Seoul Districts 100% Interest-Free Loans for Reconstruction Safety Inspection Costs

Legal basis established for safety inspection cost support through the passage of the ‘Seoul City Urban and Residential Environment Improvement Ordinance’ amendment... On the 5th, Seoul City distributed the ‘Reconstruction Safety Inspection Cost Support Work Processing Standards’... Advance support including guarantee insurance subscription fees for loan funds, accelerating reconstruction promotion

Nowon-gu delivered a petition signed by over 70,000 residents urging the amendment of the Seoul City ordinance, actively providing opinions on establishing safety inspection cost support standards to reduce residents' burden

Apartment Complex in Nowon-gu

The path to 100% interest-free loans for Seoul City reconstruction safety inspection costs has been opened.

For aging complexes wishing to reconstruct but unable to proceed due to lack of safety inspection funds, the safety inspection costs will now be lent at 100% interest-free.

This follows the passage of the amendment to the Seoul Metropolitan Government’s Urban and Residential Environment Improvement Ordinance in March, and on the 5th, Seoul City established and issued detailed implementation guidelines titled ‘Reconstruction Safety Inspection Cost Support Work Processing Standards’.

Nowon-gu explained that the safety inspection cost support aims to assist complexes struggling to secure safety inspection costs amounting to hundreds of millions of won, enabling rapid reconstruction promotion. If more than half of the landowners in the desired complex agree and apply, 100% of the reconstruction safety inspection costs will be supported interest-free.

Additionally, the guarantee insurance subscription fees for the safety inspection loan funds are also advanced to further reduce the burden on reconstruction promotion complexes. The guarantee insurance fees must be returned in cash together with the safety inspection costs by the end of the loan period or before applying for project implementation plan approval.

The district office plans to soon distribute notices about cost support to complexes pursuing safety inspections so that those wishing to receive support can apply for loans.

Until now, Nowon-gu has made significant efforts for the advance support of safety inspection costs. It delivered a petition signed by over 70,000 residents urging the amendment of the Seoul City ordinance and actively provided opinions on establishing safety inspection cost support standards to reduce residents' burden.

The original proposal was to support 90% of the safety inspection costs with interest-bearing loans applying the base interest rate, requiring collateral (or joint liability) bonds. However, the district office submitted opinions advocating for expanding support up to 100% of the inspection costs, providing unconditional support such as interest-free loans (no joint liability required), and considering alternatives like guarantee insurance if bond security is necessary.

The final work processing standards issued later reflected most of the district office’s opinions, allowing autonomous handling by local governments regarding loan limits, interest rates, and advance payment of guarantee insurance fees.

Oh Seung-rok, Mayor of Nowon-gu, said, “The 100% interest-free loan for reconstruction safety inspections is the result of Nowon-gu’s relentless efforts to advance safety inspection cost support.” He added, “We will continue to do our best with all possible support and strong drive so that the wishes of residents longing for a pleasant residential environment can be realized quickly.”

Dobong-gu (Mayor Oh Eon-seok) expects that complexes which had been blocked from proceeding after passing the on-site preliminary safety inspection but failing the safety inspection threshold will accelerate their project promotion as it implements reconstruction safety inspection cost loan support.

The district office began guiding and accepting loan support applications for rapid safety inspections of reconstruction projects in the district from July 10.

Loan funds are supported up to 100% of the safety inspection costs, interest-free. The loan period is a minimum of 3 years and a maximum of 10 years, and must be repaid before applying for project implementation plan approval. When selecting a construction company, repayment must be made within 30 days from the selection date.

To apply for reconstruction safety inspection loan support, consent from more than half of the landowners and a guarantee certificate for the loan amount from guarantee insurance are required. After applying with the consent forms, a resident representative group of up to 10 members must deposit the full safety inspection fundraising amount and sign a loan agreement with the district mayor.

However, areas where lawsuits among landowners related to reconstruction are ongoing or where guarantee insurance subscription is rejected are disqualified from loan support. Also, if loans were obtained by false or fraudulent means or if the maintenance project implementation method was changed to a designated developer, the loan must be repaid within 6 months as it is subject to cancellation.

Seodaemun-gu announced that complexes designated as ‘Reconstruction Safety Inspection Target Complexes’ with consent from more than half of the landowners can receive loan support by signing an agreement with the district office (including safety inspection costs, repayment methods, and deadlines).

To expand resident participation in projects, the district office set different support ratios relative to safety inspection costs based on the ‘loan support application consent rate.’ The minimum loan support amount is 10 million won, and if the landowner consent rate is ▲80% or higher, 100% of reconstruction safety inspection costs are supported ▲below 80%, 75% ▲from majority to below 60%, 50% is supported.

The loan period is up to 10 years or until before applying for project implementation plan approval. Upon selecting a constructor, the loan must be repaid within 30 days from the selection date. However, the ‘guarantee insurance fee’ must be borne by the resident representatives requesting the safety inspection (up to 10 people). This is a minimum safety measure as the district office supports the budget. As of 2023, there are six apartment complexes over 30 years old in Seodaemun-gu subject to reconstruction.

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