"Prevent Excessive Construction Cost Hikes"... Ministry to Conduct Special Inspections at 16 Redevelopment Sites

Inspect 16 Projects Without Construction Cost Verification
Examine Reasons for Cost Increases and Their Appropriateness
Refer Cases for Investigation Over Legal Violations Such as Breach of Trust

The Ministry of Land, Infrastructure and Transport said on October 14 that it will begin special on-site inspections on October 19 to crack down on excessive construction cost increases and unlawful conduct by redevelopment and reconstruction associations.

The ministry and local governments previously conducted a comprehensive survey from August 27 to September 22 to check construction cost increase rates at redevelopment and reconstruction sites, identify which projects were subject to verification, and determine whether verification had been carried out. The survey found that 138 of the 568 redevelopment and reconstruction projects nationwide with selected contractors had not undergone construction cost verification, despite being subject to it under the Act on the Improvement of Urban Areas and Residential Environments.

The ministry selected 16 of these projects for joint special on-site inspections with relevant agencies. The inspections will take place in two rounds: from October 19 to 30 and from November 9 to 20. The Korea Real Estate Board will examine whether construction cost estimates are appropriate and assess the reasons for increases, while local governments will investigate whether laws and association bylaws have been violated. The ministry will draw up and oversee the inspection plan.

For the remaining projects excluded from the special inspections, the ministry and local governments will issue administrative guidance to the individual associations to ensure they carry out construction cost verification.

If violations of laws are identified during the inspections, the authorities plan to issue corrective orders and provide administrative guidance. They will refer cases for investigation if they uncover evidence of serious crimes, including embezzlement, breach of trust, or fraud. The inspection results will be provided to association members, and examples of major legal violations will be distributed to associations nationwide for use as training materials for association executives.

"There have been cases in which projects were delayed by disputes over construction costs between associations and contractors during the redevelopment process," said Yoon Youngjung, housing renewal policy director at the Ministry of Land, Infrastructure and Transport. "We expect these special on-site inspections to prevent harm to association members, improve the appropriateness and transparency of construction cost contract procedures, and resolve disputes, thereby enabling redevelopment projects to proceed more swiftly."

This content was produced with the assistance of AI translation services.