2026.10.26. The Fair Economy — The Fair Trade Commission imposed corrective orders and public disclosure orders on four private rental apartment developers — Dream Housing, Venice, Haesung Industrial Development and AMD — for recruiting prospective tenant members without disclosing that they had not yet received approval for their housing construction project plans from the relevant authorities. Three of the companies were found to have advertised "closing soon" even though their recruitment rates were only 28.4% to 33.6%.
The Fair Trade Commission announced on the 26th that it had taken these measures after detecting unfair advertising by the developers.
The four companies recruited members starting in November 2024 using housing promotion centers, internet cafes, blogs, YouTube, flyers and banners. Members paid dues — including down payments and interim payments — in installments, which were used to cover construction costs. Under the terms, members could live as tenants for 10 years after completion and then purchase the apartment through a lease-to-own conversion.
Dream Housing (Dream City) recruited members for a planned development of 1,902 units with two basement levels and 35 stories above ground in the Ssanglim-dong area of Gwangju. The company was found to have both omitted disclosure of its unapproved status and advertised "closing soon." At the time of the violation, detected on June 10 last year, it had recruited 613 members, a recruitment rate of 32.2%. It received a corrective order (including a notification order) and a public disclosure order. Because it failed to comply with a corrective order and public disclosure order issued on February 10 for the same conduct, the company and its representative were referred for prosecution.
Venice (BLOOMiNG) advertised "closing soon" after recruiting 101 of 301 planned units, a rate of 33.6%. Based on the violation detected on October 17 last year, the company received a corrective order (including a notification order) and a public disclosure order, along with a finding on the omission of its unapproved status.
Haesung Industrial Development (Meridian The First) ran the same advertisement even though only 222 of 783 units, or 28.4%, had been recruited, and received a corrective order and a public disclosure order. However, a notification order was not imposed, taking into account that the company received approval for its housing construction project plan on April 29.
AMD (Ilsan The Central, Daewoo Elcru) planned to build 1,508 households in a building with two basement levels and 14 to 29 above-ground floors in Deogi-dong, Ilsanseo-gu, Goyang. It received a corrective order (including a notification order) and a publication order for omitting the fact of non-approval in its ads.
The Fair Trade Commission determined that approval status is information that directly affects whether an apartment can be built and therefore has a significant impact on consumers' property rights. By concealing this, the commission said, the companies misled consumers into believing the projects had already received approval, ruling this a deceptive advertisement under Article 3, Paragraph 1, Item 2 of the Act on Fair Labeling and Advertising.
Joint housing with 30 or more units must receive approval under Article 15 of the Housing Act and Article 27 of its enforcement decree before construction can begin. The Fair Trade Commission ruled that advertising 'closing soon' despite low recruitment rates urged consumers to rush into contracts, constituting false or exaggerated advertising under Article 3, Paragraph 1, Item 1. The fact that the companies advertised renderings and layouts of buildings and units was cited as evidence of potential consumer misunderstanding.
The Special Act on Private Rental Housing was revised on September 8, and starting March 9 next year, this kind of member recruitment will be banned. Rental business operators will have to register both themselves and their private rental apartment projects with the relevant authorities before they can recruit members.
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