Reconstruction Association Members' '2-Year Residency Requirement' Nullified

Removal of Mandatory Residency Clause from the Amendment to the 'Urban and Residential Environment Improvement Act'
First Major Regulatory Rollback in Current Government's Real Estate Policy

[Image source=Yonhap News]

[Asia Economy Reporter Kangwook Cho] The government regulation requiring reconstruction complex association members to reside in the property for two years to receive pre-sale rights has been nullified.

According to the National Assembly on the 12th, the Land, Infrastructure and Transport Committee held a subcommittee meeting on land and transportation bills and decided to remove the provision imposing a residence obligation on reconstruction association members from the amendment to the "Urban and Residential Environment Improvement Act," which was proposed by Democratic Party lawmaker Eungcheon Jo.

This measure, which was a key part of last year's June 17th measures, had not passed the Land, Infrastructure and Transport Committee's bill review subcommittee for a year and was ultimately excluded from the bill on this day.

The bill aimed to require reconstruction association members in speculative overheated districts to reside in the complex for more than two years in order to receive apartment pre-sale rights.

Initially, this law was expected to have a significant impact on reconstruction projects in the Gangnam area. Since the old reconstruction complexes in Gangnam are dilapidated and cramped, with most homeowners living outside the area and renting out their units, imposing a two-year residence obligation on association members was effectively seen as halting reconstruction projects.

However, while the legislation was delayed, major complexes targeted by this law?such as six special planning zones in Apgujeong-dong, Gangnam-gu; Jugong complexes 5, 6, and 7 in Gaepo-dong; Sinbanpo 2nd complex in Jamwon-dong, Seocho-gu; and Sindonga in Bangbae-dong?had already established their associations and thus avoided the law's application. The bill's purpose was to regulate and prevent reconstruction in Gangnam apartments, but in reality, major Gangnam complexes avoided the regulation, raising concerns that the reconstruction market in northern Seoul might be directly affected.

Moreover, recently, the policy stance shifted toward actively supporting private development projects as long as they do not harm public interest or market stability, leading to early discussions about the possible abolition of this regulation.

Ultimately, the ruling party and government included this bill on the agenda and processed it to eliminate market uncertainty regarding the enforcement of the two-year residence obligation for reconstruction association members.

This is the first time that a major regulation from the current administration's real estate policies has been withdrawn.

Some critics point out that since the announcement of the residence obligation for association members, the pace of reconstruction projects in early complexes such as Apgujeong-dong, Seoul, has only accelerated.