Regional Housing Association Fraud Assistance Case | Defrauded in a Regional Housing Association but Securing a Full Refund With Daeryun's Assistance

The client joined OO Association upon the recommendation of an acquaintance regarding a regional housing association.

OO Association advertised that approximately 75% of the project site had been secured, and that the site needed for association establishment approval and project plan approval could readily be secured going forward.

Trusting this, the client concluded a membership agreement and deposited a total of 65 million won in three installments, including a provisional down payment.

However, for approximately 2 years the project did not proceed normally, and it turned out that less than half of the land required for the project had been secured.

In response, some association members, including the client, filed a criminal complaint against the head of OO Association and the project management company on charges of fraud and breach of trust.

Separately from this criminal complaint, the client sought to 🔗withdraw from the regional housing association and recover the 65 million won that had been paid.

▣ Housing Act, Article 11 (Establishment of a Housing Association, etc.)

② A person who intends to obtain authorization to establish a housing association in order to provide housing pursuant to paragraph (1) must satisfy all of the following requirements:

1. Securing the right to use* land corresponding to 80 percent or more of the relevant housing construction site;

2. Securing ownership** of land corresponding to 15 percent or more of the relevant housing construction site.

* Right to use: a legal right to use property for a specific purpose for a certain period. It does not necessarily accompany ownership and may exist in various forms, such as a leasehold or a jeonse right.

** Ownership: complete control over land. The owner not only may use the land but also has the right to dispose of it (sale, gift, lease, etc.) or to permit another person to use it.

In recruiting members for authorization to establish a regional housing association, whether a case falls under a situation in which specific facts concerning material matters of the transaction were falsely communicated by a method that warrants censure, in light of the practices and the principle of good faith governing such recruitment transactions, must be determined teleologically in accordance with the specific circumstances, taking into account various factors such as the content of the relevant statutes and bylaws, the content of the recruitment notice, the recruitment status at the time, and the course of progress before and after that.

- See Supreme Court, Judgment of October 28, 2021, 2021Da257743, and others

To obtain approval for the establishment of a housing association, one must secure rights to use 80% or more of the project site.

At the time the client entered into the association contract, OO association had secured only about 10% of the project site, yet it deceived the client by stating that it had secured 75% of the site.

Daeryun presented as evidence a transcript of the recording containing this content and proved the fraudulent act.

A regional housing association attracts considerable interest because it does not require a subscription savings account, its procedures are simple, and it can reduce the developer's profit margin, allowing housing to be obtained at a lower price.

However, recruiting members is not easy, and, above all, securing land is difficult, so projects are often suspended.

The oversight system is also lax, so accounting is often opaque, and embezzlement, breach of trust, and similar conduct frequently occur.

If you have been the victim of a regional housing association fraud, it is advisable to promptly obtain the assistance of an attorney and proceed with a lawsuit for the return of the down payment.

If you need assistance with this matter, you may contact 🔗Daeryun LLC at any time.