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Arguments for abolishing the jeonse system

  • Legal Theory & Practice Review
  • Abbr : LTPR
  • 2023, 11(4), pp.569-585
  • Publisher : The Korea Society for Legal Theory and Practice Inc.
  • Research Area : Social Science > Law
  • Received : October 17, 2023
  • Accepted : November 25, 2023
  • Published : November 30, 2023

shin se duck 1

1대림대학교

Accredited

ABSTRACT

The jeonse system developed from the pawn system in the Joseon Dynasty, in which land was transferred to a creditor, and the creditor used the land and made a profit to cover the interest. It is a unique rental system that exists only in Korea and cannot be found in other countries. The jeonse right holder receives the lease at a lower price than the sale price. Those who use houses and set up leasehold deposits have developed by sharing mutual benefits by raising lump sum money without interest. However, jeonse prices have been repeatedly rising and falling due to the influence of external factors such as each administration and recession. The rise in jeonse prices acts as a factor for rent reversals or increased monthly rents for tenants, deepening housing instability, and if jeonse prices continue to rise, they are reduced to becoming rent poor who must take out jeonse loans. In addition, landlords are using the deposit money to purchase additional houses, increasing the demand for houses by purchasing houses beyond their ability, thereby disrupting the housing market and raising house prices. In the end, rapid fluctuations in jeonse prices pose risks to both landlords and tenants, and cause social problems such as reverse rent, tin jeonse, and jeonse fraud. To solve this, the policy must be changed to reduce or abolish jeonse and revitalize housing sales. The jeonse system will soon be abolished. The transition from jeonse to home sales will become faster, and monthly rent has already surpassed jeonse. Rather than forcefully maintaining the jeonse system, it is time to prepare for the private and monthly rent market.

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