Joint Inspection of 'Redevelopment and Reconstruction' Including Cheongdam Samik... 69 Legal Violations Detected

The Ministry of Land, Infrastructure and Transport and the Seoul Metropolitan Government announced on the 12th that they detected 69 violations of laws and regulations as a result of a joint inspection of redevelopment and reconstruction associations conducted from November 9 to 20 last year in the Cheongdam Samik, Jamsil Jinju, and Susaek 6 districts in Seoul.

The Ministry and Seoul conducted on-site inspections of association operations in the three districts last year together with the Korea Real Estate Board, lawyers, and accountants. As a result, 69 violations related to association operations and contractor bidding were detected.

By category, the detected cases included 17 in budget and accounting, 32 in service contracts, 16 in association administration, 3 in information disclosure, and 1 related to contractor bidding.

The Ministry plans to take measures including requesting investigations for 12 cases, issuing corrective orders for 24 cases, recovery actions for 4 cases, and administrative guidance for 29 cases.

First, regarding violations related to association operations, the main issues detected were failure to record details of business promotion expenses over 500,000 KRW, failure to prepare corporate card cashbooks, and failure to attach detailed statements of contingency fund usage when approving contingency fund expenditures at general meetings.

Despite matters closely affecting members’ rights, such as borrowing funds and concluding service contracts, requiring approval at general meetings, many cases were found where projects proceeded without such approval.

Cases involving contracts for various service agreements related to project promotion, such as appraisal, water supply relocation work, and ground surveys, made without general meeting approval, or borrowing funds from financial institutions without approval, will be referred for investigation.

Additionally, companies that performed administrative tasks such as acting on behalf of general meetings and collecting written consent forms without being registered as specialized maintenance project management firms will also be subject to investigation requests.

The Ministry also detected cases where bonuses, annual leave allowances, and overtime pay were paid to full-time executives or employees without basis in the association’s regulations. These matters will be addressed by requiring the associations to recover the payments.

To protect members’ right to know, association executives who violated the obligation to disclose essential information such as minutes of general meetings and delegates’ meetings, which must be disclosed via the internet and other methods regarding major materials on maintenance project implementation, will be referred for investigation.

Some bidding proposals promised to provide certain apartment facilities such as system air conditioners and balcony windows to members, but these were not reflected in the actual contracts; these cases will be subject to administrative guidance.

The Ministry and Seoul emphasized, "We will take lawful measures such as investigation requests, corrective orders, and recovery for the detected cases and will continuously inspect contractor bidding and association operations annually to prevent damages caused by opaque association management and unfair practices."

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