Concerns rise over foreign landlords failing to return tenant deposits

A newly built officetel, a compact living space used for both residential and work purposes, is seen in Seoul’s Seodaemun District in this undated photo. Korea Times file

Kim, who had recently completed graduate school and started a new job, needed to move out of his studio apartment near campus. He tried to contact his landlord to retrieve his deposit but received no response. He later discovered that the landlord, a Chinese national, had left Korea and was no longer reachable.

With no way to recover his deposit directly, Kim turned to the Korea Housing and Urban Guarantee Corp. (HUG), a state-run company that compensates victims when landlords default on rental deposits.

Nearly six months after his lease expired, Kim finally received his deposit back via HUG. But the troubling experience left a lasting mark.

“The experience made me cautious about renting from foreign landlords, as I wouldn’t have gotten my deposit back without HUG’s help,” Kim said, requesting anonymity to protect his privacy.

Kim’s experience is part of a growing number of cases involving foreign landlords who fail to return tenant deposits — a rising concern as more foreign nationals purchase property in Korea.

According to HUG data obtained by Rep. Kim Hee-jung of the People Power Party, who is also a member of the National Assembly’s Land, Infrastructure and Transport Committee, 53 cases of unpaid deposits from foreign landlords were reported in 2024 alone.

The unpaid deposits in these cases amounted to 14 billion won ($9.95 million) and involved both jeonse and wolse rentals. Jeonse is a unique Korean rental system where tenants pay a large lump-sum deposit to the landlord in lieu of monthly rent, which is known as wolse.

The number and amount of unreturned deposits have steadily increased over the years, with three cases worth 500 million won in 2021, four cases totaling 700 million won in 2022 and 30 cases amounting to 6.8 billion won in 2023.

In such cases, HUG compensates the tenants and then seeks repayment from the landlords through a legal process known as subrogation.

However, recovering the money becomes extremely difficult once landlords flee the country.

From 2021 through August 2025, HUG paid out 21.1 billion won on behalf of foreign landlords but has recovered only about 6 billion won. More than 15 billion won remains unrecovered.

Most of the landlords involved were Chinese nationals, with 39 cases reported, followed by American landlords with 14 cases, Canadians with three and Japanese with two.

These developments come as foreign ownership of homes in Korea has exceeded 100,000 for the first time.

As more foreign nationals purchase property in Korea, concerns are growing that deposit-related fraud could become even more widespread.

“We are seeing a situation where taxpayers are covering the losses caused by a small number of irresponsible foreign landlords,” Rep. Kim said. “We need stronger systems, including exit bans for landlords involved in deposit defaults, to protect tenants and public funds.”