1. Reasons for Proposal

In accordance with the amendment of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (Act No. 18941, promulgated on June 10, 2022, effective as of Dec. 11, 2022), when a committee of promoters or a project implementer borrows funds, reporting to the head of the relevant Si, Gun, etc. is required, proposal of relocation grants, etc. by constructors are prohibited, inappropriate labeling/advertisement by constructors, etc. are prohibited and the detailed scope of such labeling/advertisement is to be prescribed by Presidential Decree.

Therefore, this Partial Amendment aims to: (i) prescribe detailed contents, procedures, etc. of reporting borrowed funds, prescribe the specific extent to which a proposal to provide moving grants, relocation grants, relocation promotion grants, etc. by constructors, etc. is prohibited and prescribe the specific extent to which provision of false/exaggerated information is prohibited among other matters, such that it prescribes matters delegated to it under the Act and matters necessary for enforcement of the Act, etc., and (ii) ease requirements for designation of trust companies and enable the base for calculating rental housing ratio to be the total floor area among other matters, such that it reflects matters necessary for efficient promotion of improvement projects and for improvement of cited provisions, etc.

2. Major Provisions

A.     Determination of the Base for Calculating Rental Housing Ratio in Redevelopment Projects (Article 9 (1) 2)

Prescribe that the mandatory construction ratio for rental housing in redevelopment projects shall be 20 percent or less of the total number of housing units to be constructed or 20 percent or less of the total floor area so that such ratio may be calculated not only based on the total number of housing units but also based on the total floor area.

B.     Addition of Minor Modifications to the Implementation Plan (Article 13 (4) 1-2)

Prescribe that changes to the estimated amount of the charge apportioned to the owners of each plot of land or each structure and the ground for calculating the amount within an implementation plan is a minor modification so that the modification procedure is simplified.

C.     Easing of Requirements for Designation of a Trust Company as a Qualified Developer (Article 21, subparagraph 3)

Ease the requirement for designation of a trust company as a qualified developer to having in trust 1/3 or more of the whole area of the improvement zone excluding state or public land to enable efficient project implementation in cases where fulfillment of the requirement is effectively made difficult due to the inclusion of state or public land in an improvement zone.

D.     Method for Reporting Borrowing of Funds (Article 87-2)

Prescribe that a committee of promoters or a project implementer shall, within 30 days of the date of borrowing of funds, report to the head of the relevant Si, Gun, etc. the lender, date of borrowing, amount borrowed, interest rate, repayment deadline and repayment method and attach the resolution of the general meeting and loan agreement.

E.     Detailed Scope of the Prohibition on Proposal of Relocation Grants, etc. by Constructors (Article 96-2 (1))

Prescribe that the proposal for moving grants, relocation grants, relocation promotion grants and other monetary/financial benefits by constructors, etc. is prohibited in principle, but that the proposal to lend funds for additional relocation expenses at an interest on par with the interest payable by constructors, etc. when borrowing such funds from financial institutions is permitted.

F.     Detailed Scope of the Prohibition on Proposals by Constructors Other than Regarding Construction (Article 96-2 (2))

Prescribe that payment of rebuilding charges in accordance with Article 2 (3) of the Restitution of Excess Rebuilding Gains Act by proxy, proposal to deviate from the law regarding the procedure and method of rental housing transfer, transfer price, etc. prescribed in Article 79 (5) and (6) of the Act, the law regarding the estimated charge apportioned to the owners of each plot of land or each structure and disposal method in Article 74 (1) 3 and 4 of the Act, the law regarding the sales price ceiling system in accordance with Article 57 of the Housing Act, etc. is prohibited.

G.    Scope of Prohibition on the Provision of False/Exaggerated Information by Constructors (Article 96-3)

Prescribe that (i) providing information that deviates from the objective information in conformity with the improvement project method or concealing such objective information and (ii) providing excessively positive or negative profit and loss calculations of promoting improvement projects among other matters is prohibited.