From Today, Landlords and Brokers Collusion Subject to Punishment
Response Team Launches with Announcement of Intensive Investigation from Day One
Major Complexes in the Seoul Metropolitan Area Targeted...Attention on First Punishment Case
[Asia Economy Reporter Moon Jiwon] On the 21st, the Ministry of Land, Infrastructure and Transport (MOLIT) launched the 'Real Estate Market Illegal Activities Response Team' (hereafter Response Team) and simultaneously began investigations into allegations of 'price-fixing' in over 10 complexes nationwide. As the government has announced a stringent investigation into illegal real estate activities, there is growing interest in which complex will become the first case to be penalized for 'price-fixing.'
Park Sun-ho, the first vice minister of MOLIT, appeared on a broadcast that day and said, "The Response Team is launching today and will begin full-scale investigations into price-fixing. We have already received reports on more than 10 complexes and will start preliminary investigations from today, with on-site inspections for evidence collection scheduled for next week."
Previously, MOLIT announced plans to prioritize investigations into price-fixing activities, which are included as punishable offenses for the first time. According to the amended Real Estate Brokerage Act, from this day forward, price-fixing activities by residents and real estate agents are completely prohibited. Acts such as resident associations distributing notices or using online communities to encourage or induce brokers not to mediate below a certain price, or recommending not to use specific brokerage offices, are all banned.
Brokers are also prohibited from ignoring the transaction price desired by clients, colluding to adjust prices through 'real estate social gatherings,' or posting false or bait listings at low prices. If such acts are detected, offenders may face imprisonment of up to three years or fines up to 30 million KRW.
According to MOLIT, the Response Team conducts investigations by first receiving reports through the Real Estate Transaction Order Disruption Reporting Center under the Korea Appraisal Board and the Korea Association of Realtors. If suspicion is deemed valid, a preliminary investigation begins. Depending on the situation, on-site investigations and witness interviews will follow, and if criminal charges are confirmed, the case will be referred to the prosecution for punishment.
As Park, who leads the newly launched Response Team, emphasized his determination to strictly respond to price-fixing, it is interpreted as a strong commitment to enforcement. Park did not disclose the specific locations or names of the complexes under preliminary investigation. Industry insiders analyze that areas such as Gangnam-gu and Yangcheon-gu Mokdong in Seoul, where collusion has been severe, could be primary targets. These areas have long experienced conflicts due to collusion between residents and brokers.
In particular, in Mokdong, recently, many homeowners hung banners protesting the 'broker cartel's' artificial price adjustments, causing controversy. Nearby brokerage offices claimed they suffered damages as transactions stopped due to homeowners' price-fixing activities, but until now, there were no penalty provisions, so proper investigations were not conducted.
There are also observations that some major complexes in newly designated regulated areas such as Yeongtong, Jangan, and Gwonsun districts in Suwon, Manan district in Anyang, and Uiwang city are within the scope of investigation.
A MOLIT Response Team official explained, "The more than 10 complexes under preliminary investigation are mainly near the Seoul metropolitan area," adding, "Investigations will proceed according to the special judicial police procedures but may be flexible depending on circumstances." The Response Team is currently in the process of dispatching staff, and the organizational formation is expected to normalize by the end of this month or early to mid-next month.
Meanwhile, the Response Team consists of team leader Kim Young-han, Director of Land Policy, and a total of 13 staff members. The staff includes seven special judicial police officers from MOLIT, and one each dispatched from the prosecution, police, National Tax Service, Financial Services Commission, Financial Supervisory Service, and Korea Appraisal Board. Since the team investigates all illegal real estate-related activities, it is interpreted that experts from various fields have been assigned.
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