The local housing association apartment project starts in a situation where land acquisition is uncertain and causes various legal problems such as additional contribution requirements, false and exaggerated advertisements, and invalid guarantee certificates. This post details the risks of the local housing association project, including cancellation of contracts due to fraudulent acts, joint responsibility of the proxy office and the association, and the reality of refund guarantee agreements.

[Table of Contents]

1. Endless demands for additional contributions, can legal action be taken?

2. False land acquisition rates and floor counts, cancellation of contracts due to 'fraudulent acts'

3. Errors by proxy office staff, can the association also be held responsible?

4. The traps of guarantee certificates and full refund provisions

5. Ways to get a refund even if not due to fraud or error

   
   

1. Why are there continuous problems in the local housing association projects?

The biggest issue with the local housing association (LHA) projects is that they start in a 'land not secured' state. Unlike general sales where land is procured first, the association recruits members first and uses their contributions to purchase land and proceed with permits. Because nothing is confirmed in the early stages, it has structural limitations leading to project delays and disputes.

2. Endless demands for additional contributions, can legal action be taken?

Requiring additional contributions ranging from tens of millions to billions of won due to increased project costs is a common type of dispute in LHAs. If there is a basis in the association's regulations and a resolution from the general meeting, legal disputes may not be easy, so a thorough review of the initial contracts and regulations is essential.

3. False land acquisition rates and floor counts, cancellation of contracts due to 'fraudulent acts'

• Land acquisition rates: The Supreme Court views the status of land acquisition as an 'important matter' that determines whether a contract is concluded. If the rate is significantly overstated, cancellation of the contract due to fraud under Article 110 of the Civil Act is possible.

• Floor counts and scale: If a floor count that cannot be built has been promised, this is a typical violation of the obligation to inform. It becomes a subject of claims for contract cancellation and refunds due to fraud.

• Securing evidence: Advertising materials, recordings of briefings, text messages, and KakaoTalk messages are essential proof materials.

4. Errors by proxy office staff, can the association also be held responsible?

Often, the association tries to avoid responsibility by stating, "It's just a mistake by the proxy office staff." However, legally, the proxy office bears the employer's liability for its employees, and the association is jointly responsible for unlawful acts with the proxy office. Therefore, legal responsibility can also be imposed on the association.

5. The traps of guarantee certificates and full refund provisions

Guarantee certificates promising "full refund in case of project failure" are highly likely to be invalid. Because the contributions of the association members are 'joint property', refund agreements without the resolution of the general meeting are ineffective according to the court's position. However, if the association concealed this possibility of invalidity and deceived members into thinking it was valid, claims for contract cancellation due to fraud or error can be made.

6. Ways to get a refund even if not due to fraud or error

Even if proving fraud or error is difficult, there are ways. If the member fails to meet the qualification requirements and loses eligibility, they can apply the refund regulations specified in the regulations. At this time, penalties or proxy office fees may be deducted, but the timing and scope of returning the remaining amount need to be clearly reviewed.

We, Cheongchul Law Firm, will assist you with local housing association disputes

Disputes related to local housing associations are determined by initial responses and evidence collection. If you are currently struggling with additional contribution issues or wish to withdraw and get a refund due to false advertisements, please consult with our experts at Cheongchul Law Firm. We will do our best to protect our clients' valuable assets.

This post was written for informational purposes based on the content of the corresponding YouTube video, and we recommend conducting specific legal consultations directly with a lawyer.