Gyeonggi Province Catches 160 Real Estate Development Companies Violating Registration Requirements

[Suwon Ilbo=Reporter Park No-hoon] Gyeonggi Province has caught 160 real estate development companies that either failed to secure the minimum requirement of two specialized personnel or failed to report changes in registration information.

Gyeonggi Province announced on the 29th that it conducted investigations into illegal activities among 503 registered real estate development businesses in the province from August 5 to October 23 to prevent consumer damage from illegal practices such as fraudulent pre-sales and false advertising, identifying 160 violators including those failing to meet registration requirements and those failing to report changes in registered matters.

In this actual condition survey, the province focused on investigating compliance with requirements among registered real estate development businesses, including promotion of compliance matters and whether they met real estate development business registration requirements and filed change notifications when changes in registered matters occurred.

As a result of the investigation, the province will proceed with registration cancellation for 21 companies suspected of failing to secure two or more specialized personnel, and will impose administrative fines totaling 61 million won on 139 companies that failed to report changes in their registration information.

Compared to detecting 210 companies violating the Real Estate Development Business Act last year, the number of violators detected this year has decreased, and the province stated that this is a result of continuous guidance for administrative measures and prevention of recurrence regarding illegal activities by registered real estate development businesses.

The real estate development business registration system, introduced in 2007, is designed to foster and manage legitimate development companies by requiring registration when developing and supplying real estate of a certain scale (building floor area of 3,000 square meters or 5,000 square meters annually / land area of 5,000 square meters or 10,000 square meters annually) or larger, thereby preventing consumer damage from companies supplying real estate through methods such as pre-sales and leasing.

Unregistered companies engaging in real estate development business activities or registered real estate development companies supplying real estate through pre-sales or leasing with violations in display and advertising or false or exaggerated advertising are subject to imprisonment of up to three years or fines of up to 50 million won.

Registered real estate development businesses must have two or more specialized personnel on staff, capital of 300 million won or more (600 million won for individuals), and an office, and those failing to meet registration requirements are subject to registration cancellation.

When registered companies experience changes in registration requirements or registered matters (representative, executives, location, etc.), they must report the changes to the province through the real estate development association within 30 days from the date of change. Violations result in administrative measures such as administrative fines of up to 8 million won or business suspension.

Hong Ji-seon, Director of Urban Housing at Gyeonggi Province, said, "Following the policy direction of a 'fair world,' we plan to continuously investigate whether registered real estate development businesses comply with regulations to prevent damage to residents," and added, "We will actively guide and promote compliance requirements for registered businesses in cooperation with related organizations such as the real estate development association to prevent administrative action cases resulting from unfamiliarity with regulations."