LH Incident Prompts Amendments to Real Estate Transaction Law... Enhanced Penalties and Inclusion of Direct Relatives in Registration Requirements

Restrictions to be Imposed on Employment and Real Estate Business Licensing by Relevant Agencies
Real Estate Registration System Likely to Include Employees, Spouses, and Direct Relatives... Ministry of Strategy and Finance to Oversee

On the 7th, at the 'Message to the People Regarding Real Estate' announcement held at the Government Seoul Office in Jongno-gu, Seoul, participants including Deputy Prime Minister for Economy Hong Nam-ki and Minister of Land, Infrastructure and Transport Byeon Chang-heum bowed their heads. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Jang Sehee] The government plans to explicitly stipulate enhanced penalties in the law for Korea Land and Housing Corporation (LH) employees if their land purchases are proven to be speculative. Additionally, through a real estate registration system, transactions by relevant employees of related ministries and agencies will be restricted, and unavoidable land transactions will be required to be reported.

On the 8th, a government official stated, "Since there is no existing legislation containing provisions for enhanced penalties, we are discussing adding some content to the market disruption section specified in the Real Estate Transaction Act."

These provisions are planned to be included in the "Real Estate Transaction and Real Estate Service Industry Act (Real Estate Transaction Act)" proposed by Jin Seongjun, a member of the Democratic Party of Korea, last November.

Enhanced penalties are expected to specifically include recovery of unjust profits, restrictions on employment in related institutions, and limitations on obtaining licenses for real estate-related businesses. The aim is to strengthen penalties to eradicate real estate speculation.

Hong Namki, Deputy Prime Minister and Minister of Economy and Finance, also said on the 7th, "As the minister responsible for the economy and comprehensive management of public institutions, I sincerely apologize to the public," adding, "If the real estate speculation by LH employees is confirmed, we will take measures without tolerance, including requesting investigations and disciplinary actions."

The real estate registration system announced by the government the previous day is expected to include not only the employees but also their spouses and direct lineal relatives, considering public officials' asset reporting requirements. Since it is necessary to grasp the assets of public officials and employees of public enterprises, the Ministry of Economy and Finance, which manages public enterprises, is likely to oversee this comprehensively.

According to the Public Officials Ethics Act, public officials of grade 4 or higher, deputy heads of city or county governments, and executives of public institutions or higher are required to report changes in assets of themselves, their spouses, and their direct lineal relatives once a year.

Professor Shim Gyo-eon of Konkuk University's Department of Real Estate said, "It is appropriate to expand the scope to include direct lineal relatives, but restricting land transactions in advance is an excessive regulation," adding, "Providing information in advance to reduce speculative expectations is also a method rather than post-regulation."