Public Law Regulations on Household-Increasing Remodeling Projects

The public law regulations for remodeling projects were introduced to improve residential environments through the development and maintenance of multi-family housing, and to prevent low-quality reconstruction projects. Remodeling projects were initially focused on preserving and managing multi-family housing, and so did the “household-increasing remodeling,” which was introduced to activate remodeling projects. Notwithstanding, nowadays, household-increasing remodeling projects are more akin to reconstruction projects because they involve the reconstruction of new apartments and, simultaneously, a comprehensive reconstruction of housing complexes. Despite similarities, remodeling projects are governed by the Housing Act and subject to weaker public law regulations, while reconstruction projects are governed by the Act on the Improvement of Urban Areas and Residential Environments and subject to stronger regulations. To initiate a household-increasing remodeling project for increasing household numbers by 30 or more, it is necessary to secure project plan “approval”; if the household number increase is less than 30, it is necessary to secure a “permission”. The “permission” relates to building management activities, whereas an “approval” involves a comprehensive assessment of the residential area in light of urban planning. Remodeling projects are also examined differently based on whether they affect the entire housing complex. Still, distinguishing the procedure for project initiation based on the increase in household numbers may not be rational and can lead to regulatory arbitrage. Traditionally, remodeling projects involved minimal changes in property ownership because the residents came back to their remodeled houses. This led to less attention being given to post-project rights, and although the Housing Act mandates the establishment of a “plan to alter rights” for household-increasing remodeling projects, it fails to establish the details. As household-increasing remodeling projects are becoming more similar to reconstruction projects, the uncertainty has intensified regarding resident rights assignment. These uncertainties can lead to disputes among residents regarding the content of plans to alter rights. Currently, there is a need for more detailed legal regulations to enable the reasonable assignment of rights among residents regarding newly constructed buildings and their land. This can foster efficiency in the use of these buildings and land in remodeling projects.