As of January 2018, assets under management in real estate trusts amounted to 217 trillion won, of which 140 trillion won was accounted for by real estate security trusts to substitute for collateral security when obtaining loans from finance companies.
In some cases, however, where a trust property is a leased house used mainly for rent, the trust company has concluded a trust contract that is unfavorable to the lessee, leaving him/her being without any legal protection and unable to recover the lease deposit.
Practically, a trust company to which ownership is transferred through a trust contract must directly enter into a lease agreement as the lessor and the entity that assumes the rights and obligations pertaining to the trust property. However, such companies often arranged for the truster, who is the original owner of the leased house, to enter into the lease contract for convenience.
Meanwhile, all responsibilities concerning the repayment of the lease deposit have been passed onto the truster through the trust contract, under which the trust company bears no responsibility.
Such wrongful customs and unfair agreements by trust companies have allowed trusters to willfully deceive lessees, enter into false lease contracts, and misappropriate large amounts of money from lease deposits. In such cases, where the leased houses are sold by public sale, many lessees are left homeless even without minimal legal protection such as the preferential repayment right.
Accordingly, this Amendment aims to hold trust companies responsible for repaying the lease deposit for any leased house that is a trust property, and to specify that they shall not be exempted from their duties on the grounds of a trust contract. The Amendment also stipulates that trust companies shall prepare and update data on the lease status of leased houses that are trust property, provide lessees with a written confirmation of the lease contract when entering into a lease contract in the name of the truster, and otherwise fulfill their fiduciary duties, thereby ensuring lessees have any legal protection (Article 3-7).

Require trust business entities pursuant to the Financial Investment Services and Capital Markets Act to prepare data on the lease status of leased houses that are trust property at a certain period each year, and to update the data in the event of any change; and prescribe that where a trust business entity enters into a lease contract in the name of the truster for a leased house that is a trust property, it shall, within 1 month of signing the contract, provide the lessee with a written confirmation of the lease contract, including the legal relationships, etc., under the trust (Article 3-7 newly inserted).