Citizens Urged to Fully Understand
"Business Procedures and Related Details"
Jeonju City in North Jeolla Province has urged citizens to exercise caution and make careful decisions before joining local housing cooperatives to avoid potential losses.
According to the city on May 30, there has been a recent surge in reports concerning banners and false or exaggerated advertisements related to the recruitment of members for local housing cooperatives. In addition, there has been an increase in inquiries regarding the procedures, contracts, and withdrawal processes of these cooperatives.
In response, the city has taken swift administrative action against any illegal activities by local housing cooperatives. At the same time, it has launched a campaign to inform citizens about the housing construction projects promoted by these cooperatives to prevent any harm or inconvenience to residents.
The local housing cooperative housing construction project allows people who either do not own a home or own only one home with an exclusive area of 85 square meters or less and reside in North Jeolla Province to form a cooperative under the Housing Act. The cooperative itself then becomes the project operator, securing land in a specific area and constructing housing.
While this system offers the advantage of securing housing at a lower cost compared to general apartment sales, there are also risks. These include potential delays or failures of the project due to setbacks in securing land, so caution is advised.
To recruit members for a local housing cooperative, the cooperative must first secure land use rights for more than 50% of the housing construction site and then report the recruitment to the relevant administrative authority. Public recruitment must be conducted in accordance with the reported details.
At the cooperative establishment approval stage, the cooperative must have recruited members for more than 50% of the planned number of housing units, secured land use rights for more than 80% of the construction site, and obtained ownership of more than 15% of the land before applying for approval to establish the cooperative.
After the cooperative establishment is approved, the cooperative must secure ownership of more than 95% of the housing construction site before applying for project plan approval. During this process, the project undergoes reviews by the Architectural Committee, Urban Planning Committee, and Traffic Impact Assessment Committee. The original project scale, number of units, and unit sizes may change during these reviews. Once all these steps are completed, the local housing cooperative can begin construction, and after a final inspection, members can move into their homes.
The city has repeatedly urged citizens considering joining a local housing cooperative to check the following: member qualifications, the status of land acquisition, the content of recruitment advertisements, member contributions, the timing of contractor selection, the contract, and the process for withdrawing an application.
Specifically, member qualifications must be maintained from the time of joining the cooperative until moving in. If a member loses eligibility and is expelled or withdraws, it may be difficult or impossible to receive an immediate or full refund of the membership fee, resulting in financial loss. Additionally, if land acquisition is delayed at any stage of the project, the project itself may be delayed, leading to increased financial costs.
The business plans promoted during member recruitment are only preliminary plans. The final scale of the cooperative's project is determined after the cooperative establishment is approved and after undergoing various reviews and project plan approval procedures.
Furthermore, regarding member contributions, additional payments may arise during the project due to land purchases, design changes, or construction. The selection of a contractor is also decided through a general meeting only after the cooperative establishment is approved.
In addition, when signing a contract, members should request a thorough explanation and complete a contract explanation confirmation form to review the basic terms of the cooperative. For application withdrawal, members may withdraw their application within 30 days from the date of deposit and receive a full refund of all amounts paid.
A city official stated, "To prevent unnecessary financial losses caused by a lack of understanding of the procedures and details related to local housing cooperative projects, citizens should fully understand the business procedures and approach joining a local housing cooperative with caution."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
