HUG introduces trust system to protect deposits and guarantee landlord income

HUG President Choi In-ho introduced the Secure Jeonse and Monthly Rent Trust to prevent Jeonse fraud, offering landlords a fixed 4.3% monthly return and up to two months of income coverage during vacancies.

The 'Secure Jeonse and Monthly Rent Trust' system is drawing attention for preventing Jeonse deposit return accidents while providing landlords with stable monthly rental income. The structure allows tenants to resolve anxieties regarding the return of Jeonse deposits, while landlords can expect fixed income in line with the trend toward monthly rentals.

On HUGTV's 'Caenane Speech' featuring HUG President Choi In-ho, the specific operational principles of the Secure Jeonse and Monthly Rent Trust were introduced to reduce the social costs of Jeonse accidents and respond to changes in the rental market. Choi mentioned the Jeonse fraud issue, which has recently been described as a social disaster, emphasizing the need for a national-level response.

HUG manages Jeonse deposits, ensuring safety while maintaining the tenant 'Jeonse system'

The core of the Secure Jeonse and Monthly Rent Trust is that instead of the tenant giving the Jeonse deposit directly to the landlord, the deposit is entrusted to HUG, a public enterprise. By entrusting the Jeonse deposit to a public institution, tenants can fundamentally block the risk of not receiving their deposit when the contract ends. Even if a situation arises where a landlord cannot return the Jeonse deposit after the contract expires, HUG already holds the funds, allowing for direct return to the tenant.

“Jeonse accidents involving tens of thousands of people and tens of trillions of won are a social disaster,” Choi explained. “Protecting Jeonse deposits is not just about preventing chaos for tenants, but about solving a problem for the entire nation.” He argued for the necessity of the system, pointing out that if HUG's guarantee resources are exhausted due to Jeonse accidents, the state must eventually replenish the capital, which could ultimately become a burden on all citizens.

Landlords receive 4.3% fixed return and monthly income without vacancy concerns

The merits for landlords are also clear. Amid the recent trend of the rental market being restructured around monthly rentals, the Secure Jeonse and Monthly Rent Trust serves as an alternative for landlords seeking stable income. The structure involves HUG managing the Jeonse deposit entrusted by the tenant and paying the resulting profits to the landlord in the form of monthly rent.

According to Choi, landlords can receive a fixed monthly rent of approximately 4.3% from HUG. This level is higher than typical bank interest rates, and a key feature is that there is no concern regarding non-payment because a public institution guarantees the payment. Furthermore, even if a tenant vacates suddenly and a vacancy occurs, HUG pays the landlord monthly rent for approximately two months to fill the income gap caused by the vacancy.

“From the landlord's perspective, it is a highly meritorious system as they can expect fixed income through an agreement with a public institution and even reduce concerns about vacancies,” Choi evaluated.

Source: original video (YouTube)