'Real Estate Response Team' Launches Tomorrow... Expanding High-Intensity Actual Transaction Investigations

Launch Ceremony Tomorrow to Begin Full-Scale Investigation
Land Policy Officer as Response Team Leader, 13 Staff Members Formed
Agreement with Seoul and Gyeonggi to Eradicate Illegal Activities
Expansion of High-Intensity Investigation on Real Estate Transactions
Plans to Investigate Price Collusion and Illegal YouTube Activities

Minister of Land, Infrastructure and Transport Kim Hyun-mi / Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Moon Jiwon] The 'Real Estate Market Illegal Activities Response Team' (hereinafter referred to as the Response Team), which focuses on investigating various illegal activities in the real estate market, will be launched on the 21st. The Response Team plans to investigate high-priced housing transactions nationwide and major criminal activities, as well as look into price-fixing and illegal brokerage activities on YouTube and social networking services (SNS).

The Ministry of Land, Infrastructure and Transport (MOLIT) announced on the 20th, "On the 21st, the Response Team under the direct supervision of the First Vice Minister of MOLIT will hold its launching ceremony and begin full-scale investigation and enforcement activities."

The Response Team will be led by the Director of the Land Policy Bureau and consist of a total of 13 staff members. The staff includes 7 special judicial police officers from MOLIT and 6 dispatched personnel from related agencies such as the prosecution, police, National Tax Service, Financial Services Commission, Financial Supervisory Service, and Korea Appraisal Board. The dispatch procedures are currently underway.

The Response Team will oversee investigations of real transaction data and funding plans and directly investigate criminal activities in the real estate market. It will also collect and analyze information on illegal activities related to real estate.

MOLIT plans to establish a cooperative system with about 200 special judicial police officers deployed in Seoul and Gyeonggi Province. To this end, at the launching ceremony on the 21st, MOLIT will sign a memorandum of understanding (MOU) with the Seoul Civil Judicial Police Unit and the Gyeonggi Fair Special Judicial Police Unit to eradicate illegal real estate activities.

◆Expansion of High-Intensity Investigation Areas for Real Estate Actual Transactions= According to MOLIT, from the 21st, the submission requirement for funding plans will be expanded from houses priced over 300 million KRW in existing speculative overheated districts to houses priced over 300 million KRW in speculative overheated districts and adjusted areas, and houses priced over 600 million KRW in non-regulated areas.

Also, the 'high-intensity investigation target' areas for funding plans, currently conducted in 25 districts of Seoul, will be expanded to the entire speculative overheated districts from the 21st. Additional areas include Gwacheon and Bundang in Seongnam, Gwangmyeong, Hanam in Gyeonggi Province, Suseong-gu in Daegu, and Sejong.

For houses priced over 900 million KRW in speculative overheated districts, from next month, submission of supporting documents such as income verification and balance certificates will be mandatory, and investigations will begin immediately upon reporting to check for illegal activities throughout the transaction process.

The Response Team plans to start investigations into suspicious transactions together with local governments as soon as funding plans are submitted in the relevant areas.

To increase the likelihood of detecting illegal activities, the criteria for extracting suspicious transactions will be refined through detailed analysis of transaction prices, patterns, and methods.

As a principle, the Response Team will take charge of investigating all high-priced housing transactions nationwide priced over 900 million KRW. It is also expected to conduct planned investigations on newly regulated areas, rapidly rising price complexes, and complexes suspected of illegal activities.

Currently, actual transaction investigations take more than two months, but through intensive investigations by the Response Team and the Korea Appraisal Board’s permanent real transaction investigation team, the period will be shortened to about one month.

(Photo by Yonhap News)

◆Response Team to Focus on Monitoring Price-Fixing and Illegal Activities on YouTube= The Response Team announced plans to also monitor recent issues such as price-fixing and illegal brokerage activities on SNS and YouTube.

First, if related illegal activities are confirmed through reports to the Real Estate Transaction Order Disruption Report Center and monitoring, investigations will begin immediately, and on-site inspections for additional evidence collection will be conducted.

In addition, chronic illegal activities such as illegal resale and fraudulent subscription in the sales market, as well as planned real estate fraud, which have been ongoing problems, will be intensively cracked down on in cooperation with related agencies.

Kim Younghan, Director of the Land Policy Bureau and head of the Response Team, emphasized, "Starting from the 21st, more effective market enforcement to create a sound real estate market will be possible," adding, "We plan to vigorously carry out comprehensive enforcement activities to eradicate illegal real estate activities."

Real estate sale and lease prices are posted at a cluster of real estate agencies in Songpa-gu, Seoul./Photo by Jin-Hyung Kang aymsdream@

◆Transaction Reporting Deadline Shortened to 30 Days... Collusion Between Residents and Brokers Prohibited= The amendments to the 'Real Estate Transaction Reporting Act' and the 'Licensed Real Estate Agent Act,' promulgated in August last year, will be fully enforced from the 21st.

The main point of the amendment to the Real Estate Transaction Reporting Act is that the reporting deadline after concluding a real estate transaction contract will be shortened from the existing 60 days to 30 days.

The purpose is to reduce the gap between the actual transaction date and the reporting date to provide more accurate market price information to consumers and to minimize fraudulent activities during real estate transactions.

If the report is not submitted within the deadline, a fine of up to 5 million KRW will be imposed. Even if the contract is canceled, invalidated, or rescinded after reporting, it must be reported within 30 days.

False contract reporting, which seriously disrupts real estate transaction order, is also prohibited, and a fine of up to 30 million KRW will be imposed for false contract reports.

The main content of the amendment to the Licensed Real Estate Agent Act is that collusion between residents and licensed real estate agents to fix housing prices is prohibited.

Acts that affect market prices or restrict or induce brokerage requests to specific agents are prohibited, and violations will be punished by imprisonment of up to three years or fines of up to 30 million KRW.

To effectively detect collusion and similar acts, a reporting center will be established at the Korea Appraisal Board from the 21st.

MOLIT explained, "We have been conducting guidance activities even before the law’s enforcement to prevent punishment for price-fixing," and added, "After enforcement, we will eradicate price-fixing through strong enforcement activities such as on-site inspections and special judicial police investigations."