Unable to Hold General Assembly Due to COVID-19... Growing Calls to Extend the Housing Price Ceiling Suspension

To Avoid Application of Price Ceiling on Sale
General Resident Recruitment Announcement Must Be Made by the 28th of Next Month

Sale Schedules Delayed Daily Due to COVID-19... Holding General Meetings Also Difficult

At the regular general meeting of a redevelopment association held last year, members are undergoing verification procedures to enter. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Lee Chun-hee] As the spread of the novel coronavirus infection (COVID-19) continues, demands to postpone the end date of the grace period for the private land pre-sale price ceiling system are pouring in, putting the government in a dilemma.

Last October, the government announced an expansion policy for the private land pre-sale price ceiling system and decided to postpone its implementation for six months only for reconstruction and redevelopment complexes that have already received or applied for management disposition plan approval. These maintenance project sites must issue a resident recruitment announcement for general sales by the 28th of next month to avoid the application of the price ceiling system.

Before issuing the resident recruitment announcement, a general meeting where a large number of union members gather is essential to finalize related matters. However, due to concerns over the spread of COVID-19, the government and local governments have effectively banned such meetings. During the 2015 Middle East Respiratory Syndrome (MERS) outbreak, a confirmed patient attended a reconstruction general meeting, resulting in all 1,565 attendees being placed under self-quarantine.

As the grace period is set to end next month, desperate unions and industry players are voicing calls for an extension due to COVID-19. Gangdong-gu, where the Dunchon Jugong reconstruction project, which is expected to release as many as 4,786 households for general sale, is located, is a representative case. Gangdong-gu recently submitted an official letter requesting a postponement of the price ceiling system implementation. Previously, similar complaints were raised by Eunpyeong, Dongjak, Seocho, and Gangnam districts.

The Dunchon Jugong union submitted a sales guarantee certificate to the Housing and Urban Guarantee Corporation (HUG) on the 13th, setting the general sale price at 35.5 million KRW per 3.3㎡. However, HUG still insists on a sale price below 30 million KRW per 3.3㎡, making it unlikely that the sales guarantee will be issued unless HUG makes a proactive decision. The union is in a dilemma where it is difficult to avoid the price ceiling system unless it holds another general meeting and proceeds with the management disposition plan change approval process before the grace period ends.

Moreover, the Future City Citizens' Coalition, a recent gathering of reconstruction union groups, submitted a petition requesting a three-month extension of the grace period. Construction and housing industry organizations such as the Korea Construction Association, Korea Housing Association, and Korea Housing Construction Association have also requested an extension of the grace period.

The Ministry of Land, Infrastructure and Transport, the competent authority, is expected to organize the collected opinions within this week and decide whether to extend the grace period.

This content was produced with the assistance of AI translation services.