Corruption rife in management of apartments

When Mr. Shin found an opening as manager of an apartment complex in Gyeonggi late last year, the head of the residents committee offered him a quid-pro-quo. The committee head would give him the job - if Shin lent him 10 million won ($9,394).

Shin, a pseudonym, took the deal and the job.

A few months later when the committee head asked to borrow more money, Shin knew he had to come up with it. But short on cash, he had to borrow 4.5 million won from a bank.

Last September, Shin’s one-year contract expired, and he was out of a job.

He was never repaid his money either.

This anecdote was told by Kim Il-am, a counselor at the Korea Housing Managers Association, who claims he heard the details from the manager himself.

“He said he’d forget about getting his money back and just find another job,” said Kim. Getting the authorities involved would only backfire: Shin would probably never get another manager’s job at an apartment building.

“They’re simply afraid,” Kim said. There are more than 50,000 housing managers in Korea and they compete for 15,000 available jobs. With competition like that, it’s pretty common to have to grease some wheels to get a position.

The residents’ committees at buildings have the option of choosing their managers from a housing management company or to hire a freelancer, of which there are many.

On the flip side, managers who have bribed their way into the jobs often try to reclaim the money by embezzling from the apartment building by inflating or inventing maintenance costs.

“Head management officers who bribe their way up the ladder are prone to misappropriate residents’ maintenance fees or conspire with the residents’ committee to find a way to get their money back,” said Choi Yong-hwa, an architectural engineering professor of Kyonggi University in Suwon, Gyeonggi, and a member of the Research Institute of Anti-Fraud and Anti-Corruption.

In a country where apartment owners fear their property price might drop if their address ends up in local newspaper headlines, some residents keep their mouths shut even after finding out about the dirty deals.

Song Ju-yul, head of a group to eradicate corruption in the apartment complex industry, argues that people should be aware that prices could fall more drastically if corruption is allowed to continue and get exposed later.

But many people in apartment complexes are indifferent to administration matters. Voter turnouts for residents committee elections average around 10 percent.

In order to raise that number, accounting professor Lee Byung-chul of Kyonggi University advises committees to allow early voting or e-voting.

An apartment complex in Daejeon reportedly saw its turnout surpass 50 percent for the first time last year when they put the voting process on the Internet.

Song said the government should be tougher on irregularities in apartment complexes and establish a government office to deal with the issue.

“The Secret Beneath Apartment Maintenance Bills” (2014), co-written by Kim Yoon-hyeong and Kim Ji-seop, provides more practical advice for wiping out corruption. It suggests that all residents sign up for their apartment’s website or blog because residents’ committees get “the jitters just by seeing the number of views rise.”

Committee members “should neither be an enemy nor a friend” to the housing management company because cooperation becomes difficult when they are hostile, the book says, and corruption is possible when they are too close.

BY AHN HYO-SUNG AND YOON JUNG-MIN [selee@joongang.co.kr]