Cheonan City Issues Warning on Cooperative Private Rental Housing and Housing Cooperative Scams

Lack of Protection Measures for Business Entities as Founders and Cooperative Member Investors

Cheonan City in Chungnam has issued a warning to be cautious of potential 'membership damage' related to the recruitment of members for cooperative-type private rental housing and regional housing cooperatives.

According to the city on the 18th, cooperative-type private rental housing is a project in which five or more promoters establish a cooperative to construct 30 or more rental housing units, supply them first to members, and grant the right to purchase the housing after a 10-year rental period.

However, when joining a cooperative-type private rental housing project, members including the promoters are considered business entities in the sense of investors, so there are insufficient protective measures, and the process of securing land ownership can be prolonged, potentially resulting in damages due to project delays.

In particular, during the stage of recruiting promoters and members, the business plan being promoted has not yet been finalized, as the cooperative establishment and membership recruitment have not been officially reported, so it should be noted that the details may change.

Even if a 'member recruitment report' has been filed, if land acquisition does not proceed smoothly, there is a high possibility that the project may be delayed or canceled.

Additionally, in the case of regional housing cooperatives, if the housing construction project is prolonged due to issues such as securing land ownership or recruiting more than 50% of the required number of members, additional contributions may be required.