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KNHC Discloses Original Prices of Apartments

Posted August. 29, 2007 07:22,   


The Korea National Housing Corporation (KNHC) is planning to make public the original prices of 88 apartment complexes supplied nationwide for five years from 2002 to 2006.

The KNHC’s announcement is expected to make waves in the housing market as the prices the corporation are about to publish include item-by-item construction costs, unlike the price disclosure system the government is implementing beginning next month.

In particular, legal disputes could arise over the reimbursement of payments, given that residents in some of the apartments built by KNHC are in preparation for a suit seeking the money the KNHC allegedly gained from profiteering.

A high-ranking KNHC official said that the company will make public in September the original prices of apartments from 2002 to 2006 and that verification by certified public accountants is currently under way.

The government decided to disclose sales prices of homes starting next month through the revision of the housing building code, but the prices include profits, making it hard to figure out what the original prices were.

In contrast, this time around, prices of a total of 73,715 homes in 88 KNHC apartment complexes, excluding sales profits, will be published with their land cost, direct and indirect construction costs, design and supervision costs, and collateral and other costs listed.

However, for apartments granted for construction before March 2005, whose original prices are difficult to calculate, three to four categories of costs will be released.

The planned disclosure came after the Supreme Court ruled in favor of plaintiffs in a suit brought by homebuyers for KNHC apartments in Pung-dong District, Goyang, Gyeonggi Province on June 1.

The court ruling said that a thorough interpretation of whether the KNHC should disclose information is necessary to guarantee the public’s right to know and to encourage public participation and enhance transparency in administering state affairs. The ruling demanded the release of the prices.

With the disclosure of the construction prices, KNHC homebuyers are planning to file a lawsuit if the sales prices are found to be unreasonably higher than the construction prices.

Min Wang-ki (39), who is leading the legal battle at the KNHC apartment complex in Pung-dong district, hinted at the possibility of a class action lawsuit with other victims if the KNHC is found to have taken excessive profits.

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