Endless Conflicts at Dunchon Jugong... Lien Exercised on Complex's Commercial Stores

Association "No debt relationship with PM company"
PM company "Unilateral notice of contract termination"
Commercial dispute must be resolved for reconstruction to resume

On the 30th, the reconstruction site of Dunchon Jugong Apartment in Gangdong-gu, Seoul was visited. On the temporary wall in front of Dunchon Station on Line 5 and Dunchon Oryun Station on Line 9, there was a banner suggesting the exercise of a retention right for the new commercial building. Photo by Hwang Seoyul

[Asia Economy Reporter Hwang Seoyul] As the construction halt at Seoul Dunchon Jugong Apartment continues for over a month, the company managing the new commercial complex project within the complex has initiated a lien claim. Conflicts related to the commercial complex, which were also included in the construction resumption conditions set by the construction consortium, have intensified, raising concerns about the prolonged construction stoppage.

On the 30th, near the reconstruction site of Dunchon Jugong Apartment, in front of Dunchon Station on Line 5 and Dunchon Oryun Station on Line 9, a new banner reading "New Commercial Complex Lien Claim in Progress" was displayed. Since the 28th, REITs In Holdings, the project management company (PM company) for the commercial complex reconstruction within the complex, has put up banners on the outer temporary walls of the new commercial complex and started exercising its lien rights.

REITs In Holdings and the 'Integrated Commercial Complex Committee,' formed by the current union's general meeting resolution, have been in conflict since the end of last year. In July of last year, the current union passed a resolution at an extraordinary general meeting to amend the union's bylaws to establish the Integrated Commercial Complex Committee, a group of commercial complex union members, and to revoke the status of the previous commercial complex representative group, the 'Dunchon Apartment Commercial Complex Reconstruction Committee.' Subsequently, in December, the Integrated Commercial Complex Committee notified REITs In Holdings of contract termination, making the conflict with the PM company more visible.

On the afternoon of the 30th, the entrance to the Dunchon Jugong Reconstruction Maintenance Project in Gangdong-gu, Seoul was firmly closed. Only silence filled the Dunchon Jugong project site, where the project has come to a halt.
Photo by Hwang Seoyul

The union claims that since the PM company is no longer under contract, the lien claim itself is invalid. They also argue that the PM company neither owns the new commercial complex nor has any debtor-creditor relationship with the union. A union official stated, "They arbitrarily placed the lien, and we plan to submit a legal opinion from a law firm to the construction company requesting the removal of the banner."

On the other hand, REITs In Holdings maintains that it is difficult to accept the contract termination and that exercising the lien is justified. They argue that since the contract was made in December 2012 through the 'Commercial Complex Reconstruction Project Management Contract' and funds were invested under a fixed equity system, the contract termination is merely a unilateral notice. A representative from REITs In Holdings said, "We are currently seeking legal advice regarding the unilateral contract cancellation notice and monitoring the situation," adding, "After the construction consortium halted construction, the commercial complex construction also stopped, leading us to exercise the lien."

Meanwhile, among the nine conditions for construction resumption submitted by the construction consortium to Seoul City on the 20th of last month, the seventh condition states, "Resolution of legal disputes related to the commercial complex representative group and REITs In Holdings or smooth project progress," indicating that obstacles remain before construction can resume. A construction consortium official said, "Since the permits for the commercial complex and the complex project were issued together, it is difficult to obtain completion approval unless the commercial complex-related disputes are resolved," and added, "Legal disputes must be settled before construction can resume."

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