(1) Reasons for Proposal

As lodging business facility standards are further specified with an amendment to the Enforcement Rule of the Public Health Control Act, this Partial Amendment aims to apply them to the scope of the Enforcement Decree of the Act on Sale of Building Units.

This Partial Amendment aims to prepare requirements for persons engaged in trust business to succeed the status of sellers of buildings in units in the event that construction for sites under sale management trust is stopped in agency contracts with persons engaged in trust business under the Act on Sale of Building Units.

Living accommodation facilities cannot be used for residential purposes without changing their use under the Building Act and the Public Health Control Act, and it is often the case that many do not report as lodging business although they are required to while illegally converting their use into houses.

Thus, this Partial Amendment aims to clearly inform from the sale of facilities that living accommodation facilities cannot be used for residential purposes and are subject to reporting as lodging business, and require acquisitors of buildings in units to attach to contracts for the sale of buildings the documentation that they have been informed and confirmed and submit it to approval authorities when filing for approval on the use of living accommodation facilities.

In an effort to better protect the rights of acquisitors of buildings in units, this Partial Amendment aims to expand and clarify the reasons that allow acquisitors of buildings in units to terminate contracts in the event that it is difficult to maintain contracts for the sale of buildings due to reasons attributable to sellers of buildings in units under the Act on Sale of Building Units. 

Furthermore, this Partial Amendment is intended to correct the phrase that references a deleted provision.

(2) Major Provisions

A. As lodging business standards are defined as “30 or more rooms” or “a business area as at least 1 out of 3 of the gross floor area of the building” with an amendment to the Enforcement Rule of the Public Health Control Act, reflect the foregoing into the scope of the Enforcement Decree of the Act on Sale of Building Units (Article 2 subparagraphs 1 through 2 amended).

B. Specify construction implementation methods, allow at least 80 out of 100 of acquisitors of buildings in units to request persons engaged in trust business to succeed the status of sellers of buildings in units and implement construction in the event that construction for sites under sale management trust such as officetels and store buildings is stopped or delayed more than 6 months, and allow for implementing construction if agreed to by persons engaged in trust business (Article 3 paragraph 2 subparagraph 4 newly inserted).

C. Require sale advertisements to inform that living accommodation facilities are the buildings which cannot be used for residential purposes under the Building Act and subject to reporting as lodging business under the Public Health Control Act (Article 8 paragraph 1 subparagraph 5-4 newly inserted).

D. Require proof that acquisitors of buildings in units confirm reporting as lodging business under the Public Health Control Act and the prohibition of use for residential purposes under the Building Act to be added to contracts for the sale of buildings only for living accommodation facilities (Article 9 paragraph 1 subparagraph 9-3 newly inserted).

E. Expand reasons attributable to sellers of buildings in units to include “disposition imposed for any violation of the Act on Fair Labeling and Advertising” and “other reasons attributable to sellers of buildings in units listed as reasons allowing for terminating contracts for failing to fulfill the purposes of contracts” as reasons allowing acquisitors of buildings in units to terminate sale contracts (Article 9 paragraph 1 items d through e newly inserted).

F. As Article 9-2 paragraph 1 defining priority sale standards for residents has been deleted, delete the phrase “any of the subparagraphs of paragraph 1” referenced in Article 9-2 paragraph 2 subparagraphs 1 through 2 (Article 9-2 paragraph 2 subparagraphs 1 through 2 amended).