[Photo by Kim Yoo-sin]
A year has passed since a large-scale rental scam involving individuals with hundreds or thousands of houses was uncovered in South Korea. With the number of rental scam victims hitting 7,590, one of the most shocking aspects of the scam was the involvement of real estate agents. Police are currently investigating more than 100 certified real estate agents in connection with rental fraud, but illegal activities involving real estate agents are still rampant because, unlike lawyers, they are not sanctioned until proven guilty.
According to the Korea Association of Realestators on Wednesday, there were 452 cases of illegal activities by certified real estate agencies from October 2022, when the rental fraud scandal began to spread, until November 2023 to date. This is a figure compiled by just three staff members of the office traveling around the country to collect complaints from local governments. Many cases involved unregistered assistant agents advertising properties directly or unqualified individuals conducting real estate transactions.
The Ministry of Land, Infrastructure and Transport is preparing to announce measures to improve the certification system for real estate agents at the end of the year, it is expected to be controversial as it has been confirmed that the measures will be insufficient compared to the seriousness of the rental fraud situation. “The focus will be on changing the training system,” according to an industry insider who was involved in discussing the measures. Rather than strengthening compensation or punishment, they are expected to focus on “strengthening ethics education,” such as increasing the number of hours of practical training that certified real estate agents receive before opening their businesses. Given that 414, or 18.9 percent, of the 2,188 suspects prosecuted for rental fraud in April were certified real estate agents, this response is seen as inadequate.
Meanwhile, the Ministry of Justice, the National Police Agency, and the land ministry announced on Wednesday that they will continue their joint crackdown on rental fraud without a specific deadline to eliminate it. The nationwide special crackdown on rental fraud, which has been underway since July 2022, was initially scheduled to end by the end of this year.
By Yeon Gyu-wook, Choi Ye-bin, and Yoon Yeon-hae
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]