Ministry of Land, Joint Inspection on Bid Rigging at 10 Apartment Complexes Nationwide

Seoul, Gyeonggi, Ulsan, and a total of 10 complexes targeted

The Ministry of Land, Infrastructure and Transport announced on the 7th that it will conduct joint inspections of apartment complexes until April, together with the Fair Trade Commission and local governments, to eradicate bid-rigging and other ordering corruption in maintenance construction and service contracts.

An apartment mailbox in Seoul has a maintenance fee notice delivered. / Photo by Jinhyung Kang aymsdream@

This is the second joint inspection since the announcement of the "Improvement Plan to Eliminate Blind Spots and Ensure Transparency in Management Fees" last October. The investigation targets 10 complexes: 2 in Seoul, 4 in Gyeonggi, and 1 each in Incheon, Ulsan, Chungbuk, and Jeonbuk. The Ministry of Land explained that the selection was made considering local governments' audit plans, management fees, execution of long-term repair reserves, and signs of irregularities related to contractor selection.

For these complexes, the Fair Trade Commission will focus on investigating whether there was collusion among bidding companies. The Ministry of Land will inspect signs of irregularities, and local governments will conduct audits focusing on compliance with bidding procedures by management entities and overall apartment complex management.

Companies and management entities found guilty of corruption or illegal activities during the joint inspection will be subject to corrective orders, surcharges, or fines under the "Fair Trade Act" or the "Apartment Complex Management Act." The Fair Trade Act stipulates surcharges of up to 20% of sales for unfair joint actions, while the Apartment Complex Management Act imposes fines of up to 5 million KRW for violations of contractor selection criteria.

Additionally, according to the management fee improvement plan, the Ministry of Land plans to complete revisions to the "Guidelines for Housing Management Companies and Contractor Selection" by April. Key points include submitting administrative disposition confirmation certificates for violations of the Fair Trade Act during bidding, adding resident or external committee evaluators during evaluations, and involving interested parties during lottery-based contractor selection.

The scope of management fee disclosure will be expanded from apartment complexes with 100 or more households to those with 50 or more households, and amendments to the enforcement decree and enforcement rules of the Apartment Complex Management Act, including the introduction of an obligation for management office heads to verify management fee account balances, will also be completed within the period. The system will be improved to allow miscellaneous income within management fees to be disclosed separately as resident-contributed income and jointly contributed income in the Apartment Complex Management Information System (K-apt).

Minister of Land, Infrastructure and Transport Won Hee-ryong stated, "Apartment complex management fees are a type of housing cost that residents strive to save and economize on, and corruption such as inflating construction costs to excessively burden residents with management fees must be urgently eradicated. Through this joint inspection, we will strictly warn against illegal acts such as management corruption that cause unnecessary increases in management fees."

He added, "Going forward, we will create an Apartment Complex Management Information System that allows residents easier access to management information and strict monitoring of important ordering projects."

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