[2020 National Audit] LH Public Sale Housing Residency Obligation Illegal Occupants Must Be Fully Investigated

[Asia Economy Reporter Yoo In-ho] Cases have been revealed where individuals falsely claimed to reside in public sale housing operated by Korea Land and Housing Corporation (LH) without actually living there.

On the 8th, at the LH government audit held by the National Assembly Land, Infrastructure and Transport Committee, Assemblyman So Byung-hoon of the Democratic Party of Korea presented such cases and emphasized the need for a full investigation.

According to the Public Housing Special Act, those selected as tenants of public sale housing must reside in the housing within five years from the initial move-in date, based on the ratio of the sale price of the housing to the housing sale prices in the surrounding area.

However, if there are unavoidable reasons prescribed by Presidential Decree, the period is considered as residing in the housing.

There are eight unavoidable reasons including work, livelihood, schooling, illness, marriage, and divorce. In such cases, related proof documents must be submitted to the public housing provider and approval for exemption from the residence obligation must be obtained.

Over the past 10 years, among 32,466 units sold by LH, 320 units received approval for exemption from the residence obligation due to such reasons.

According to Article 49-7 of the Public Housing Special Act, the actual residence of those subject to the residence obligation must be investigated. Although the enforcement decree delegates this investigation to public housing providers, no actual residence status investigations for sale housing have been conducted so far.

Assemblyman So pointed out the case of Assemblyman A from the People Power Party, which was broadcast as an example of evading the residence obligation by exploiting “unavoidable reasons.” Assemblyman A, who resided in Pocheon, submitted an application for exemption from the residence obligation on January 24, 2014, including related proof documents such as resident registration certificate, agricultural register, and self-cultivation certificate, citing residence outside the metropolitan area due to livelihood in Cheorwon County, and received approval on February 4 of the same year.

However, Assemblyman A moved back to Pocheon, Gyeonggi Province on February 13, 2014, less than 10 days after the exemption approval.

Assemblyman So criticized, “Assemblyman A moved his address back to the metropolitan area on February 13, 2014, and despite the obligation under the Public Housing Special Act to apply to LH, the implementer, to purchase the housing, he did not fulfill this obligation. He deceived LH into believing he continued to reside in the housing.”

According to Article 49-5, Paragraph 2 of the Public Housing Special Act, if a person subject to the residence obligation does not reside without reasons stipulated in Paragraph 1 proviso, the person must apply to the public housing provider to purchase the housing or for the status as a selected tenant.

There were also cases where public housing was allocated through elderly parents, and the residence obligation was evaded by exploiting “unavoidable reasons,” resulting in more than double the market price profit after the resale restriction period expired.

Mr. B signed a contract in August 2012 for an 85㎡ apartment in Wirye 22 Complex by paying 44 million KRW. At that time, Mr. B was a patient hospitalized in a nursing hospital in Daejeon since June 2011 due to dementia. According to the medical opinion submitted as proof, he was 92 years old (born in 1921) as of November 2013.

On January 9, 2014, the remaining amount including loan and move-in payment was fully paid. The total housing price was 301 million KRW. On the day all payments were completed, an application for exemption from the residence obligation due to illness was submitted.

One year later, in June 2015, Mr. B’s apartment was inherited by his daughter, and in January 2016, Mr. B’s son’s spouse registered a “right to claim ownership transfer provisional registration,” restricting the sale and other rights of the apartment inherited by Mr. B’s daughter.

In May 2017, the “right to claim ownership transfer provisional registration” was canceled, and in August of the same year, the apartment was sold for 630 million KRW.

In the case of Mr. C from Wirye 24 Complex, he was 83 years old (born in 1930) as of January 2014 when submitting the exemption application, and submitted a lease contract and medical certificate with Mr. D, who owns a house in Pyeongchang County, Gangwon Province, and received approval for exemption due to illness.

However, Assemblyman So’s office explained that the past address on Mr. C’s resident registration and the address on the land and building registry owned by Mr. D in Pyeongchang County matched, suggesting a mother-son relationship between Mr. D and Mr. C, the contracting parties.

After the resale restriction period ended in January 2017, the apartment was sold in July 2017 for 600 million KRW, more than twice the contract housing price of 259 million KRW.

Assemblyman So said, “These are cases of evading the residence obligation by abusing exemption reasons, all of which made more than double the market price profit compared to the contract price,” and emphasized, “A full investigation of all households that applied for exemption from the residence obligation is necessary.”

He added, “The person with the authority to conduct residence status investigations under the Public Housing Special Act is, in principle, the Minister of Land, Infrastructure and Transport, and the Ministry of Land, Infrastructure and Transport should request investigations and file complaints under the Public Housing Special Act.”

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