Identifying Unsound Real Estate Developers... Seoul City to Conduct Survey by End of October

Administrative Sanctions Planned for Companies Failing Registration Requirements

Seoul City will conduct a fact-finding survey on real estate development companies to prevent illegal activities such as false advertising or fraudulent sales by companies that are not qualified to develop offices, officetels, or commercial buildings.

On the 6th, Seoul City announced that it will begin a fact-finding survey targeting 987 registered real estate development companies by the end of next month.

Real estate development business refers to the industry that carries out real estate development for the purpose of selling or leasing to the general public. The registration system was introduced in 2007 to prevent consumer damage caused by the proliferation of real estate development companies.

To conduct a real estate development project with a total building floor area of 3,000㎡ (land area of 5,000㎡) or more, registration with the city or province is required. The registration requirements include a capital of at least 300 million KRW, securing an office, and having at least two full-time professionals.

The city will verify whether all registered real estate development companies meet the registration requirements (capital, facilities, professional personnel) through document review and on-site inspections.

This year, for the first time nationwide, an electronic document wallet system will be introduced and utilized in the survey. When the company’s professionals submit a health insurance qualification certificate via a mobile app, Seoul City will collectively review it to confirm the employment status of full-time professionals.

Based on the materials submitted by the companies, a document review will be conducted first, followed by on-site inspections of real estate development companies suspected of non-submission or violations. If any companies are found to be non-compliant with registration requirements through the survey, administrative actions such as cancellation of registration will be taken.

Jo Nam-jun, head of Seoul City’s Urban Space Headquarters, said, “Since real estate development companies that do not meet registration requirements may cause significant harm to citizens through fraudulent sales and false advertising, we will take the lead in protecting citizens’ property rights by preemptively blocking illegal activities through this fact-finding survey and managing the industry transparently and systematically.”