(1) Reasons for Proposal

The Amendment newly inserts provisions prescribing the declaration of the appointment of managers for condominium buildings, an obligation to prepare and retain books on management expenses, etc., accounting audits, and supervision by heads of local governments. It strengthens the obligation to report management expenses, thereby ensuring a more transparent management of condominium buildings and creating a stable residential/business environment for the public. It gives micro enterprises more freedom in business by deleting the floor area requirement for the establishment of sectioned stores. It reduces the quorum requirement for changes to sections for common use and for written and electronic votes and newly inserts a system for making changes to sections for common use with alteration of rights, thereby promoting the effective management of condominium buildings. The Amendment also newly inserts an obligation for persons who parcel out a building to give notification of the first meeting of the managing body and newly inserts a system for requesting the appointment of a temporary manager, thereby preventing gaps in the management of condominium buildings, and otherwise addresses and improves upon a number of weaknesses that have emerged from the operation of the current system.

(2) Major Provisions

A. Relax requirements for the establishment of sectioned stores in commercial buildings (Article 1-2)

Promote the ease of use of small condominium buildings by deleting the 1,000 square meter floor area requirement for the establishment of sectioned stores

B. Newly insert an obligation for persons who parcel out a building to give notification of the first meeting of the managing body (Article 9, paragraph 3 newly inserted)

Increase the likelihood of a meeting of the managing body to establish regulations and appoint a manager by newly inserting an obligation for persons who parcel out a building to notify sectional owners of the first meeting of the managing body

C. Reduce the quorum requirement for meetings of the managing body (Article 15, paragraph 1)

(The current quorum is excessive and creates difficulties in decision-making through meetings of the managing body.)

Reduce the quorum requirement for meetings of the managing body such that matters concerning changes to a section for common use shall be determined by a resolution of not less than 2/3 of the sectional owners and not less than 2/3 of the voting rights at a meeting of the managing body, instead of not less than 3/4 of the sectional owners and not less than 3/4 of the voting rights at a meeting of the managing body

D. Improve the manager system (Article 24, paragraph 6 and Article 24-2 newly inserted)

1) Improve the transparency of the management of condominium buildings and the likelihood of supervision by administrative authorities by requiring the manager of any building with at least 50 sectional ownerships to declare his or her appointment to the competent authority

2) Newly insert a system for requesting the appointment of a temporary manager to prevent gaps in management or disputes concerning manager appointment that may arise in the absence of a manager or when a legitimate manager is not appointed, etc.

E. Newly insert measures to improve the transparency of the management of condominium buildings (Article 26, paragraph 1; Article 26, paragraphs 2 and 3 newly inserted; Article 26-2 newly inserted)

1) Improve the transparency of the management of condominium buildings and strengthen the right to know of sectional owners and occupants by requiring managers to report management expenses and other administrative affairs to occupants as well as sectional owners

2) Require managers to keep books on the collection, storage, use, and management of management expenses, etc., and retain the books for 5 years; and allow sectional owners, occupants, and other stakeholders to request access to the books or documentary evidence or request the issuance of a certified copy

3) Obligate the manager of any condominium building with at least 150 sectional ownerships to undergo an accounting audit conducted by an auditor at least once per year; prescribe that the manager of any condominium building with at least 50 and less than 150 sectional ownerships shall undergo an accounting audit conducted by an auditor when requested by not less than 1/5 of the sectional owners and occupants; and require managers to report to the sectional owners and occupants on the audit report and other results of the accounting audit

F. Newly insert supervisory rights for heads of local governments (Article 26-5 newly inserted)

Improve the transparency of management and promote dispute resolution by allowing the heads of local governments to require the manager of any building with at least 50 sectional ownerships to report on certain matters or submit relevant information where necessary for resident welfare

G. Newly insert a system for making changes to sections for common use with alteration of rights (Article 50-2 newly inserted)

Enhance the ease of use of condominium buildings by prescribing that where a change to a section for common use to control building deterioration, etc., alters the details of sectional ownership or right to use the site, a resolution may be adopted with the affirmative vote of at least 4/5 of the sectional owners and the voting rights thereof