GS Construction Demands Additional Contribution Reflecting Increased Amount
Pulls 'No Key Handover' Card
Move-in Scheduled for Next Month 30th,
But Residents May Not Be Able to Move In
"Move-in Should Proceed Regardless of Construction Cost Negotiations"
Construction Cost Negotiations at an Impasse
Position Differences Confirmed at First Litigation Hearing
Residents of ‘Bukseoul Xi Polaris (Mia 3 District)’ in Gangbuk-gu, Seoul, are facing a situation where they may not be able to move in a month before the scheduled move-in date due to a construction cost dispute with the contractor, GS Engineering & Construction. GS Engineering & Construction has notified residents to pay additional fees, but negotiations between GS Engineering & Construction and the residents’ association remain at an impasse, heightening residents’ anxiety.
According to the maintenance industry on the 25th, GS Engineering & Construction sent a statement of additional fees reflecting the increased construction costs to the residents last month. Without an agreement on the construction costs, GS Engineering & Construction arbitrarily allocated part of the requested 32.3 billion KRW increase among the residents based on their numbers. Although the amounts vary per resident, it is reported to range from a minimum of 6 million KRW to 160 million KRW.
When notifying the additional fees, GS Engineering & Construction clearly stated that “payment of the revised fees is required to move in.” This implies that keys to the front doors will not be handed over unless the additional fees are paid. With no progress in the construction cost negotiations, GS Engineering & Construction is applying pressure by using the “no key handover” card.
Among the residents, concerns are growing that they might not be able to move in on time. The association has been flooded with inquiries. A representative of the association said, “GS Engineering & Construction sent the notice (statement) with the intention of collecting construction fees,” adding, “Since the construction costs have not been finalized, the fees have not been determined. We are explaining to residents not to pay the additional fees requested by GS Engineering & Construction and to wait.”
The association is demanding that construction cost negotiations and move-in proceed separately. The association representative said, “We are insisting that residents move in first and continue negotiations afterward. Negotiations might not conclude within a month, but move-in should not be blocked.” However, GS Engineering & Construction maintains the position that “it will be difficult to allow move-in without payment of the revised fees.”
If there is no progress in the construction cost increase negotiations within a month, the reality of residents being unable to move in may materialize. The designated move-in period is until October 31, and if fees are not paid within this period, residents will also have to pay late interest, leading to additional financial damage. The association representative said, “At this point, it is not determined whether move-in will be possible. We will only know on the first day of move-in,” adding, “We are requesting support from local governments and others to prevent such (move-in delays) from happening.”
The association and GS Engineering & Construction have not been able to narrow their differences regarding the construction cost increase. The association maintains that there will be no further increases, creating a significant gap. The association representative said, “So far, we have agreed to all requested construction cost increases,” adding, “Even at the last increase, the contract stated that no further reflection of inflation would be made.” At the first hearing of the lawsuit on the 17th, only the differences in positions were confirmed.
Meanwhile, Bukseoul Xi Polaris consists of a total of 1,045 households, with about 327 units available for general sale including special supply. From the 27th, a three-day pre-move-in inspection will be conducted. The association has announced plans for a rally.
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