Newly Revised Bill to Make Audits of “Officetels” Mandatory

Most officetel operators have been able to avoid proper audits, leaving them susceptible to criticism that they charge excessive maintenance fees. (image: Yonhap)

SEOUL, Sept. 21 (Korea Bizwire) — A newly proposed law is expected to have operators of large officetels audited every year.

In South Korea, an officetel is a multi-use property that contains both residential and commercial units.

Yesterday, the Ministry of Justice made an advance legislation notice regarding officetels to be implemented tomorrow.

The law would be applied to building complexes that have two or more owners per physical building.

Apartments, townhouses, multiplex housing, multipurpose buildings, shopping arcades, officetels and many other building types belong in this category.

At present, apartment complexes that house 300 units and above must be subjected to a yearly external audit, but most officetel operators have been able to avoid proper audits, leaving them susceptible to criticism that they charge excessive maintenance fees.

The new law would also make it compulsory for those appointed by more than 50 units within a large building complexes to operate the complex on their behalf to report their appointment to local jurisdiction authorities.

In addition, the new law states that monthly account books detailing maintenance costs be stored for six years, allowing unit owners and tenants to retrieve the files.

Buildings with more than 150 unit owners must undergo an external audit each year, while building complexes with more than 50 unit owners must be audited if more than one-fifth of the owners (including tenants) request it.

The revised bill also frees up the current regulation requiring businesses located within small shopping arcades to follow a set structure in physical form.

According to current laws, smaller shops with a floor area measuring less than 1,000 square meters require boundary barriers, walls or doors to make them solely independent.

In contrast, the ownership of stores within large commercial buildings such as department stores and shopping malls are recognized without boundary barriers.

The proposed revision would recognize ownership of small shops even if they lack independence in terms of physical structure.

H. S. Seo (hsseo@koreabizwire.com)