Possibility of Contract Termination Due to Unpaid Balance Despite Preliminary Subscription
Developer Inchang Development Owes 300 Billion KRW
Preliminary Subscription Winners to Retain Status, But Move-in Schedule Remains Uncertain
Korea Land and Housing Corporation (LH) is considering terminating the land contract with Inchang Development, the developer of the mixed-use complex in Unjeong New Town, Paju, Gyeonggi Province. This area has already undergone a preliminary subscription, and if the contract is terminated, delays in occupancy and other damages are expected.
According to LH on the 6th, Inchang Development, the developer promoting the projects in blocks 1, 2, 5, and 6 of Unjeong New Town, has not paid the intermediate payments for several years after paying the deposit. Currently, about 300 billion KRW out of the total purchase price of 752.2 billion KRW remains unpaid.
LH is reportedly reviewing contract termination based on regulations that allow termination if the developer delays payment for more than six months or if the overdue interest exceeds the deposit. It is known that these criteria were met last month.
An LH official stated, "There are administrative procedures, so we cannot say the contract will be terminated immediately, but it is true that we are reviewing termination." However, since the preliminary subscription has already been conducted, it is expected that even if the contract is terminated, the status of the preliminary subscription winners will be maintained. The LH official explained, "Preliminary subscription winners will retain their winning status, including succession conditions."
At the time of the preliminary subscription, a total of 1,314 households were planned to be supplied in this area: 392 households in block 1, 250 households in block 2, 332 households in block 5, and 340 households in block 6. As concerns about occupancy delays due to the land contract termination grow, damages to consumers are expected.
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