“Abandonment of contract, difficult to get refund”… Taeyoung Construction's adoptees are burning hard
“What should I do if I can’t get a loan for the down payment?” , “Wouldn’t it be better to implement refunds than fulfill sales?”
Contractors who have purchased apartments being built by Taeyoung Construction are sighing deeply. While the majority of buyers are worried that they will not be able to move in on the scheduled date, buyers who want to give up their contracts are expressing dissatisfaction with the difficult refund conditions.
Taeyoung Construction headquarters in Yeouido, Seoul on the 18th.
In addition, many complexes are considering replacing construction companies due to the decline in the brand image of apartments due to workout applications, but the concerns of prospective tenants are deepening as it is expected that it will be difficult to find new construction companies due to high interest rates, rising raw material prices, and a recession in the real estate market.
According to the Ministry of Land, Infrastructure and Transport on the 29th, among the housing businesses currently under construction by Taeyoung Construction, sales are in progress and there are 22 businesses with sales contractors, totaling 19,869 households. Of these, 14 (12,395 households) were insured by the Housing and Urban Guarantee Corporation (HUG). The six complexes are business sites ordered by the public, such as Korea Land and Housing Corporation (LH), and can be constructed by joint contractors as needed. The remaining two workplaces are trust companies or local housing association workplaces.
The government decided to support these businesses so that they can be completed without disruption by protecting sales contract holders and refunding sales fees, and promoting replacement, restructuring, and sale of construction companies for businesses that are having difficulty proceeding normally.
Perspective view of ‘Uiwang Centline Desian’ sold by Taeyoung Construction
However, tenants of Taeyoung Construction's housing project are complaining that the government's measures are ineffective. In particular, it is pointed out that if you give up the sale and apply for a refund, the conditions are strict and it is not effective.
In fact, in order to receive a refund under the pre-sale guarantee system, the site must be recognized as a ‘guaranteed accident’ site in accordance with the HUG guarantee terms and conditions. Workout alone is not a pre-sale warranty accident requirement. A guaranteed accident is recognized only when construction has been halted at the site for more than three months and it is confirmed that construction is difficult to proceed. Additionally, if the completion rate is 80% or higher, there is no major problem in implementing construction refunds, but for workplaces with a completion rate of less than 80%, the consent of more than 2/3 of the sales contractors is required.
As a result, there were conflicting opinions all day long in the subcontractor community (open chat room, etc.) of the Taeyoung Construction sales complex over questions such as ‘Which is better between refund fulfillment and sales fulfillment?’
In the case of projects being promoted by trust companies or local housing associations, the tenants are demanding a replacement of the construction company, but the developer is in trouble because it is not an easy situation in reality. Due to rising construction costs and a recession in the real estate economy, it is difficult to replace construction companies at businesses in the Seoul area, as there are no construction companies coming to work at businesses where problems are occurring.
Taeyoung Construction's position is that it will continue construction as much as possible. An official from Taeyoung Construction said, "Even if a workout is entered, only financial debts will be frozen and there will be no problem with payment of construction costs, etc." and "Unless there is a separate request according to the contract conditions of the ordering party, the business currently in progress will continue the project as much as possible without stopping construction." “I will go,” he explained.