Daesung Berhill Misexplains "Loans Available" and Claims "Deposit Non-Refundable"

Loan Criteria for Yangju Changed by 6·17 Measures
Developers Tell Pre-Contract Winners "Loans Approved"
1-Homeowners Who Trusted This Face Risk of Losing Deposits

Perspective View of Yangju Okjeong New Town Daesung Berhill

[Asia Economy Reporter Moon Jiwon] "The developer told us that even single-homeowners could receive interim payment loans for pre-sale rights without disposing of their existing homes, so I signed the contract. But now they say the loan is not available. The developer is blaming the bank and the government, and telling us to cancel the contract after paying the 42 million won deposit, which is very unfair." (Pre-sale rights contract holder A at Yangju Okjeong New Town Daeseong Berhill)

DS General Construction, an affiliate of mid-sized construction company Daeseong Construction, recently launched 'Yangju Okjeong New Town Daeseong Berhill,' which has become embroiled in controversy. Some pre-sale rights holders claim that despite changes in interim payment loan criteria due to the June 17 real estate measures, the developer misled them by saying "loans will be approved," putting them at risk of losing tens of millions of won in deposits.

According to industry sources on the 5th, 'Yangju Okjeong New Town Daeseong Berhill' held first and second priority subscription applications on the 2nd and 3rd of last month, announcing winners on the 10th. At that time, Yangju was a non-regulated area, so winners could receive interim payment loans up to 60%.

However, on the 17th of last month, the government newly designated Yangju and other areas as regulated zones, making multi-homeowners ineligible for interim payment loans. Single-homeowners can receive interim payment loans only if they dispose of their existing homes.

Some pre-sale rights winners claim that despite this, the developer told them on the 22nd of last month, just before the formal contract signing, that "regardless of the number of homes owned, interim payment loans can be obtained as before," inducing them to sign contracts.

A, a single-homeowner pre-sale rights contract holder, told Asia Economy in a phone interview, "After Yangju was designated a regulated area, I repeatedly inquired with DS General Construction, but they consistently replied that interim payment loans could be obtained regardless of the number of homes owned, based on pre-regulation criteria."

A trusted the developer’s word and signed the contract on the 22nd of last month. The next day, through a press release from the Financial Services Commission, he realized that single-homeowners must dispose of their existing homes to receive interim payment loans.

Unable to sell his existing home due to personal circumstances, he faces a situation where if he cannot secure over 200 million won in interim payment loans without borrowing, he will lose both the pre-sale rights and the deposit. It is known that about 10 victims like A exist in this complex alone.

DS General Construction partially acknowledges that there was incorrect explanation before the contract but insists they only conveyed the information received from KB Kookmin Bank and claim no fault.

In a response to complaints filed by victims to Yangju City Hall on the 1st, DS General Construction stated, "After the real estate measures, we received a reply from KB Kookmin Bank's Q&A that group loans (relocation and interim payment loans) would apply the previous criteria announced before the implementation date of the resident recruitment notice."

In other words, since 'Yangju Okjeong New Town Daeseong Berhill' was announced before the regulation announcement, KB Kookmin Bank confirmed it was not subject to regulation, and this was explained to the winners as is.

They further claimed, "On the afternoon of June 23, the Financial Services Commission additionally announced loan restrictions based on the number of homes owned, changing the condition so that single-homeowners can receive loans only if they dispose of existing homes." They added, "This complaint is damage caused by government announcements, so the Financial Supervisory Service should handle the restoration of subscription accounts and compensation for single-homeowners."

However, KB Kookmin Bank denied these claims by Daeseong Berhill as "groundless." A bank official said, "Upon verification, the group loan team never gave such explanations." Regarding the possibility of incorrect explanations at branch offices, they said, "It is difficult to confirm."

Also, while DS General Construction said the government announced additional measures on the 23rd of last month changing the criteria, the Financial Services Commission previously explained that "the criteria for group loans such as interim payment loans following new designation of regulated areas have been consistently applied."

DS General Construction has decided to refund the deposits already paid to multi-homeowners who signed contracts based on incorrect explanations. However, they notified that deposits will not be refunded to single-homeowners who can receive interim payment loans if they dispose of existing homes.

Single-homeowner winners said, "If we had known in advance that loans could only be obtained by disposing of existing homes, we would not have signed the contract," and "Those who signed contracts without disposing of their single home should receive a full refund of the first deposit."

In particular, DS General Construction reportedly proposed a 'trick' to single-homeowner contract holders amid the controversy: receive interim payment loans on the condition of disposing of existing homes, then repay all loans with jeonse deposits and cash at move-in, thereby nullifying the home disposal pledge.

However, according to the banking industry, such actions are clearly illegal, and even if the loan is fully repaid, the pledge remains valid, requiring the sale of the existing home.

A Daeseong Construction official said, "If such a method was explained, it was probably induced by the contract holders," but added, "We asked the bank what the penalty would be if the existing home was not disposed of after saying it would be, and were told that repaying the loan is sufficient."