a mortgage until the next day after the balance is paid’ and ‘the lessor does not take out a loan using the house as collateral’ . If the landlord is not a charter scammer, you can request it without much pressure because it is something that will easily agree to the special contract.
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