Enforcement Penalty for Saengsuk Deferred Until Next Year... Special Cases for Saengsuk Use Change Not Extended

The government has decided to postpone the enforcement of penalty fines for using residential lodging facilities (Saengsuk) as residential units until next year. The special exemption applied when changing the use of Saengsuk to residential officetels will end next month without further extension.

On the 25th, the Ministry of Land, Infrastructure and Transport announced plans to grant a grace period for lodging business registration of Saengsuk until the end of next year and to defer the imposition of penalty fines.

This measure takes into account the time required for owners who intend to use Saengsuk as lodging facilities to register their lodging business, the remaining lease period of actual resident tenants, and the time needed for discussions on improving related Saengsuk regulations. Under current law, if Saengsuk is used as a residential unit, starting from the 15th of next month, it will be considered an illegal building and a penalty fine of 10% of the publicly announced price will be imposed annually.

The special exemption, which was temporarily applied for two years when changing Saengsuk to residential officetels, will end on the 14th of next month without further extension. This decision considers complaints from nearby residents regarding parking and school overcrowding, as well as fairness toward compliant users who are using Saengsuk as lodging facilities.

Saengsuk refers to lodging facilities equipped with cooking facilities, introduced to meet the demand for long-term stays by foreign tourists and others. Since 2017, as real estate prices soared, Saengsuk has been increasingly supplied as a substitute housing facility without housing-related regulations, often used as a loophole. The number of Saengsuk units approved for use annually increased from 3,483 units in 2015 to 9,730 units in 2017, and further rose from 15,633 units in 2020 to 18,799 units in 2021.

Among the 49,000 units without lodging business registration, an estimated 30,000 units (61%) are owned for investment purposes (where one owner owns two or more units), and 18,000 units (37%) are owned by those holding 30 or more units.

Accordingly, the Ministry of Land, Infrastructure and Transport plans to actively review the overall Saengsuk system, including facility and sales standards and approval procedures, together with related ministries during the grace period to ensure Saengsuk is used for its original lodging purpose.

Additionally, the Ministry plans to thoroughly inspect the usage status of unregistered lodging owners in cooperation with local governments, and to strictly monitor and manage compliance for newly approved Saengsuk units that have received building permits, sales, and usage approvals since the 2021 regulatory amendments.

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