[비즈한국] It has been confirmed that Lotte E&C has placed a provisional seizure on the site of the Cheongdam Le-El (Cheongdam Samik reconstruction) apartment complex in Gangnam-gu, Seoul, which was completed last year. The move is a measure to secure a claim worth 86.2 billion won, as the reconstruction association failed to settle construction payments even after completion. The association had attempted to sell reserve units to cover the construction costs, but has been unable to dispose of some of the units despite repeated failed bids and price reductions.
According to the construction industry, Lotte E&C placed a provisional seizure on the Cheongdam Le-El apartment site held by the Cheongdam Samik Apartment Reconstruction Association on the 28th of last month. The intent is to secure 86.25 billion won in unpaid construction costs. The Seoul Central District Court accepted Lotte E&C's application for provisional seizure on the same day after receiving a deposit guarantee insurance policy worth 8.625 billion won.
Cheongdam Le-El is an apartment complex rebuilt from the Cheongdam Samik apartments in Gangnam-gu, Seoul. It was completed in late October last year along the Han River in Cheongdam-dong, consisting of 9 buildings (1,261 units) ranging from 4 basement levels to 35 floors above ground. Lotte E&C was selected as the contractor for the reconstruction project in June 2017 and carried out the construction. About a year before completion, in 2024, the company faced a potential construction halt due to conflicts with the association over construction cost increases.
The background for the delay in settling construction costs lies in the sluggish sale of reserve units. Reserve units are properties left unsold to the public by the reconstruction association to prepare for changes in occupants or litigation. According to the 2024 move-in notice, 28 units out of the total 1,261 units in Cheongdam Le-El were designated as reserve units. The association began selling these units last December, but as bids repeatedly failed, they proceeded to the 10th round of bidding this past September.
Prices were also lowered as sales were delayed. According to the 10th sale notice in September, the minimum bidding prices for the Cheongdam Le-El reserve units were 5.17 billion to 5.225 billion won for three 84㎡ units, and 16.1 billion to 20.33 billion won for four 172~218㎡ penthouse units. The total minimum bid price for the 7 units was 89.235 billion won, which is 4.4 billion won lower than the previous 9th round. The most expensive 218㎡ penthouse was reduced by 2.256 billion won compared to the bid in May.
Lee Sang-won, head of the Cheongdam Samik Apartment Reconstruction Association, stated, "The sale of reserve units was delayed because of a leadership vacuum during the approximately four-month period of acting management following the removal of the previous head in March," adding, "If we sell the reserve units, we will have money left over even after paying for construction." However, he did not disclose the current status of the total reserve unit disposal or the specific sales proceeds.
A Lotte E&C official stated, "The association is supposed to sell the reserve units to pay for construction, but sales are slow because the remaining units are high-priced homes like penthouses," and added, "We have completed construction in accordance with the construction contract, yet we have not been paid. The provisional seizure is not intended to inconvenience the association, but rather to encourage more active efforts in selling the reserve units so that the construction costs can be paid quickly."