A related law revision that would allow the Minister of the Ministry of Land, Infrastructure and Transport to designate land transaction permit zones (LTPZs) within the same city or province has hit a snag. The Seoul Metropolitan Government submitted an opinion that consultation is needed before the MOLIT Minister designates an LTPZ. The ministry expressed reluctance to Seoul's view, citing difficulty maintaining confidentiality, but stepped back and agreed to conduct prior consultations on the condition of a ban on information leaks.
Even so, opposition centered on the opposition party continues to argue that expanding the MOLIT Minister's authority to designate LTPZs could infringe on property rights. The authority for the MOLIT Minister to designate LTPZs within the same city or province is expected to be granted no earlier than January next year.
On the 26th, according to the Ministry of Land, Infrastructure and Transport (MOLIT) and the Land Infrastructure and Transport Committee of the National Assembly, MOLIT reported to the National Assembly a plan to include in the enforcement decree of the Real Estate Transaction Reporting Act the scope and method of prior consultation with local governments when the Minister designates an LTPZ within the same city or province. The enforcement decree would allow the scope and method of consultation with local governments before designating an LTPZ to be set, and allow the matter, including mutual consultation details, to be submitted to the urban planning committee.
MOLIT decided to conduct prior consultations with local governments only for LTPZ designations related to speculation and included a non-disclosure obligation clause on related matters. It also created a new clause imposing up to one year in prison or a fine of up to 10 million won for leaking information.
This MOLIT plan follows a request from the Seoul Metropolitan Government to establish a prior consultation procedure before designating LTPZs within the same city or province. Seoul is said to have conveyed to MOLIT its view that a clause requiring consultation with the relevant mayor or governor before deciding on an LTPZ designation is necessary.
A bill to amend the Real Estate Transaction Reporting Act is currently pending in the National Assembly. Under current law, the MOLIT Minister has the authority to designate LTPZs when areas span two or more cities or provinces. When it is a part of the same city or province, the authority to designate an LTPZ lies with the mayor or provincial governor. The MOLIT Minister can also designate part of the same city or province as an LTPZ, but only as an exception when there are concerns about speculation related to public development projects.
For this reason, an amendment to the Real Estate Transaction Reporting Act is being pushed by the government and the ruling party to grant local government heads the authority to designate LTPZs within the same city or province, while allowing the MOLIT Minister to designate only areas recognized as having exceptional speculation concerns. The aim is to enable the MOLIT Minister to immediately pull the LTPZ designation card when home prices surge.
MOLIT expressed reluctance to Seoul's view. The concern is that designations might not be made in a timely manner and that it would be difficult to maintain confidentiality, allowing information to be used for speculation.
A MOLIT official told the National Assembly, "In fact, even when Seoul (designates an LTPZ), we consult in advance, but if we insert procedures for consultation in a form that many people can see through official documents, it seems there will be difficulties in terms of maintaining confidentiality," adding, "Also, when the level of consultation is officially codified, it will likely require consultation at a near-agreement level. If that happens, there is a concern that we could miss the right time to take action."
Although MOLIT stepped back by preparing an alternative that reflected Seoul's opinion, the amendment to the Real Estate Transaction Reporting Act appears likely to be made only next year. This is because the opposition party is still offering the view that expanding the MOLIT Minister's LTPZ authority carries the potential to infringe on property rights.
The opposition party is concerned that, under the Oct. 15 measures, Seoul as a whole and 12 areas in Gyeonggi Province were broadly tied as LTPZs, restricting the exercise of people's property rights, and that the MOLIT Minister could abuse the authority to designate LTPZs. They argue that tying areas as LTPZs based on the ministry's subjective judgment is administratively expedient and excessively restricts people's property rights.
A National Assembly official said, "We decided to hold another subcommittee meeting in early January next year and convene a plenary session to discuss the amendment again."