‘Dunchon Jugong Reconstruction Lien is being exercised. Unauthorized access, vandalism, or damage to posts may be punished according to related laws.’
The reconstruction work of Dunchon Jugong Apartment (Olympic Park Foreon) in Gangdong-gu, Seoul finally stopped. The Dunchon Jugong Reconstruction Project, which was scheduled to be completed in August 2023 after entering the general sale in the first half of this year, was halted on the 14th with a completion rate of 52%.
At 2 pm on the 14th, placards exercising the right of lien were posted at various places in the construction site screens. A banner was also hung outside the apartment building. This is a sign that the Dunchon Jugong Construction Project Group (Hyundai E&C, HDC Hyundai Development, Daewoo E&C, and Lotte E&C) has entered into a lien exercise.
An official from the construction project team said, “All sites will be closed after construction is completed by 6 pm on the 14th.” For the exercise of the lien, access to this place is completely controlled from 00:00 on the 15th, except for those related to the construction project team.
In some areas, construction continued, but in most areas, work was stopped. Large trucks loaded with construction materials left the site one after another. Only the workers who carried the lien exercise banner on the small truck entered each construction area with the guidance of the site manager. One on-site manager said, “The lien exercise banner was attached to the fence outside the complex, and the installation of banners in the building is continuing. We will continue to work until tomorrow morning,” he said.
The construction project group and the union execution department did not find any contact point after the 14th of last month, when the construction project group notified the construction stop. An official from the construction project group said, “On the 11th, the executive department of the association said, ‘I will accept the increase in the construction cost. Instead, I was informed that it should be upgraded with the finishing materials set by the union.” He said, “There is no mention of acknowledging the change contract, and we have decided that we cannot be dragged back in this way.”
The core of the conflict is the construction change contract signed by the executive department of the former Dunchon Jugong Reconstruction Association with the construction project team on June 25, 2020. Originally, the construction cost of 2.6 trillion won set at the general meeting in October 2016 was increased to 3.2 trillion won by the former union executive, and a contract was signed to change the existing 11,106 households to 12,032 households including commercial buildings. That is the argument of the current union executive. On the 21st of last month, the executive department filed a lawsuit to nullify the contract to increase the construction cost with the Seoul Eastern District Court. In addition, it was decided to hold a general meeting on the 16th to deal with the issue of canceling the contract with the construction company.
The construction project team also said, “It was a change contract according to a due process.
There is still the possibility of a dramatic reconciliation, but the extension of the construction period becomes unavoidable as long as the construction team has entered into the exercise of the lien. The construction project team must also bear the burden of compensation for delay due to the extension of the construction period.
In the end, it is the members who suffer the most. The amount of loans for moving expenses lent by the association from financial institutions amounted to 1.28 trillion won. Including 700 billion won of loan for business expenses, only 2 trillion won of borrowed money from the financial sector is equivalent to 80 billion won in annual interest burden. All of these costs will go back to the member’s share.
It is also realistically difficult for the union to find a new construction company. The construction project group is in the position of withdrawing from the project if only the cost of the spent construction is settled, but the problem is the amount of settlement. The total settlement amount suggested by the construction project group is about 2.5 trillion won. An expert in the construction industry said, “Even if the existing construction team resumes construction, it will take at least six months for the construction to normalize. said. Another construction industry official said, “It is certain that the share of common members will continue to increase, and there is a possibility that some members will give up moving in because they cannot afford the share.”
