Full Victory in a Deposit Return Lawsuit Involving a “Jeonse Trap” Property

Case Details: The client entered into a residential lease agreement with a deposit of KRW 100 million. During the lease term, the client was unexpectedly informed that the property had been placed under foreclosure due to the landlord’s excessive debts.

The client promptly filed a claim for distribution in the auction proceedings and recovered approximately KRW 34 million. However, the remaining KRW 66 million of the security deposit was at serious risk of being unrecoverable.

The landlord became unresponsive and showed no intention of repaying the outstanding balance. Faced with the imminent loss of a substantial portion of the deposit, the client sought legal assistance from Decent Law Firm, which has extensive experience in deposit recovery and jeonse fraud litigation.

Decent's Strategy: Decent’s litigation team adopted a dual-track approach, pursuing both civil litigation and criminal proceedings to maximize recovery and apply effective pressure on the landlord.

1. Civil Action: Claim for Remaining Deposit and Statutory Interest

Decent argued that once ownership of the property changed through foreclosure, the landlord’s obligation to return the deposit became legally impossible to perform. Accordingly, the lease agreement was deemed terminated immediately, without the need for a separate notice of termination.

Based on this legal framework, Decent claimed not only the remaining unpaid deposit but also statutory delay interest at an annual rate of 12% under the Act on Special Cases Concerning Expedition, etc. of Legal Proceedings.

2. Criminal Complaint: Strategic Pressure on the Landlord

To prevent the matter from being treated as a mere civil dispute, Decent filed a criminal complaint for fraud. The firm demonstrated that the landlord was a so-called “no-capital gap investor” who had acquired the property solely through loans and tenants’ deposits, without any genuine repayment capacity.

In addition, it was established that the landlord had concealed material facts, including illegal large-scale renovations (so-called “room splitting”), at the time of entering into the lease. The criminal proceedings served as a powerful means of leverage alongside the civil lawsuit.

Outcome: "Complete Victory on All Claims"

Both the court and investigative authorities fully accepted Decent’s legal arguments.

First, in the civil lawsuit, the court ruled entirely in favor of the client, ordering the landlord to pay the full remaining balance of the security deposit along with accrued delay interest.

Second, in the criminal case, the police acknowledged the fraudulent nature of the landlord’s conduct, including the no-capital investment structure and deceptive practices, and referred the case to the prosecution with a recommendation for indictment.

A jeonse deposit is not merely a contractual issue — it is often a matter of survival for tenants.

Decent Law Firm provides strategic, decisive legal action to protect clients facing jeonse fraud and deposit loss risks.

#Jeonse fraud # Deposit return lawsuit # Jeonse trap property # Foreclosure deposit recovery # Real estate litigation

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