Suncheon-si, Members Should Carefully Decide on Joining Local Housing Cooperatives

Carefully Review Contract Details Such as Implementation Plans and Conditions for Project Fund Returns

[Asia Economy Honam Reporting Headquarters Reporter Lee Hyung-kwon] Suncheon City has issued a warning to be cautious when joining local housing cooperatives.

Currently, Suncheon City has registration for recruiting members for four local housing cooperatives (two in Dongoe-dong, one in Yongdang-dong, and one in Okcheon-dong), and the Yongdang The Soop (Namyang Hutton) local housing cooperative has been approved for establishment and is underway.

The advantage of local housing cooperatives is that, unlike general apartment sales, anyone who meets certain qualifications can become a member without needing a subscription savings account, and can purchase apartments at prices lower than the surrounding market rates.

On the other hand, local housing cooperatives recruit members without having fully acquired land or obtained usage consent, so if land acquisition or usage consent is not smooth, the project may not proceed or may stall, requiring caution.

Additionally, local housing cooperatives recruit members without obtaining approval for the housing construction project plan.

In other words, since members are recruited before receiving housing construction permits, if the housing construction project plan is not approved, the project may be canceled, and the resulting damages will be borne by the members.

In the case of a local housing cooperative promoted in Hwajang-dong, Yeosu City, Yeosu City did not grant project approval, leading to administrative litigation, where Yeosu City won, causing mental and financial damages to the local housing cooperative members.

Moreover, if the project is delayed, apartment construction may take a long time, and the delay can increase construction and project costs, resulting in additional contributions.

In other words, the responsibility for project promotion lies with the project entity, the cooperative and its members.

There are also cases where the apartment construction scale, timing, and method of assigning building and unit numbers promoted during member recruitment are disallowed or changed during the local housing cooperative general meeting and project approval process.

Furthermore, disputes among members and between the construction company and the agency can cause the project period to average over 10 years, leading to continuous damages to members.

Last year, the government revised some aspects related to local housing cooperatives.

Notably, strict regulations were imposed on the previous practice of recruiting members by designating specific building and unit numbers.

With the amendment to the Housing Act, from October 29 last year, local housing cooperative recruitment applications must be submitted only after project approval, and the resale of membership rights (member qualifications) is allowed only after project approval and 100% land ownership is secured.

In particular, since joining as a member involves mutual contracts with the business operator (the member themselves acting as the city), if the project is halted, there may be damages such as not being able to recover paid administrative fees (agency fees).

Therefore, to prevent damages, it is essential to carefully review and confirm the cooperative and contract terms such as project cost refund conditions.

While local housing cooperative housing construction projects offer the advantage of affordable housing prices, they also carry significant risks and require caution.

For these reasons, local governments promote caution in joining local housing cooperatives, but citizens are still tempted by the low sale prices.

Suncheon City is warning to be cautious about joining local housing cooperatives.

A Suncheon City official stated that due to concerns about potential damages to citizens from local housing cooperative member recruitment registrations, they generally reject such registrations, but if they lose in administrative appeals or lawsuits, they have no choice but to accept the registration.

Recently, in the case of a local housing cooperative in Area A that recruited members, Suncheon City did not accept the registration, but after winning an administrative lawsuit, the cooperative was able to recruit members.

Suncheon City also said it has proposed an amendment to the Housing Act to the Ministry of Land, Infrastructure and Transport to change the member recruitment registration to approval and to allow approval decisions to be made comprehensively in line with project approval.

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