Gyeonggi-do to Significantly Strengthen Management of Unsettled Redevelopment and Reconstruction Associations

Gyeonggi Provincial Government

Gyeonggi Province is strengthening management of ‘redevelopment and reconstruction associations with unsettled liquidation’ that cause damage to members through embezzlement and other issues by delaying liquidation after completion of maintenance projects.

According to the current ‘Urban and Residential Environment Maintenance Act,’ redevelopment and reconstruction associations must proceed with dissolution procedures, such as convening a general meeting for dissolution, within one year from the date of official announcement after project completion. However, some associations deliberately delay the liquidation process, receiving wages and bonuses for extended periods or embezzling reserved funds left for taxes, debt collection, and repayment, causing problems.

Moreover, until the association is dissolved, it is under the management and supervision of the government and local governments, but once the liquidation process begins, the authority for management and supervision transfers to the court under civil law, creating a blind spot in management and making it difficult for the government and local governments to intervene.

There are five undissolved associations and 33 unsettled liquidation associations in the province, and as the duration of undissolved and unsettled liquidation prolongs, difficulties in management such as loss of contact with liquidators are being experienced. Dissolution is a preliminary step to liquidation, a procedure to eliminate the association leaving only a small amount of funds necessary for trials and other matters.

Earlier, the Gyeonggi Provincial Council pointed out the negligence in managing unsettled liquidation associations during the administrative audit in November last year.

Accordingly, Gyeonggi Province plans to strengthen measures such as ▲periodically identifying the status of unsettled liquidations and securing contact information of liquidators before approval of completion, submitting liquidation plans, and discovering system improvements ▲providing liquidation education and guidelines for plan preparation through visiting maintenance schools ▲identifying the status of unsettled liquidation associations and selecting targets for joint inspections with cities and provinces.

Gyeonggi Province also plans to actively cooperate with cities and counties, which, as association management authorities, have secured partial inspection and supervision authority over liquidation procedures according to the amended Urban Maintenance Act in December last year.

Jung Jong-guk, head of the Gyeonggi Province Urban Regeneration Promotion Team, said, "The financial damage caused by prolonged dissolution or liquidation has directly affected the association members," adding, "We expect that liquidation-related education through visiting maintenance schools and joint inspections by cities and provinces will serve as a foundation to resolve the issue of unsettled liquidations in associations."