Management Fee Late Payment Charges Reflect Number of Overdue Days ... Interest Rate Capped at 12% Per Annum

Gyeonggi Province has amended the 'Standards for Multi-Unit Housing Management Regulations' for rational and transparent management of multi-unit housing and implemented the changes from the 10th.

This amendment to the standards was prepared to supplement shortcomings that emerged in the process of multi-unit housing complexes operating management regulations in relation to the 'Multi-Unit Housing Management Ordinance' enacted and implemented on August 12, and to improve problems identified in the 'Gyeonggi Province Multi-Unit Housing Management Fee Comprehensive Inspection Results' announced in September.

The province gathered opinions from multi-unit housing complexes, cities and counties, specialized organizations including the Gyeonggi Regional Association of Housing Managers, and received legal consultation from legal advisors for this amendment.

The amended standards have been applied across all aspects of multi-unit housing management, including audit and composition of resident representative councils, contract renewal for existing operators such as housing management firms, and accounting for management fees.

First, provisions related to resident representative councils have been amended and newly established to significantly strengthen audit functions.

Auditors have been expanded from one to two for selection, and complexes with fewer than 500 units can also directly elect the chairperson and auditors if they wish.

If an election management committee for the composition of a resident representative council is not established for one month or more, a measure has been introduced to request the mayor or county governor to appoint committee members, minimizing operational gaps.

Additionally, late payment charges on management fees adopt a specific calculation method that reflects the number of overdue days, with the interest rate capped at 12% per annum, strengthening the rights of residents.

A service fee settlement system has been introduced to prevent leakage of management fees. Accordingly, multi-unit housing must mandatorily settle accounts with service contractors when unpaid reasons arise such as the four major insurance payments and wages.

A newly established 'System Prohibiting Debt-Bearing Construction for Residents' also bans 'installment construction.' This measure was prepared to prevent unreasonable construction projects carried out by obtaining loans from financial institutions when no budget exists. Additionally, annual budget limits have been set for operating expenses of resident representative councils and election management committees, restricting use to designated items only.

Furthermore, taking into account cases where multi-unit housing complexes amend management regulations with content different from the province's standards, guidance and supervision at the level of mayors and county governors have been strengthened.

Paek Won-guk, Director of Urban and Housing at the Province, stated, "Through this amendment to the multi-unit housing management regulations standards, we expect residents' rights to be protected and management fees to be managed transparently," and added, "We will do our best to further develop the multi-unit housing management culture."

Meanwhile, mandatory management-target multi-unit housing in the province must reference the amended standards to amend their management regulations by November 11 and report them to the mayor or county governor within 30 days.

The full text of the management regulations standards amended by the province can be found on the province's website (www.gg.go.kr Gyeonggi Province-Integrated Data Room) and on city and county websites.