Seoul City Investigates Redevelopment and Reconstruction Associations Not Dissolved After Completion

[Asia Economy Reporter Onyu Lim] The Seoul Metropolitan Government announced on the 9th that it will conduct a comprehensive investigation starting from the 15th of this month into redevelopment and reconstruction associations that have not been dissolved even after more than one year since completion.

The city plans to request investigations or take administrative actions if any illegal activities are detected during on-site inspections.

This comprehensive investigation is based on the 'Seoul Metropolitan City Urban and Residential Environment Maintenance Ordinance' revised in September 2019.

Currently, there are a total of 63 associations in Seoul that have not been dissolved more than one year after receiving completion approval, of which 16 have not been dissolved for over 10 years. There are 20 associations that have not been dissolved due to ongoing lawsuits.

Associations formed for redevelopment and reconstruction projects are, in principle, required to dissolve once the project is completed and to liquidate any remaining funds to return to the members. However, some associations have not dissolved even though the apartments have been fully constructed and residents have moved in. According to the Seoul Metropolitan Government, this causes financial harm to members due to additional contributions or litigation costs.

There have been cases where association heads have privately misappropriated remaining operational funds or deliberately delayed dissolution for years by filing unnecessary lawsuits to maintain their position.

Although the current Urban and Residential Environment Maintenance Act stipulates procedures for association dissolution and liquidation, there is no regulation specifying by when the association must be dissolved after construction completion. As a result, there have been conflicts between the executive body and association members due to the lack of legal grounds to sanction associations that do not dissolve for unclear reasons.