Provincial Builders Face Apt. Contract Cancellations
By Jane Han
Staff Reporter
A group of disgruntled homebuyers of a newly-built apartment building in Cheongju, North Chungcheong Province, demanded Shinyoung Engineering & Construction cancel their contracts last month, claiming that the finished complex didn't look the same as that shown on the blueprint.
The differences they referred to were mainly the mini-shopping center and its lack of stores, the roads surrounding the complex and the color of the apartment building.
``We were tricked into buying the apartment, so we deserve to be freed from our terms of contract,'' the group said in an official statement.
The argument may sound outrageous, but a growing number of homebuyers are taking similar action against builders to find their way out of deals that were signed prior to construction.
The real reason for them wanting out, however, is not crooked roads and insufficient shopping facilities.
``Most of them are finding it almost impossible to sell their existing homes to move into the newly built units or they don't have enough money to finish paying off the builders,'' said Na Ji-hyun, a consultant at Dr. Apt, a local real estate brokerage. ``So they're scrambling for ways to get out of their contract.''
Such moves have become more prevalent nationwide recently, but the number of cases have markedly soared particularly in the Busan and Ulsan areas, where major apartment construction projects have been underway for the past few years.
According to Busan District Court Wednesday, homebuyers' class actions against builders were rare two to three years ago during the housing boom, but the situation has quickly changed over the past few months.
It said a group of 123 prospective tenants of a brand new apartment in central Busan have recently filed a suit against a large-sized builder for not completing the units ``identical to the model house,'' while an alliance of 75 people in Ulsan sought cancellation as the construction firm delayed the move-in date by four months.
Another group of 305 owners filed a similar claim against a firm for ``visual differences'' and for bargain-selling unsold apartments at ``unacceptably low prices.''
Kim Kyoo-jung of Property 114, another property brokerage, says many bargain-seeking buyers, who made purchases via competitive lotteries, are disappointed that the overall real estate market has tanked and prices have dropped even lower than their purchase values.
``They're basically looking for every possible reason to get out of their contracts without paying any penalty,'' said Kim.
However, legal experts say that despite the effort, homebuyers generally cannot cancel apartment contracts once they've paid their deposits.