0.1% Stakeholders Barred from Becoming Reconstruction Union Heads... 'Star Union Head Invitation Ban Act' to Be Discussed

National Assembly Land, Infrastructure and Transport Committee to Submit Bill at Next Week's Plenary Meeting
Specifies 'Maximum Share Ownership' as Qualification for Union Members
Blocks Loopholes for Minority Shareholding Union Leaders

[Image source=Yonhap News]

[Asia Economy Reporter Lee Ji-eun] A bill to prevent apartment reconstruction associations from inviting so-called ‘star association heads’ as executives, including the promotion committee chairperson, is expected to be discussed in the National Assembly as early as next week. This is due to loopholes that allow individuals holding less than 1% of shares to become association heads, leading to continuous corruption such as embezzlement of association funds. The core of the bill is to strengthen the qualifications for association heads by increasing the shareholding requirements.

According to the office of Yoo Kyung-jun, a member of the People Power Party, on the 18th, the National Assembly Land, Infrastructure and Transport Committee plans to hold a plenary session next week to submit the ‘Partial Amendment to the Urban and Residential Environment Maintenance Act (Revised Bill),’ also known as the ‘Star Association Head Invitation Ban Act.’

Due to the complex review process, reconstruction projects often become long-term endeavors taking 10 to 20 years. In the case of ‘Eunma Apartment,’ a symbol of Gangnam reconstruction, the reconstruction promotion committee passed the reconstruction review only after 19 years since its establishment. As a result, to expedite reconstruction, it is not uncommon to offer a small share to a ‘star association head’ with experience elsewhere and recruit them as association executives. However, this process sometimes leads to issues such as inciting residents or suspicions of embezzlement of public funds.

Current law stipulates that those who reside in the maintenance area and have either lived there for more than one year during the three years immediately preceding the appointment date or have owned buildings or land in the maintenance area for more than five years can become reconstruction association promotion committee members or association executives. This leaves room for bringing in external ‘association heads’ with only a small share of building ownership.

The revised bill further strengthens the qualifications for association members by requiring that during the three years immediately preceding the appointment date, the person must have lived in the maintenance area for more than one year, and if the building or land in the maintenance area is co-owned with others, the person must either own the largest share or, if the shares are equal, own that share. This blocks the loophole that allowed outsiders to be brought into the association with only a small share.

Representative Yoo, who proposed the bill, pointed out, “Under current law, one can become an association executive with only 0.01% of shares,” adding, “This act of undermining the legislative intent to strengthen the qualifications of association members is to prevent corruption issues.”

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