Since the October 15 measures, the threshold for inheriting the status of a cooperative member has become stricter in 37 areas in Seoul and Gyeonggi Province.
With Supreme Court rulings and revisions to the enforcement decree piling up, the burden on buyers to verify eligibility has grown even heavier.
There have been repeated cases in which people signed contracts for redevelopment apartment listings only to find that they could not obtain cooperative-member status and instead became subject to cash settlement. The fault lies not with the buyer, but with the complexity of the system.
If you sign a contract without knowing when, where, and in what manner the regulations apply, the capital gains worth hundreds of millions of won can disappear in an instant.
The rules on transferring cooperative-member status in maintenance and redevelopment projects have been changed repeatedly from last year through this year. Here is a look at what has changed and how to respond.
[Key Points of This Article]
▶ If you buy a reconstruction or redevelopment apartment, it may seem as if you automatically become a “cooperative member,” but that is not the case. In speculative overheated zones, anyone who buys after a certain point cannot become a cooperative member and is instead paid back in cash and removed. This is called “cash settlement.”
▶ There are exceptional cases in which cooperative-member status can be inherited, but the most important condition is that the seller must have owned the home for at least 10 years and lived in it directly for at least 5 years. No matter how well the buyer meets the conditions, it does not matter.
▶ Jointly owned homes by spouses or inherited together by siblings are even more complicated. A Supreme Court ruling last year held that each co-owner must individually satisfy the requirements. If even one person falls short, that person’s share is settled in cash.
▶ Once cooperative-member status is lost, it cannot be restored. Even if a gift is revoked or a regulated area is later lifted, the status does not come back. In the end, checking before signing a contract is the only way.
▶ For those who were seeking transaction approval before the October 15 measures in areas such as Mok-dong and Yeouido in Seoul, a path to relief opened with the February amendment to the enforcement decree.
■ The entire city of Seoul is now under the regulatory net
On October 15 last year, the government announced the “Housing Market Stabilization Measures.” Under these measures, speculative overheated zones, which had previously applied only to the four districts of Gangnam, Seocho, Songpa, and Yongsan, were expanded to cover all 25 autonomous districts of Seoul.
In Gyeonggi Province, 12 areas were designated all at once, including Gwacheon, Gwangmyeong, Seongnam (Bundang, Sujeong, and Jungwon districts), Suwon (Yeongtong, Jangan, and Paldal districts), Anyang’s Dongan district, Suji district in Yongin, Uiwang, and Hanam. The measures took effect on October 16.
Designation as a speculative overheated zone does more than tighten lending rules. Article 39, Paragraph 2 of the Act on the Improvement of Urban Areas and Residential Environments immediately takes effect. In reconstruction projects, anyone who acquires the property after approval for the establishment of a cooperative, and in redevelopment projects after approval of the management and disposal plan, cannot become a cooperative member. This means that virtually all maintenance project zones in Seoul are now subject to this restriction.
On top of that, a “triple regulation” system was imposed, with a simultaneous designation of adjustment target areas and land transaction permit zones. The October 15 measures also limited housing supply for reconstruction cooperative members to one home. Cooperative members or general purchasers selected as supply recipients may not apply for a parcel of housing in another maintenance project for five years.
■ There are exceptions, but they are narrow
Even though the general rule is that cooperative-member status cannot be obtained, there are exceptions. Of the seven exception grounds set out by law, the one most frequently used in practice is the “one household, one home, long-term ownership” requirement. If the seller has owned the home for at least 10 years and lived there personally for at least 5 years, the buyer can inherit cooperative-member status.
The key point here is that this requirement is based on the “seller.” It does not matter how well the buyer meets the conditions. The residence period is determined by the resident registration record, and the residence periods of a spouse or direct lineal descendants/ascendants may be combined. In the case of inheritance, the ownership and residence periods of the decedent may also be combined.
There are other exceptions as well. These include cases where all household members relocate to another metropolitan city or province for work, livelihood, medical treatment, schooling, or marriage; cases of overseas departure for at least two years due to emigration; and cases where someone who was not a member of the existing household acquires the property through inheritance.
In reconstruction projects, an exception is also recognized if the project implementation approval application is not filed within three years of approval to establish the association, while the cooperative-member status has been maintained for at least three years.
■ Buying shared interests has become more complicated after a Supreme Court ruling
A Supreme Court ruling issued last August shook up long-standing market practices. In Supreme Court case 2022Da228230, the Court established the principle that whether the exception requirements for transferring cooperative-member status in jointly owned real estate are met must be determined individually for each co-owner. Previously, the Ministry of Land, Infrastructure and Transport had interpreted the rule to mean that if one representative cooperative member satisfied the requirements, the status could be transferred for the entire share.
After the ruling, the ministry sent an official notice to local governments on November 4 last year, formally changing its interpretation of the law. Shares held by co-owners who satisfy the exception requirements may be transferred, while shares held by those who do not satisfy them are restricted from transfer. As a result, shares that do not meet the requirements become subject to cash settlement.
For maintenance project listings involving shared ownership, such as homes jointly owned by spouses or inherited jointly by siblings, buyers must now check the ownership period, residence period, and home-ownership status of every co-owner individually. If even one person does not meet the requirements, that share is handled through cash settlement.
The problem is that there is still no clear guidance on cases where co-owners transfer shares among themselves, such as a sibling selling a share to another sibling or spouses adjusting ownership shares between themselves. In the field, transactions have continued to stall this year because of the uncertainty.
■ A relief path for those who contracted before the October 15 measures opened in February
In areas such as Mok-dong and Yeouido in Seoul, which had already been designated as land transaction permit zones, a separate confusion arose. This was because people who had drawn up purchase agreements before the October 15 announcement and were waiting for district office approval suddenly faced the risk of losing cooperative-member status due to the new speculative overheated zone designation.
This problem was resolved through the revision of the enforcement decree of the Urban Improvement Act on February 3, 2026. The amendment, promulgated and enforced as Presidential Decree No. 36073, exceptionally recognizes the transfer of cooperative-member status when a land transaction permit was lawfully applied for before the speculative overheated zone designation and the contract was concluded afterward in accordance with that permit.
It also applies retroactively to areas designated as speculative overheated zones from October 16, 2025 until just before the amendment took effect. However, the contract date must be verifiable through records of the down payment.
■ What must be checked before signing a contract
The reason problems keep recurring in practice is that the responsibility to verify lies with the buyer. Even if the seller’s failure to meet the requirements is discovered only after the contract, cooperative-member status cannot be restored.
Case law holds that once cooperative-member status is lost, it cannot be revived even if a gift agreement is canceled. In the same vein, the Ministry of Government Legislation has interpreted that even if a cash-settled person remains after a speculative overheated zone designation is lifted, the status cannot be restored through the later lifting alone.
The documents that must be checked before signing are specific. The seller’s register of real estate rights should confirm 10 years of ownership, and a resident registration copy should prove 5 years of residence.
The household’s home-ownership records must be reviewed to determine whether the one-household, one-home requirement is met, and if the property is jointly owned, the same documents from all co-owners are needed. It is also essential to confirm whether the property is actually within a speculative overheated zone, whether approval to establish the reconstruction cooperative has been completed for reconstruction, and whether approval of the management and disposal plan has been completed for redevelopment.
The contract should also include special clauses. Basic provisions include a clause confirming the transfer of cooperative-member status, a clause stating that the contract may be canceled and penalties refunded if the requirements are not met, and the seller’s written statement and seal certificate. If a prior written inquiry and response from the relevant local government or the Ministry of Land, Infrastructure and Transport is attached before signing, the likelihood of disputes can be greatly reduced.
Maintenance project listings carry large capital gains, and the regulations surrounding them are equally dense. Before putting pen to paper, carefully examining the seller’s eligibility is the only way to prevent the worst-case outcome of cash settlement.