Green building law passed by the National Assembly... Mandatory direct payment of private construction costs

Green remodeling is mandatory for old public buildings that require energy performance improvement.

The Ministry of Land, Infrastructure and Transport announced on the 20th that the amendment to the Green Building Act with this content passed the plenary session of the National Assembly.

According to the amendment, the energy performance and deterioration of buildings will be inspected on-site to select obligatory targets and manage and supervise their implementation.

In order to expand green remodeling of private buildings, which account for the majority of old buildings, we have also established a basis for providing subsidies, loans, consulting, and interest support. The amendment will take effect six months after its promulgation.

An amendment to the Private Rental Housing Act was also passed, which regulates the act of recruiting prospective tenants in the form of investors, members, etc. and receiving investment funds or membership fees.

Accordingly, rental business operators cannot recruit tenants and prospective tenants, except when they supply private rental housing registered in accordance with the law, or when cooperatives or promoters established to supply private rental housing recruit members. Anyone who violates this law by recruiting or receiving money will be subject to imprisonment for up to 2 years or a fine of up to 20 million won. Even in cases of solicitation alone, a fine of up to 30 million won is imposed.

'Change in circumstances' was added to the reason for cancellation to enable the cancellation of public-supported private rental housing supply promotion districts where it is difficult to proceed with the project due to changes in circumstances, such as opposition from local residents. The amendment will take effect six months after its promulgation.

As with public orders, an amendment to the Framework Act on the Construction Industry was also passed mandating the use of an 'electronic payment system based on direct payment to the orderer' for private construction projects over a certain size.

This is a measure to prevent the account of the contractor or subcontractor from being seized and non-payment of wages, etc. in the process of payment of construction work in the following order: orderer → contractor → subcontractor → construction worker.

The electronic payment system is also applied to construction equipment rental payments.

A basis has also been established for local governments to support the costs of issuing payment guarantees for subcontract payments and construction machinery rental payments. Payment guarantee is a system to protect subcontractors and construction equipment rental companies in the event that construction payment is not received due to the orderer's bankruptcy, etc. The amendment will take effect from January 1 next year.