The Trust Redevelopment Project Claimed to Have Expertise... Controversies Arise Due to 'Clumsy' Project Execution

In some redevelopment projects conducted through the trust method, the clumsy management by the project implementers is coming under scrutiny. Representative cases include Yeouido Hanyang Apartment, where the selection of the construction company failed twice, and Yeongdeungpo Singil Woosung 2nd and Uchang Apartments, where the owners' general meeting to apply for the project implementation plan was rejected.

Many owners of these apartments express dissatisfaction, saying that the project implementers lack the expected level of expertise, while some voices are calling for a shift to the union method before it gets any later.

According to the redevelopment industry on the 24th, some complexes such as Yeouido Hanyang Apartment and Singil Woosung 2nd and Uchang Apartments, which chose the trust method, are experiencing delays or conflicts with the trust companies, contrary to expectations, leading to growing public opinion among owners that the trust method should be reconsidered.

Singil Woosung 2nd and Uchang Apartments, which were selected in September 2020 with Korea Asset Trust as the project operator and are promoting redevelopment through a trust method, have been facing conflicts with some owners, causing delays in project progress. Photo by Cha Wanyong

The first to surface is Singil Woosung 2nd and Uchang Apartments. This complex seemed to be progressing smoothly, having been designated as a redevelopment zone in July 2020, selecting the project implementer (Korea Asset Trust) in September of the same year, and the construction company (Daewoo Engineering & Construction) in May 2022.

However, problems arose when a draft of the preliminary contract prepared by the project implementer and Daewoo Engineering & Construction was disclosed. It was revealed that Korea Asset Trust, the project implementer, proceeded with preliminary contracts for design plans and construction contracts without gathering owners' opinions, causing controversy. Additionally, multiple typos were found in the preliminary contract, including errors in the construction company representative's name and contract clause numbering, which lowered trust. Currently, Singil Woosung 2nd and Uchang Apartments are showing little progress in the project. A general meeting of owners to apply for the project implementation plan was held on the 16th of last month but was canceled due to lack of quorum (only 37.5% of landowners attended).

The recent view of Hanyang Apartment in Yeouido, where the construction company selection was canceled. Photo by Yongjun Cho jun21@

Yeouido Hanyang Apartment, which recently halted the construction company selection process, is also facing turmoil. This is due to the project implementer, KB Real Estate Trust, pushing the project forward recklessly.

KB Real Estate Trust's construction company selection was canceled in July amid controversy over 'favoring a specific company,' and this time, they were sanctioned by the Seoul Metropolitan Government for attempting to select a construction company before the redevelopment plan was finalized.

As a result, some owners are raising their voices, questioning whether the trust method should be reconsidered due to the project implementer's lack of expertise.

In the redevelopment industry, there is speculation that these redevelopment projects may switch from the trust method to either replacing the project implementer or adopting the union method. Until now, because no proper standard trust contract or implementation regulations had been established, owners found it difficult to terminate contracts even when problems arose with the contracted trust company. However, recently, the Ministry of Land, Infrastructure and Transport has prepared standard trust contracts and implementation regulations, opening up this possibility.

According to the announced standard trust contract and implementation regulations, even if not all residents who signed the trust contract terminate it, the trust contract can be collectively terminated if the trust company fails to be designated as the project implementer within two years after the contract or if more than three-quarters of the residents agree.

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