Hanwha Records Most Defects in Multi-Family Housing Over 6 Months... GS Construction Leads 5-Year Total

Ministry of Land, Infrastructure and Transport Releases List of Construction Companies with Most Defects for Fourth Time
Defect Judgment Rate Reaches 78.9%... "Change in Residents' Awareness"

The Ministry of Land, Infrastructure and Transport recently disclosed on the 24th the list of the top 20 construction companies with the highest number and rate of defect judgments in multi-family housing (apartments, multi-unit, and row houses) over the past six months. Large construction companies such as Hyundai Construction and Daewoo Construction were also included. Since the second half of 2023, the Ministry has been publicly releasing the names of construction companies with frequent defects every six months based on the judgments of the Defect Review Dispute Mediation Committee. This is the fourth time.

The company with the highest number of defect judgments from September last year to February this year was Hanwha Co., Ltd., with 97 cases. This was followed by ▲Hyundai Construction (81 cases) ▲Daewoo Shipbuilding & Marine Engineering Construction (80 cases) ▲Hangyeong Construction (79 cases) ▲Sambu Construction (71 cases).

Hanwha Co., Ltd. had 97 defects in 1,091 households it built and supplied, resulting in a defect judgment rate of 8.9% relative to the number of households. A Hanwha representative explained, "The complex was already completed and residents had moved in several years ago, and necessary measures were taken, but the number of judgments was high because complaints were not withdrawn. It was a case directly submitted to the Defect Review Committee to change the playground material."

Based on a five-year cumulative total, ▲GS Construction (1,458 cases) ▲Gyeryong Construction (603 cases) ▲Daebang Construction (507 cases) ▲Daemyung General Construction (349 cases) ▲SM Shipping (322 cases) ranked high.

The company with the highest defect judgment rate was Samdo General Construction, with a defect judgment count reaching 800% relative to the number of households supplied. Following were ▲Seohae General Construction (650%) ▲Ion Industrial Development (333.3%) ▲Hangyeong Construction (171.7%) ▲Lime General Construction (150%). All of these are small-scale construction companies supplying fewer than 50 households per complex. Most of the companies with high cumulative defect judgment rates over the past five years were also small and medium-sized enterprises. ▲Jiwoo General Construction (2660%) ▲Samdo General Construction (1687.5%) ▲Hyesung General Construction (1300%) ▲Baegun General Construction (741.7%) ▲Jihyang General Construction (732.6%)?all top 20 companies constructed complexes with fewer than 300 households.

The number of defect review applications and recognition rates have been increasing every year. Last year, a total of 1,774 defect review applications were submitted, of which 1,399 were recognized as defects. The defect judgment rate was 78.9%, steadily rising since 2020 (49.6%). The Ministry analyzed this upward trend, stating, "The publication of a casebook summarizing multi-family housing defect cases and the increase in defect lawsuits, which have accumulated related precedents, have had a significant impact. As a result, residents have become more accurately aware of defects and have responded more actively." The main types of defects were functional failure (15.2%), peeling of finishing materials (13.8%), cracks (10.3%), condensation (10.1%), leakage (7.1%), and discoloration (6.6%).

Kim Young-ah, Director of the Housing Construction Supply Division at the Ministry, said, "Considering that defect dispute cases have significantly decreased as large construction companies have actively responded to defect repairs since the list was disclosed, the public disclosure of the list is an effective measure," and added, "We will continue to transparently disclose defect-related data to induce improvements in construction quality."