The Ministry of Land, Infrastructure and Transport (MOLIT) of Korea has announced a draft amendment to the Enforcement Decree of the Act on Sale of Buildings. This policy revision is intended to reduce unnecessary disputes over contract cancellations and enhance the stability of building sale contracts. The move comes amid ongoing concerns about the protection of buyers in the real estate market, particularly regarding large-scale building sales and officetels. By clarifying and rationalizing the grounds for contract cancellation, the government aims to establish a healthier and more transparent sales market.
The proposed amendment specifically targets buildings with a floor area of 3,000 square meters or more, as well as officetels and residential accommodation facilities with 30 or more units. Key changes include refining the reasons for contract cancellation, especially in cases where correction orders have been issued due to discrepancies between sales reports and advertisements. The amendment also plans to adopt contract termination grounds from the Fair Trade Commission’s standard apartment supply contract, further strengthening buyer protections.
The draft amendment was released for public notice on July 3, 2024, and will be open for a 40-day comment period. Stakeholders and the public can review the full text on the MOLIT website and submit opinions via mail or online. The government intends to expedite the legislative process after consultations with relevant agencies. Once enacted, the new rules will provide clearer standards for contract cancellation, focusing on cases where the contract’s purpose cannot be fulfilled due to violations.
Frequently asked questions include what constitutes valid grounds for contract cancellation under the new rules. For example, buyers may cancel contracts if there is a delay of more than three months in occupancy, double sales prevent ownership registration, or significant defects or violations occur. Another common question is how to submit feedback on the amendment; opinions can be sent by mail to the Real Estate Development Industry Division at MOLIT or submitted online through the ministry’s website.
The draft amendment to Korea’s building sale contract law is a targeted effort to address frequent disputes and ambiguities in the real estate market. By refining the criteria for contract cancellation and adopting established standards from the Fair Trade Commission, the policy strengthens protections for buyers and supports market stability. The open comment period allows for broad stakeholder input, which can further enhance the effectiveness of the final legislation. Overall, these changes are poised to reduce litigation and foster a healthier sales environment.