Korea Land and Housing Corporation targets wage arrears and housing management issues

The Korea Land and Housing Corporation (LH) has announced a comprehensive plan to eliminate wage and payment arrears at construction sites. To support workers and subcontractors ahead of the Chuseok holiday, LH is accelerating the disbursement of approximately 591.6 billion won in construction payments, reducing the processing time from a maximum of 19 days to 10 days.

To enforce compliance, LH will implement strict sanctions. Primary contractors found responsible for arrears will receive ‘quality deficiency notices,’ resulting in point deductions for future bids. Subcontractors will be designated as ‘managed subcontractors,’ which can restrict their participation in subcontracting for up to three years. LH is also operating a ‘Response Team’ to monitor payment status and prevent long-term delays.

Separately, LH faces scrutiny regarding its housing management and supply efficiency. Data submitted to the National Assembly reveals that LH’s purchased rental housing has seen a high volume of facility repair and defect requests, averaging around 160,000 cases annually. Issues include leaks, mold, and safety-related defects, with some repairs remaining unaddressed for over 600 days.

Furthermore, a bottleneck has been identified in LH’s new construction rental housing program. While approximately 288,000 households applied for the program last year, only about 14,000 reached the construction stage, representing a 4.9% conversion rate. Many projects failed to proceed due to insufficient site locations, poor design quality, or the inability to secure land.