The 11 Billion KRW Jeonse Scam in Dongdaemun : How to Protect Yourself
In Seoul’s Dongdaemun District, a landlord failed to return approximately KRW 11 billion in rental deposits to tenants, including students from Kyung Hee University and Hankuk University of Foreign Studies, causing widespread concern.
Many of the victims were international students and young renters unfamiliar with Korea’s housing market. The risk of losing a housing deposit presents a serious threat to international students pursuing their studies away from home. [Source]
As fraud-related risks continued to grow, the government introduced jeonse policies to protect tenants. However, it produced an unexpected side effect across the market.
Why Have Both Rent and Maintenance Fees Increased Around University Districts?
Ironically, government policies introduced to prevent rental deposit fraud have also increased housing costs for international students. After the Korea Housing & Urban Guarantee Corporation (HUG) tightened the eligibility criteria for rental deposit return guarantees to 126% of a property’s officially assessed value, many landlords began reducing jeonse deposits and making up for lost revenue by raising monthly rent.
In northeastern Seoul, home to Korea University and Kyung Hee University, the combined average monthly rent and maintenance fee has recently reached approximately KRW 710,000. This represents an increase of about KRW 100,000 to KRW 200,000 per month compared to the previous year. Depending on the property, housing costs have risen to KRW 700,000 to over KRW 1 million per month.
As a result, measures intended to protect tenants have inadvertently increased the financial burden on international students.
Category | Previous Conditions (Before Policy Change) | Current Conditions (After 126% Rule) | Impact on International Students |
|---|---|---|---|
Deposit Guarantee Eligibility | Approximately 150% of assessed property value | Tightened to 126% of assessed property value | Landlords can collect smaller jeonse deposits |
Market Response | Majority of contracts structured as jeonse | Significant increases in rent and maintenance fees instead of larger deposits | Higher fixed monthly expenses |
Average Housing Cost in Northeastern Seoul | Rent + maintenance fees around KRW 500,000–600,000 | Rent + maintenance fees around KRW 710,000 (up to KRW 1 million or more) | Additional monthly burden of KRW 100,000~200,000 compared to the previous year |
As these figures demonstrate, strengthened protections for the jeonse market have created a ripple effect that directly impacts the monthly rental market. For international students with limited income, rising housing costs can place considerable pressure on both academic and daily life.
Finding Safer Housing as an International Student
As housing insecurity and living expenses continue to rise, one of the most reliable ways for international students to protect themselves is to choose housing operated by a trusted professional management company or institution.
One-on-one contracts with individual landlords can expose tenants to risks such as delayed deposit returns or rental fraud. In contrast, professionally managed corporate rental housing greatly reduces these structural risks.
Corporate-managed rental housing also offers benefits of deposit protection and contribute to a better overall living experience. Key advantages include:
Professional Deposit Protection: Because a corporation owns and operates the property, the risk of rental fraud or deposit non-payment is extremely low.
Systematic Building Maintenance and Hygiene Management: Dedicated staff regularly maintain the property, helping ensure a clean and comfortable living environment.
Convenient Locations: Many properties are situated near universities and transit hubs, making commuting to campus easier.
Transparent Contracts and Fee Structures: Lease terms are clearly disclosed, reducing concerns about unclear conditions or unexpected maintenance fee increases.
These features make corporate rental housing an attractive option for international students who are adapting to a new language, culture, and housing system.
A Stable Alternative in Corporate Rental Housing
Among corporate housing providers, Episode, operated by SK D&D, is widely recognized as a dependable housing option for young adults and international students. Because the company directly owns and manages its properties, residents do not face uncertainty regarding deposit returns.
Key benefits include:
Secure Deposit Management: Through a professionally managed corporate asset structure backed by a major business group, Episode provides a high level of security for tenant deposits and significantly reduces fraud-related risks.
International Student-Friendly Services: The leasing process is transparent, and detailed guidance is provided, making it easier for students unfamiliar with Korea’s real estate system.
Resident Community Spaces: Lounges, shared kitchens, fitness facilities, and coworking areas offer a higher standard of living beyond basic housing.
At a time when rent and maintenance costs continue to rise, choosing a professionally managed housing solution such as Episode, where deposits are well protected and buildings are carefully maintained, can offer meaningful long-term value.
FAQ
Q1. Can international students enroll in Korea’s rental deposit return guarantee program?
According to publicly available information, international students who have completed foreign resident registration and hold valid residency status may apply for a rental deposit guarantee if they meet certain requirements, such as obtaining a fixed-date lease certification and registering their residence. However, eligibility requirements vary by product, and procedures can be complex. Students should verify details directly with HUG or the relevant institution before signing a contract.
Q2. What should I check before signing a lease to avoid rental deposit fraud?
Tenants should review the property registry to determine whether there are existing mortgages or higher-priority claims against the property. It is also advisable to confirm whether the landlord has outstanding tax liabilities. Completing a change-of-address registration and obtaining a fixed-date certification immediately after moving in are also important steps.
Q3. How does a corporate rental housing contract differ from a lease with an individual landlord?
Leases with individual landlords are typically arranged through a real estate agent and signed between private parties. In corporate rental housing, tenants sign directly with the management company. Standardized contracts are used, and responsibility for deposit management and property maintenance is clearly defined.
Q4. Are short-term lease options available as rents continue to rise around university districts?
Some corporate housing brands and professionally managed residences offer flexible lease terms designed around academic semesters and vacation schedules. Students should confirm the specific policies of the location they are interested in.