Construction Company CEO Who Cut Electricity and Removed Boiler Parts to Prevent Apartment Move-In

Ulsan District Prosecutors' Office Indicts Construction Company President and 2 Others Without Detention
Poor Construction Followed by Move-in Obstruction
Ignoring Court Rulings... Even False Retention of Title Claims

The president of a construction company, who not only carried out substandard construction of an apartment but also obstructed the move-in of prospective residents raising issues and even filed lawsuits against them, has been brought to trial.

On the 26th, Yonhap News reported that the Ulsan District Prosecutors' Office Criminal Division 5 (Chief Prosecutor Kim Yoon-jung) has indicted without detention three individuals: A, the president of a certain apartment construction company; B, a director; and C, the representative of the project company, on charges of obstruction of rights exercise. A and others lost a legal battle with the apartment buyers (prospective residents) of an apartment in Ulsan that they constructed and sold, concerning delayed move-in compensation and move-in rights. Subsequently, they are accused of obstructing the move-in by removing boiler parts and cutting electrical wires in the apartment.

This apartment was started in November 2015 and was scheduled for move-in around April to May 2018. However, controversies arose due to construction delays, substandard construction, and construction differing from the design, leading to conflicts between the prospective residents and the project company. Eventually, as the move-in was continuously postponed and issues regarding losses due to the delay arose, the prospective residents filed a civil lawsuit (confirmation of non-existence of debt) against the project company and won.

In January 2019, the prospective residents appealed on the Blue House National Petition Board, stating, "The scheduled move-in date was April 2018, but we still cannot move in, and many contract holders have sold their homes and are living a nomadic life," and "We ask for the strictness of the law to be shown so that the construction company no longer exploits the desperate feelings of the people for their own benefit and to help us live warmly in our homes as soon as possible." It was reported that due to the inability to move in, they experienced inconvenience moving between relatives' houses, one-room apartments, and goshiwons.

In October 2020, the court ruled in favor of the prospective residents, ordering the project company to pay several tens of millions of won per household as delay compensation and to effectively allow immediate move-in. However, A and others ignored the court ruling and blocked the use of boilers and electricity, making normal living impossible even if the prospective residents moved in. Prosecutors' investigation revealed that to evade the law, A and others used the construction company, not the project company that lost the civil lawsuit, to obstruct the use of boilers and electricity. They fabricated documents to make it appear that the construction company had not received 14.4 billion won in construction payments from the project company and pretended that the construction company was exercising a lien on the apartment to block the move-in. Furthermore, the construction company welded some apartment unit doors to prevent the court's real estate delivery execution and filed lawsuits for obstruction of business against a total of 326 people, including prospective residents attempting to move in and court enforcement officers enforcing the judgment, as well as claims for damages.

Through searches of the offices of the project company and construction company and tracing accounts, prosecutors uncovered that they fabricated false settlement agreements to make it appear as if there was a debt between the project company and construction company and manipulated the situation to suggest a lien existed. They also confirmed that A effectively operated both the construction company and the project company. A prosecutor stated, "Despite causing defects through substandard construction, the construction company harassed the rightful buyers by illegally obstructing their legitimate rights, filing lawsuits, and delaying proceedings," and added, "We will continue to respond strictly to crimes infringing on people's livelihoods." Prosecutors dismissed all charges against the 326 prospective residents and others who were sued by A's side as 'no charges.'