Mia 3 District in Gangbuk-gu and Anam 2 District in Seongbuk-gu, Seoul, resolved conflicts over construction cost increases and move-in delays through mediation by the Seoul Metropolitan Government.
According to Seoul City on the 27th, the redevelopment association of Mia 3 District in Gangbuk-gu and the contractor reached a final agreement on the 13th to increase the construction cost by 11 billion KRW.
This district had a lawsuit filed by the contractor demanding a total increase of 32.6 billion KRW due to inflation (25.6 billion KRW), ready-mix concrete supply disruptions, the Cargo Solidarity general strike, and design changes (7 billion KRW). The association requested the dispatch of a Seoul City coordinator after being notified of additional charges to members and that move-in would be prohibited if payments were not made.
Subsequently, the coordinator reviewed the supporting documents submitted by both the association and the contractor and proposed a mediation plan. A consensus was reached through the 4th mediation meeting attended by the coordinator, city and district officials, the association, and the contractor.
The association decided to reduce the burden on members by constructing public dormitories on the remaining religious land parcel (1,018㎡) within the district and selling it to the Seoul Housing and Communities Corporation (SH Corporation), using the proceeds to cover the increased construction costs. A Seoul City official stated, "We plan to smoothly proceed with the project completion, move-in of association members and general buyers by the end of this month," adding, "The resolution will be voted on at the general meeting early next month."
The redevelopment association and contractor of Anam 2 District in Seongbuk-gu, who had conflicts over additional charges, also reached an agreement through Seoul City’s mediation.
In this district, although a contract to change construction costs was signed with the contractor in November last year, internal conflicts within the association over additional charges led to non-payment of construction fees. As a result, the contractor exercised a lien on the units allocated to association members starting early this month, causing move-in delays and intensifying conflicts, with some members having to find temporary housing.
Afterwards, the Seoul City coordinator listened to the parties’ opinions and, through mediation meetings, agreed to adjust the payment schedule for the unpaid construction fees and contractor loans. Based on the agreement, the association approved the amendment to the management disposition plan at a general meeting on the 22nd, and member move-ins resumed the following day.
Additionally, the Cheongdam Samik Apartment reconstruction project in Gangnam-gu faced a crisis of delayed general sales as the contractor announced a halt in construction, but conflicts were resolved through the dispatch of a coordinator, and general sales are now imminent.
The city dispatches coordinators composed of experts in urban administration, urban maintenance, law, taxation, and accounting to redevelopment sites experiencing conflicts to mediate disputes. So far, coordinators have been dispatched to seven locations: Daejo 1 District, Banghwa 6 District, Cheongdam Samik Apartment, Mia 3 District, Anam 2 District, Jangwi 4 District, and Yeokchon 1 District.
Construction costs under the contract between the association and the contractor account for more than 70% of the redevelopment project expenses. Since construction cost increases significantly affect new housing prices, Seoul City plans to continuously monitor to prevent excessive burdens from being passed on to association members. To this end, the city supports expert pre-consultations before construction cost contracts, operates a construction cost conflict task force (TF), and collaborates with SH Corporation and the Korea Real Estate Board to verify redevelopment project construction costs.
Han Byung-yong, Director of the Seoul City Housing Office, said, "Since various conflicts such as construction costs and internal association issues cause delays in redevelopment projects, Seoul City will continue to actively manage conflicts to resolve problems and strive to supply housing promptly."
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