Strengthening Management of Cooperative Private Rental Housing Projects... "Expecting Tenant Protection"

[Asia Economy Reporter Jeon Mijwon] The authority of local governments will be strengthened in the process of promoting cooperative-type private rental housing projects. Accordingly, it is analyzed that the protection of members' property rights and transparent project management will become possible.

The Ministry of Land, Infrastructure and Transport announced on the 26th that the amendment to the "Special Act on Private Rental Housing," which includes these contents, will be enforced from the 27th.

The cooperative-type private rental housing project is a business in which cooperatives or social cooperatives supply private rental housing to their members.

Under the current law, when supplying private construction rental housing, the project operator must report to the head of the local government and recruit tenants through a public recruitment method.

However, recently, cases have occurred where cooperatives were established for the purpose of supplying private rental housing to members, and tenant recruitment regulations were bypassed through member recruitment.

Also, in some cases, members were recruited without providing detailed information about the main contents and progress of the project, or even after receiving payments worth tens of millions of won, proper refunds were not made to members who withdrew, causing damage.

According to the amendment, from now on, if a cooperative established for the purpose of supplying 30 or more private rental housing units to members or a cooperative promoter intends to recruit members, they must report to the mayor, county governor, or district head of the jurisdiction and recruit members through a public recruitment method.

Furthermore, the entity recruiting members must explain necessary details such as the location and area of the private rental housing construction site, and the status of usage rights and ownership acquisition to applicants wishing to join the cooperative before signing the membership contract, and obtain confirmation through signatures.

The recruiting entity must ensure that applicants deposit the cooperative membership fee in a separate deposit institution such as a bank or insurance company, and the deposit institution must manage it separately from other financial assets.

A Ministry of Land, Infrastructure and Transport official said, "We will continue to devise various institutional improvement measures to prevent tenant damages in advance and to supply rental housing that meets diverse housing demands."

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