Changwon Special City, "Beware of Cooperative-type Private Rental Housing"

Notice and Banner Posting
"Members Should Decide Carefully Before Joining"

Changwon Special City in Gyeongnam recently issued a warning to citizens to be cautious about joining as members (investors, etc.) in the "private rental housing sales" promoted through promotional centers and the internet.

Changwon Special City Hall.
Photo by Lee Seryeong

The "cooperative-type private rental housing," considered a sibling of regional housing cooperatives, is a project carried out by a cooperative composed of five or more members to construct rental apartment buildings.

The "cooperative-type private rental housing" establishes a cooperative under the "Framework Act on Cooperatives" for the purpose of constructing rental apartments. Members contribute funds and, along with project financing (PF) loans, purchase the project site, build new housing, and prioritize supplying rental housing to members. After the rental period expires, the housing can be converted to sale.

The issue is that, similar to regional housing cooperatives, cooperative-type private rental housing projects may face delays or suspension if land ownership is not secured during uncertain land acquisition procedures. Members of the cooperative act as joint business entities in an investor capacity and cannot receive legal protection from administrative agencies in case of damages caused by project delays or cancellations.

Munsang-sik, Director of the Urban Policy Bureau, stated, "Our city has not yet received any reports of member recruitment approval. Recently, construction plans provided during member (investor, etc.) recruitment through housing promotional centers and the internet are not approved project plans but arbitrarily prepared documents. There is concern about potential damages due to project delays at the project approval stage, so we urge people to thoroughly verify the facts before joining."

For more detailed information, please refer to the notice posted on the Changwon City website or contact the Housing Policy Division of the Urban Policy Bureau in Changwon City for guidance.

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