Yanggu County to Exempt Performance Bonds for Small-Scale Development Projects Starting January 20

Exemption for Projects Under 50 Million Won
Reduced Administrative Burden and Faster Permit Processing Expected

Yanggu County in Gangwon Province will exempt small-scale development projects with construction costs under 50 million won from the requirement to pay performance bonds starting January 20, in an effort to reduce administrative burdens for applicants and provide faster permit services.

Aerial view of Yanggu County Office. Provided by Yanggu County

The performance bond system requires developers to deposit 20% of construction costs (either in cash or as a guarantee bond) to cover the cost of administrative enforcement, such as restoring land in the event of collapse or environmental pollution during the development process.

However, this requirement has been applied uniformly regardless of project size. If applicants paid the bond in cash, it could only be refunded after project completion. In addition, not only for the initial permit but also for minor changes or extensions, applicants had to visit the county office or an insurance company to modify or redeposit the bond, resulting in both time-consuming and financial inconveniences.

Furthermore, over the past ten years, Yanggu County has not had any cases where the performance bond was actually executed. In practice, most small-scale development projects involve building single-family homes or installing solar panels for personal use, making the likelihood of project completion high, which was also taken into consideration.

In response, Yanggu County has decided to actively interpret relevant laws, such as the National Land Planning and Utilization Act, and exempt performance bonds for development permits with construction costs under 50 million won. However, forest areas with a high risk of deforestation are excluded from this exemption. To prevent damage to neighboring areas, such as soil loss or environmental pollution from civil engineering works, the county will include administrative enforcement requirements as permit conditions and require applicants to sign a "Restoration Commitment Agreement" to secure administrative safeguards.

Kim Youngmi, Head of the Urban Transportation Division, stated, "This is a measure to reduce unnecessary administrative burdens for small-scale development applicants and to enhance practical convenience through regulatory improvement and proactive administration. We will continue to improve rational permitting practices from the perspective of residents, within the boundaries of the law."