Law firm Cheongchul's Park Jong-han attorney conducted an interview with ‘Gyeongbuk Newspaper’ regarding ‘long-term reserve fund and embezzlement in the course of duty’.

The ‘long-term reserve fund’ operated for the long-term maintenance and management of multi-family housing is a fund for replacing and repairing major facilities in the common areas of apartments and other multi-family housing, regulated by the Multi-Family Housing Management Act.

On the other hand, the long-term reserve fund must be used appropriately according to the long-term maintenance plan, and there is a possibility of being punished for embezzlement in the course of duty if used differently from that plan. A fine may be imposed if the long-term reserve fund is used for ‘purposes other than those specified by law’, and the management company may be subject to a business suspension of up to 6 months. In particular, it should be noted that using the long-term reserve fund for repairs that are not yet due can cause problems.

Park Jong-han attorney emphasized that “if the long-term reserve fund of multi-family housing is used for repairs without following the long-term maintenance plan, even with the consent of the residents, there can be criminal penalties.” He also pointed out the importance of proper management of the long-term reserve fund and recommended seeking professional help, mentioning that there are increasing cases of sanctions due to improper use. 

You can check the details through the link below.

Long-term reserve fund… the importance of correct usage according to the long-term maintenance plan