Multiple cases of misconduct and irregularities have been uncovered in the purchase-based rental dwellings program of the Korea Land & Housing Corporation (LH).
According to materials submitted by the office of People Power Party lawmaker Kim Jong-yang, a member of the Land Infrastructure and Transport Committee, based on data received from LH on the 12th, a total of 24 cases of misconduct and irregularities were uncovered in LH's purchase-based rental dwellings program over the past five years (2020–2024).
The purchase-based rental program is a project in which LH buys existing dwellings and rents them out publicly. In this program, three cases were confirmed in which LH purchased dwellings owned by the families of its own executives and employees.
In Oct. and Dec. 2021, and in Aug. 2022 the following year, nine related employees were disciplined for failing to verify whether the dwellings were owned by the families of corporation employees.
However, the disciplinary measures amounted only to light penalties: warnings (three), reprimands (four), and cautions (two).
In addition, four cases were found in which some employees accepted money and entertainment from brokerage firms or improperly intervened in the selection of external Commissioners, undermining integrity and discipline.
In May 2021, an LH grade-3 administrative employee who received money and entertainment worth 630,000 won from a brokerage firm related to the purchase-based rental duties was dismissed, while another grade-3 administrative employee who condoned and abetted the illegal act received a warning.
In Feb. and Dec. 2023, a total of six LH administrative and specialist employees and a senior specialist were also caught for failing to remain neutral regarding specific items and undermining the fairness of purchase-based rental work.
In Aug. 2024, a grade-4 administrative employee was dismissed for improperly intervening in the selection of external Commissioners during the evaluation of a purchase asset management firm and receiving money and entertainment worth 990,000 won in return.
Three cases of overpriced purchases and improper contracts were uncovered.
In Jul. 2023, a grade-3 and a grade-4 LH administrative employee who signed a contract exceeding the ceiling and improperly handled the ownership transfer registration process were disciplined with a two-month suspension and a two-month pay cut, respectively.
The same audit also confirmed that a dwelling with an access road that was a private road (sado, personal road) had been purchased, resulting in a reprimand and a warning for two grade-3 administrative employees. Overpriced purchases exceeding the ceiling lead to budget leakage, and access via a private road can cause living inconveniences and legal and management risks.
In Dec. of the same year, despite the notice for purchasing existing dwellings specifying that apartments were excluded from purchase, one senior specialist who purchased an apartment received a three-month suspension, while another senior specialist and a grade-4 administrative employee received warnings.
In addition, violations of appraisal and deliberation procedures (eight cases), administrative negligence and poor field investigations (four cases), and other damage to work fairness and procedural issues (two cases) were uncovered.
However, it was confirmed that there was no separate audit or recommendation for improvement at the Ministry of Land, Infrastructure and Transport level regarding LH's purchase-based rental program.
Rep. Kim said, "The purchase-based rental system is intended to solve both the unsold dwellings issue and the challenge of housing welfare, but LH purchase-based rental officials with purchasing power can easily fall into moral hazard," adding, "the Ministry of Land, Infrastructure and Transport and LH should take heavy responsibility for lax oversight."