Won Hee-ryong: "Institutionalize Management Fee Verification and Reporting for Houses with Fewer than 50 Households"

"No Defense Measures for Small-Scale Housing Tenants' Damage"
Small Landlords Also in Blind Spot... Concerns over 'Tax Evasion'
Government to Conduct Joint Inspections of 10 Apartment Complexes by April

The government has announced its intention to establish a service that allows residents to check and report maintenance fees even in small officetels with fewer than 50 households. The aim is to reduce tenant damages caused by the transfer of monthly rent and to eliminate the possibility of landlords exploiting maintenance fees for tax evasion.

Won Hee-ryong, Minister of Land, Infrastructure and Transport, is speaking at the "Joint Inspection Meeting on Apartment Management Corruption" held on the 7th at the small library in LH Complex 2, Hangang Hangaram Village, Gimpo, Gyeonggi Province. / Photo by Ministry of Land, Infrastructure and Transport

On the 7th, Won Hee-ryong, Minister of Land, Infrastructure and Transport, stated at the 'Joint Inspection Meeting on Apartment Maintenance Fee Corruption' held at the small library in Gimpo Hangang Hangaram Village LH2 Complex, Gyeonggi Province, "We need to create a system similar to the Jeonse Fraud Victim Support Center and make it accessible online and via an app."

Minister Won pointed out, "There are frequent damages related to maintenance fees in places with fewer than 50 households, and tenants lack means of defense, which is a concern. If problems arise in one-room units where young people live, there should be a network team to listen and resolve these issues." He emphasized the need for a kind of platform that connects experts and related agencies, rather than a fixed form like an apartment management office.

He added, "Landlords who are also small-scale seem to be in a blind spot. Charging excessive rent in one-room units, urban lifestyle housing, parking lots, etc., constitutes tax evasion under the law. Since this involves local taxes and local governments, we will thoroughly investigate this."

However, for the time being, the scope of maintenance fee disclosure will only be expanded from the current 100 households or more to apartment complexes with 50 households or more. This is because lowering the scale too much at once could cause practical issues or intimidate landlords.

The Ministry of Land, Infrastructure and Transport will conduct a joint inspection of apartment complexes with the Fair Trade Commission and local governments by next month to eradicate bid-rigging and corruption related to maintenance and service contracts. This is the second joint inspection since the announcement of the 'Improvement Plan to Eliminate Blind Spots and Promote Transparency in Maintenance Fees' in October last year.

The investigation targets 10 complexes: 2 in Seoul, 4 in Gyeonggi, and 1 each in Incheon, Ulsan, Chungbuk, and Jeonbuk. The Ministry explained that the selection was based on local government audit plans and signs of irregularities related to maintenance fees, long-term repair reserve fund execution, and contractor selection.

Companies and management entities found engaging in illegal activities during the joint inspection will be subject to corrective orders, fines, or penalties under the 'Fair Trade Act' or the 'Apartment Management Act.' The Fair Trade Act stipulates fines of up to 20% of sales for unfair joint actions, while the Apartment Management Act imposes fines of up to 5 million KRW for violations of contractor selection criteria.

Minister Won said, "Although this is not a full-scale survey, we intend to hold those responsible for revealed issues accountable and improve the system so that residents can exercise their right to know. The government will take the lead in creating a system to prevent small corruptions from becoming large ones that parasitize residents' burdens."