The Supreme Court has ruled that a licensed real estate agent who drew up a fraudulent lease contract based solely on a fraudster's word — without conducting any actual brokerage — must bear liability for damages arising from a loan fraud scheme. [Yonhap]
The Supreme Court has ruled that a licensed real estate agent who drew up a fraudulent lease contract based solely on a fraudster's word — without conducting any actual brokerage — must bear liability for damages arising from a loan fraud scheme. [Yonhap]

A licensed real estate agent who drew up a fraudulent lease contract based solely on a fraudster's word — without conducting any actual brokerage — must bear liability for damages arising from a loan fraud scheme, the Supreme Court has ruled.

According to legal sources Sunday, the Supreme Court's First Division, presided over by Justice Seo Gyeong-hwan, overturned a lower court ruling in favor of the agent, identified only as B, in a lawsuit brought by lending firm A, and remanded the case to the Ulsan District Court.

The case stems from a jeonse loan fraud scheme carried out by a group led by a suspect identified as C in 2020.

C and his associates recruited fake tenants, forged jeonse lease contracts and used them as collateral to obtain loans from A and other lenders, then absconded with the funds. They were convicted of fraud.

A subsequently filed suit not only against C but also against B, the licensed agent who had prepared the lease contracts.

A argued that B had written the contracts on C's word alone, without actually brokering a deal between a landlord and tenant, and that because A had extended loans in reliance on those contracts, B bore responsibility for the resulting losses.

The first instance court recognized C's liability but dismissed the claim against B, finding that B likely had no knowledge of the fraud. It held that the responsibility for verifying whether collateral was genuine rested with the lending institution, and that a licensed agent owed no duty of care extending to lenders beyond the parties to a transaction.

The second instance court also sided with B, but the Supreme Court disagreed.

The court said that under the Licensed Real Estate Agents Act, a registered agent may prepare and issue a transaction contract only upon completion of brokerage. Issuing a contract without having brokered a deal is something an agent can readily foresee may lead a third party to rely on it as genuine.

Because B had prepared the jeonse contract on C's word alone — without meeting the landlord or tenant and without conducting any brokerage — the court found that B had violated the duty of care under the Licensed Real Estate Agents Act, causing A to suffer losses equivalent to the loan amount.

The court added that the conduct "can be characterized as aiding and abetting C and his associates in their scheme to fraudulently obtain loan proceeds."

However, the court noted that C had provided B with the landlord's actual personal information, and that the deposit had in fact been transferred into the landlord's account as listed in the contract — circumstances suggesting B had also been deceived by the organized and premeditated scheme. The court acknowledged B's negligence while indicating that the scope of damages liability could be limited.


greg@heraldcorp.com