Gyeonggi Province Uncovers 748 Cases of Mismanagement at 95 Apartment Complexes

[Suwon Ilbo=Park No-hun] The Gyeonggi Province audit has identified management entities and residents' representative councils of apartment complexes that improperly managed common housing by misusing resident representative council operating funds and caused financial losses to residents.

Gyeonggi Province announced on the 28th that following audits of 95 mandatory management apartment complexes in the province (complexes with 300 or more units, or 150 or more units with elevators or centralized heating systems, etc.), it detected a total of 748 cases of mismanagement, and processed them as follows: 6 cases referred for prosecution and investigation, 204 cases of administrative fines, 118 cases of correction orders, and 420 cases of administrative guidance.

Of the 95 complexes, civil complaint audits were conducted at 5 complexes upon residents' audit requests, and planned audits at 90 complexes. In the first half of the year, audits focused on the appropriateness of selection of common housing management companies and outsourced business operators for recently built apartments (2017-2018), with Gyeonggi Province auditing 15 complexes and local governments auditing 75 complexes. In the second half, audits focused on compliance with disclosure requirements under the Common Housing Management Law and the appropriateness of resident representative council operating expense execution at self-managed apartments not entrusted to housing management companies.

Major violations detected included improper selection and contracting of housing management companies and outsourced operators, and improper execution of resident representative council operating expenses.

The management entity of Apartment Complex B in City A failed to disclose contracts as required by the Common Housing Management Law when entering into construction or service contracts.

The residents' representative council of Apartment Complex D in City C used meal expenses on days when no meetings were held, and the management entity failed to attach details of resident representative council operating expenses to management fee invoices.

The management entity of Apartment Complex F in City E approved bids from ineligible companies as valid bids during a defect repair project bidding process and awarded and contracted with the successful bidder.

Apartment complexes that violated the Common Housing Management Law and apartment management bylaws were subject to administrative fines of several million won or administrative guidance measures.

Shin Wook-ho, director of the Common Housing Division at Gyeonggi Province, stated, "We plan to continue conducting audits on apartment irregularities and disputes next year," and added, "We will expand the common housing preliminary consultation service that was pilot-operated this year to proactively prevent common housing management irregularities and create transparent and efficient common housing management conditions."