Gwangjin-gu has launched a sweeping investigation into speculative real estate schemes in which so-called "planning real estate" operators split fractional shares of private alleyways within small-scale redevelopment zones and sell them at inflated prices, causing financial harm to investors, the district announced Monday. District Mayor Kim Gyeong-ho is leading the crackdown.
The schemes have grown increasingly brazen in recent months. Speculators purchase back-alley roads in residential neighborhoods at low prices, then divide ownership into dozens of fractional shares and resell them at four to five times the original purchase price. The operators have been running false and exaggerated advertisements claiming that acquiring a share of such roads would entitle buyers to large cash compensation or apartment pre-sale rights when a redevelopment project is eventually carried out.
The rampant share-splitting transactions are artificially inflating the number of landowners within redevelopment zones, generating serious side effects — deteriorating project viability, stoking conflict among association members, and delaying redevelopment progress — with the ultimate burden falling squarely on long-term residents.
In response, the district will rigorously verify the accuracy of real estate transaction reports and check for false filings. Any corporation found to have underreported or filed erroneous declarations will be immediately designated for a special tax audit under Article 82, Paragraph 2 of the Framework Act on Local Taxes. The district also plans to impose fines for false filings and refer suspected violations to investigators without exception.
"We will thoroughly investigate planning real estate operators who lured small investors and rapidly split and sold fractional shares, and will punish any fraudulent transactions without exception," Kim said. "Investors should be especially cautious, as road-share investments marketed as low-cost opportunities carry a real risk of losing their principal."
seouldream01@heraldcorp.com
