Korea expands HUG's remit to ease rent burdens for tenants

South Korea's land ministry has expanded the remit of the state housing guarantee agency so it can hold and manage money matching a tenant's jeonse deposit and pay the equivalent of monthly rent to the landlord, a measure aimed at easing rental costs and protecting deposit money.

The change was made through a partial revision to the enforcement decree of the Housing and Urban Fund Act. The new article 22, paragraph 1, item 4, adds to the Korea Housing & Urban Guarantee Corporation's scope of work a policy program under which the agency takes in money from a tenant equivalent to a jeonse deposit, manages and operates it, and pays the landlord an amount corresponding to rent.

The revision is intended for rental homes let on a monthly basis. Under the arrangement, the tenant hands over a sum comparable to what would have been a lump-sum jeonse deposit, and the guarantee agency, known as HUG, holds that money in trust rather than passing it to the landlord up front. The landlord then receives rent in installments from the agency.

The ministry's stated purpose is to relieve the housing cost burden on tenants and to safeguard their deposit money.