Gyeonggi-do Detects 701 Cases of Improper Management in Apartment Complexes, Including Misuse of Maintenance Fees

[Asia Economy (Suwon) = Reporter Lee Young-gyu] Gyeonggi Province has uncovered a large number of management entities that improperly handled tasks such as using funds for long-term repair projects from management fees instead of the long-term repair reserve fund, or renewing contracts with service providers without evaluating their project performance.

On the 14th, Gyeonggi Province announced that it had detected a total of 701 cases of impropriety after auditing 53 mandatory management apartment complexes in the province in the first half of this year (apartment complexes with 300 or more households, or those with 150 or more households equipped with elevators or central heating systems).

Among the major cases uncovered, the management entity of Complex A was found to have executed 18 cases worth approximately 44 million KRW, including fire facility repair work, using management fees from 2019 to 2021, although under the Apartment Housing Management Act, construction costs in the long-term repair plan should be executed using the long-term repair reserve fund.

The management entity of Complex B was found to have failed to evaluate the project performance of the existing service provider when renewing a direct contract for IT service work worth approximately 3.48 million KRW in 2021. The apartment management regulations stipulate that when renewing contracts with existing service providers, the management entity must conduct evaluations and have the resident representative meeting approve the contract at least three months before the contract expires.

The management entity of Complex C was confirmed to have failed to disclose the use of approximately 230 million KRW from the long-term repair reserve fund for exterior wall repairs by the end of the month following the usage date on the management office and each building’s bulletin board, as required by the Apartment Housing Management Act.

Through this audit, the province proposed three system improvement plans to the Ministry of Land, Infrastructure and Transport in May and June: ▲ improving procedures for emergency use of the long-term repair reserve fund ▲ mandating the registration timing of apartment maintenance performance ▲ mandating the recommendation of apartment accounting auditors and conducting specialized training.

First, since the approval of the long-term repair reserve fund usage plan currently occurs after the bid announcement when the contractor is already decided, leading to the resident representative meeting having to formally agree, it was proposed to approve the usage plan before the bid announcement. It also added provisions for post-reporting in cases of emergency use of the long-term repair reserve fund due to natural disasters or other urgent situations.

The proposal also includes mandating that apartment maintenance performance be registered in the Apartment Housing Management Information System within 30 days from the payment date. Currently, there is no separate registration deadline, which has led to cases where management entities either do not register performance or delay registration for extended periods.

Go Yong-su, head of the Apartment Housing Division of the province, stated, "Since apartment management is directly related to residents’ lives, we will strive to establish a transparent and efficient apartment management culture."

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