[EDITORIALS]Stopping construction fraudIn the wake of alleged fraud involving Goodmorning City, a commercial building planned for the Dongdaemun area, the Ministry of Construction and Transportation drew up measures to prevent similar cases. The ministry will issue a building permit for a commercial building only after a developer secures a site for it. Though the move is belated, the ministry is on the right track. We regret that the government did not change the system earlier. It could have saved thousands of subscribers for outlets in commercial buildings from becoming victims of trickery.
Unlike apartment or dual-purpose buildings, commercial buildings can sell their floor space before construction starts. Some construction firms collect the deposit money even before buying land, let alone starting the building. Even before Goodmorning City, there was an endless queue of fraudulent cases involving commercial buildings. Industry analysts have pointed to systemic flaws.
Of course, it can be questioned whether the government should get involved in commercial investments by individual investors. They should bear the risk of loss on their own. Problems arise when the system permits a developer to attract investors for a project for which not even the land has been purchased, while government authorities look the other way. Because of such loopholes, a swindler can blanket newspapers with overstated advertising claims and use the deposit money he gathers from ordinary people to lobby politicians ― or just stash it away.
As commercial buildings grow ever larger, the number of people whose interests come into conflict also grows. It is difficult for individuals to examine their investment risks, so they must be protected. We recommend that for buildings larger than a certain size, construction companies be required to get government approval before starting out. Another needed change would require, as in apartment construction, that commercial buildings be allowed to be completed even after a contractor goes bankrupt. Individual investors must be careful, but the government must be aware that individual discretion is no substitute for systematic safety measures.