Shinmokdong Paragon 'Move-in Delay' Continues... Association's Injunction Request Dismissed

The move-in delay at 'Sinmokdong Paragon' in Yangcheon-gu, Seoul (Shinwol 4 District Reconstruction) is expected to continue for the time being.

The Seoul Southern District Court Civil Agreement Division 51 (Chief Judge Kim Woo-hyun) dismissed on the 17th the injunction request filed by the Shinwol 4 District Housing Reconstruction Maintenance Association against the construction company Dongyang Construction Industry to prohibit obstruction of work. The court did not accept the association's claim, stating there was no legal basis to prevent the construction company's exercise of a lien.

The association and the construction company are in conflict over the additional burden of construction costs, which have risen more than expected due to high inflation. The construction company requested an increase of about 10 billion KRW in construction costs from the association in early last month, citing rising raw material prices, but when refused, they exercised a lien to block the move-in.

According to the plan, move-in was supposed to start on the 1st of this month, but the construction company blocked the apartment entrance with containers and vehicles, preventing any household from entering.

The association filed an injunction request on the 24th of last month, five days before the scheduled move-in date, asking the court to prevent the construction company from obstructing the move-in. On the other hand, the construction company argued that the association was pushing for move-in without proper negotiation on the construction cost sharing.

According to the court decision, the contract between the association and the construction company states that "from July 2018 onward, if the consumer price index announced by the Ministry of Strategy and Finance rises by more than 3%, the unit price of construction costs will be adjusted through mutual consultation."

Since then, the consumer price index rose more than 3% around October 2021 compared to August 2018, and continued to rise, exceeding 9% in December last year.

The construction company repeatedly requested an increase in construction costs from the association starting December 2021 due to rising prices, but the two sides failed to reach an agreement.

The court pointed out, "Although the association received multiple requests for negotiation on construction cost unit price adjustments from the construction company from December 2021 to last month, it held only one related meeting and did not properly respond to the negotiation requests."

It added, "While there is a difference of opinion between the two sides regarding the additional construction costs due to inflation, considering the changes in the consumer price index, it can be seen that a considerable amount of additional construction costs have occurred."