Moving in early next year... Bongcheon 4-1-2 Union "Pay 32.9 million won more"

The redevelopment association of Bongcheon 4-1-2 district in Gwanak-gu, Seoul, which is scheduled for occupancy early next year, is experiencing internal turmoil over an additional contribution fee amounting to 22.5 billion KRW. The association members argue that the scale of the additional contribution fee has been excessively calculated and are concerned about double payments. The association's executive committee explains that the project costs have increased due to specialized designs, but the conflict between the two sides does not seem likely to be resolved easily.

A bird's-eye view of Bongcheon 4-1-2 district, Gwanak-gu, Seoul. It will be reborn next year as Hillstate Gwanak Centrel. (Provided by Hyundai Engineering & Construction)

According to the maintenance industry on the 12th, the association held a delegates' meeting on the 7th and passed a motion to pay an additional contribution fee of 22.5 billion KRW to the association. This amounts to an average of 32.9 million KRW per household. However, the final scale of the additional contribution fee will be confirmed when the association is liquidated.

Some members, however, are protesting that the initial amount of the additional contribution fee was inflated. The association's executive committee explains that the additional contribution fee is the amount after deducting 9 billion KRW in revenue expected from the disposal of reserved land and commercial properties from the additional costs of 31.5 billion KRW, which include 14 billion KRW in construction cost increases payable to the contractor Hyundai Engineering & Construction, 6 billion KRW in corporate tax, and 3 billion KRW in contingency funds.

One member said, "90 billion KRW has been allocated just for corporate tax and contingency funds, but it is uncertain whether the corporate tax will even be incurred, and I cannot understand why an association that is about to finish the project is setting aside 3 billion KRW as contingency funds." He added, "This is not about reducing the burden on members but about hoarding money." The association responded, "It will be more difficult to collect money after occupancy," and explained that "the contingency funds are for preparing for lawsuits and other contingencies."

In particular, members are also protesting that the association decided on the increase in construction costs without prior approval from the delegates' meeting or the general meeting. This district increased the total construction cost by 14 billion KRW by adding specialized facilities toward the end of the construction. However, the association's executive committee did not go through procedures to gather opinions, including the delegates' meeting.

The association stated, "The construction site of the specialized facilities was shared in real-time through the association's group chat," and added, "Because urgent matters at the construction site had to be handled first, (we missed the timing) and it has come to this point." However, according to the Urban and Residential Environment Maintenance Act (Dojungbeop), contracts that impose burdens on members must be approved in advance. One member protested, "This is a clear violation of the law," and said, "We are now in a situation where we have to pay additional contribution fees that we did not agree to."

Confusion is also arising within the association regarding the amount of additional contribution fees each member must pay. At the delegates' meeting on the 7th, along with the 22.5 billion KRW agenda, a management disposition amendment agenda involving an adjusted proportional rate for additional contribution fees was also processed. The association explains that the 22.5 billion KRW is the final additional contribution fee to be paid, but members are raising suspicions that they might end up paying the additional contribution fee twice.

One member said, "The distribution methods for the additional contribution fees in the two agendas are different. The additional contribution fee with the proportional rate is paid according to that rate, but the 22.5 billion KRW additional contribution fee has been adjusted with the intention of considering member equity." He added, "The scales of the contribution fees are different, and when you calculate the 22.5 billion KRW amount, which is said to have increased due to the proportional rate adjustment, it does not add up."

Meanwhile, Bongcheon 4-1-2 district is expected to be developed through redevelopment into a complex with 9 buildings ranging from 3 basement floors to 28 above-ground floors, totaling 997 households. Among them, 101 households were sold to the general public. Construction is scheduled to be completed by the end of next month, with occupancy planned for January. The complex will be named Hillstate Gwanak Centiel.