Hundreds of Households Unqualified to be Granted Preselling Housing Rights

The Board of Audit and Inspection of Korea said on February 9, “After a sample survey of 26,000 houses in 28 out of the 352 total housing complexes presold in 2003 to 2005 in areas where controversial speculation appeared, it was revealed that a total of 332 houses were presold to those who were actually unqualified.”

According to the audit agency’s “Results of the Audit on the Management of Housing Supply System” report, disqualified applicants who earned purchasing rights of houses for presell fit into two groups. First are those who were ineligible to apply for the apartments for which only people without a house could apply. Second are those who could apply to the preselling houses but who were restricted not to apply for the houses within the speculative areas because they already owned more than two houses.

Among the unqualified households, 23 did not meet the required period of five years of having lived without their own home, and 231 were found to have two houses. In addition, there were eight with four houses and two households with seven.

The Ministry of Construction and Transportation (MOCT) has decided to cancel the contract to supply houses to those unqualified winners and ask those who have already moved in to leave the houses. In order to uncover more unqualified winners, the ministry has also decided to investigate the all of the rest or 131,000 houses in the 324 housing complexes presold in the red-hot speculative areas during the same period. If all houses are indeed investigated, it is likely that there would be a large number of contract cancellations.

The reason that so many unqualified people won the rights is because those in charge of preselling failed to confirm the eligibility of applicants by checking the “Housing Information Network” provided by the MOCT, where information about those with more than two houses per household is available. They also failed to check the “winner management network” by the Korean Financial Telecommunications and Clearings Institute on which there are records of people who have won the right to purchase of preselling houses in speculative areas in the past five years.

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