This article was posted on Aug. 12, 2025, at 5:39 p.m. on the ChosunBiz MoneyMove site.
The Time Haeundae officetel was originally a four-star hotel and, since it's newly constructed, the materials and interior are on par with those used in LCT Haeundae, Busan. The price for a 20 pyeong unit is between 800 million to 1.2 billion won, and due to the high demand for Airbnb, only 45 out of 140 units are being converted for residential lodging and sold. It's a really good product, and in just ten days, about 20 units have already sold, so now it's a battle for the remaining units. The deposit ranges from 70 million to 80 million won, with monthly rent at 900,000 won, which will be deducted from the deposit later. You can decide whether to purchase after living for two years.Upon calling after seeing the sales announcement for The Time Haeundae officetel in Haeundae District, Busan, the officetel representative said,
An absurd situation has arisen where a major domestic trust company has promised responsible completion, yet an officetel in Haeundae District, Busan, has begun to sell without authorization. In cases of unauthorized sales conducted without the consent of the trustee and the major shareholder, there is a high possibility that the buyer will not receive legal protection later.
According to investment banking (IB) industry sources on the 12th, The Time Haeundae officetel in Haeundae District, Busan, is in the midst of recruiting tenants with the bait of conversion to purchase after two years of leasing. Although Koramco REITs Management and Trust, which completed the construction in a responsible completion type management land trust format, recognized and requested a halt to the arbitrary sales by NineTail, it has been over two weeks, yet sales continued on-site. On that day, the officetel representative, while introducing the units, emphasized again, "It's very popular, so you need to hurry with the lease contract," and added, "You can come anytime for a tour of the officetel."
The incident began as follows. Koramco signed a responsible completion guarantee type management land trust contract with NineTail in January 2023. They converted the existing hotel building into an officetel and completed the construction, receiving approval for use in June 2024. NineTail, a real estate consulting company established in 2019, is headquartered in Daechi-dong, Gangnam-gu, Seoul, and is represented by a person surnamed Woo. NineTail owns the predecessor of The Time Haeundae officetel, the Golden Tulip Haeundae (a residential lodging facility).
Recently, NineTail began unauthorized sales without the consent of the trustee, Koramco, and the major shareholders. Particularly, the fact that rental and purchase payments are expected to be received in the name of the trustee's account has made it impossible to avoid legal controversies, according to Koramco's explanation. They promote the idea that a 10% down payment allows potential buyers to live in the officetel for two years before deciding on the purchase, and that shared lodging such as Airbnb is legally permitted.
Koramco recognized this at the end of July, sending an official letter to NineTail's legal firm to notify them of the illegality of their sales activities and requested a halt to rentals and sales. They also demanded the cessation of the account opening intended to collect sales payments. Subsequently, they posted a pop-up notice on their homepage stating, "We are not associated with Koramco and take no responsibility for any damages." However, NineTail continues to promote rentals and sales.
An industry source stated, "It's rare to see such direct actions against a well-known trust company, so Koramco must be very bewildered," adding, "Given the distance between Seoul and Busan, the trust company and major shareholders may find it challenging to respond quickly, which could explain why they acted rashly."
However, a representative from NineTail stated, "NineTail is currently proceeding with a civil lawsuit for the trust asset return claim and terminating the trust to utilize the principles of bankruptcy isolation," noting, "Additionally, we have completed decisions from the court for asset preservation orders and comprehensive prohibition orders through corporate rehabilitation."
Industry sources voiced that in similar cases, potential buyers frequently lost not just the full amount of their down payment but were also embroiled in legal disputes before the transfer of the title. The responsible completion type management land trust system, introduced in 2015, promises that the trust company guarantees completion to the major shareholders instead of construction companies with low credit ratings. If the construction firm fails to complete the project by the promised deadline, the trust company must finish the construction within six months after the contractor's completion deadline.
Under such trust agreements, the relevant asset cannot be leased or sold without the consent of the major shareholders, who are the primary beneficiaries. Even if a buyer is unaware and enters into a contract, the amount paid must be deposited into an account under the name of the trust company for legal protection to be valid. However, the current leasing and sales activities by the trustee disregard these procedures, leading to the risk that the future buyers may not receive legal protection. If the trustee fails to repay the loan completely, the financial institution will recover the loan by selling the real estate, using the ownership of the trust company to demand eviction of tenants.
One type of rental fraud that has caused harm to many people is trust rental fraud. According to the Ministry of Land, Infrastructure and Transport, there were 12,03 cases of trust rental fraud among the total 29,540 cases recognized under the Special Act on Rental Fraud from June 2023, when it was applied, to the end of April this year. The amount lost in 177 cases of fraud that occurred in Seoul until the second half of last year exceeded 15.6 billion won. For instance, a person in their 40s was arrested and indicted after committing rental fraud worth 1.5 billion won by constructing a multi-family dwelling without capital and transferring ownership to a trust company as collateral for debt, all the while pretending it was still theirs. They deceived others by claiming, "The house is mine," and "It's safer because it's in a trust," before entering into lease contracts and stealing deposits.
An industry source remarked, "Until a few years ago, when the real estate market was strong, this was a popular method, but the situation has changed due to economic downturns and construction cost increases," adding, "Given the poor condition of the Busan sales market, it seems NineTail has determined that profitability is low and decided to engage in unauthorized rentals and sales." They further noted, "To prevent potential losses, buyers should check the registration certificates and the trust ledger, and confirm whether the trust company's consent is required before signing contracts."