[Edaily Reporter KIM HYUNG-HWAN ] A dispute continues as tenants of commercial spaces in the Eunma Apartment complex in Daechi-dong, Gangnam-gu, Seoul, are demanding relocation compensation of approximately 100 million won—equivalent to the key money levels from 10 years ago. Although current law does not mandate compensation for business losses or relocation expenses for tenants of commercial spaces undergoing redevelopment, it is common practice to pay relocation compensation due to concerns over project delays. In this regard, some are calling for the government to step in as a mediator to resolve the conflict.

According to the redevelopment industry on the 16th, merchants at the Eunma Commercial Complex have formed an emergency response committee to demand relocation expenses and other compensation. The amount they are demanding is expected to reach approximately 100 million won per store—equivalent to the business transfer fee paid 10 years ago. “We have lived here for 30 years, making this our home,” they stated, adding, “We will stand united and prevail until we receive fair compensation.”

Conflicts over relocation compensation for commercial tenants are occurring across the country. The Namseoul Apartment complex in Singil-dong, Yeongdeungpo-gu, Seoul, is a prime example. At that apartment complex, conflicts persisted over compensation for commercial tenants, leading some merchants to file a lawsuit seeking to invalidate the management and disposal plan. As a result, while voluntary relocation concluded in July 2023, demolition work could not proceed until September 2024. The reconstruction project in the Namsan 4-5 District in Daegu also faced conflict as some tenants demanded compensation; they eventually relocated after receiving consolation payments from the construction company.

The lack of a legal basis is cited as the reason for these ongoing conflicts over relocation expenses. Redevelopment projects are governed by the Urban Renewal Act. Under this Act, land or buildings may be compulsorily acquired for the project, and the Land Compensation Act is applied by analogy during this process. Since this process forces tenants to lose their livelihoods and business bases, the system mandates that tenants be provided with statutory compensation for losses such as housing relocation expenses, moving costs, and business losses.

On the other hand, reconstruction—which involves demolishing and rebuilding existing apartment complexes—is largely a private-sector venture and therefore not subject to the Land Compensation Act. In 2014, the Supreme Court ruled that it was difficult to apply the loss compensation provisions used in redevelopment projects to reconstruction projects.

Consequently, the issue must be resolved through relocation expenses in the form of settlement payments. If the project is delayed, financial costs naturally increase, placing a burden on members in the form of higher contribution payments. It is better to reach an agreement with commercial tenants and offer them a certain level of compensation to encourage them to vacate. An official in the urban renewal industry explained, “From the association’s perspective, it would be best to pay compensation and expedite the construction schedule as much as possible.”

The Eunma Apartment Reconstruction Association maintains that compensation is difficult to provide. The association is proceeding with the project with the goal of completing relocation in the first half of next year, and the commercial tenants must also complete their relocation within the same timeframe. The association argues that it is difficult to pay relocation expenses because current law lacks provisions for financial compensation—such as business interruption compensation or moving expenses—related to relocation in reconstruction projects.

Experts emphasized that the government should step in to act as a mediator between the association and the emergency committee. Seo Jin-hyung, a professor in the Department of Real Estate and Legal Affairs at Kwangwoon University, stated, “While it is difficult to impose mandatory guidelines regarding private property in the absence of a legal basis, the district office or similar authorities should step in to act as mediators,” adding, “This would allow conflicts to be resolved as quickly as possible should problems arise.”