Request and obtain proof of ownership of land
Agency: Property Register
BuildCo must obtain proof of ownership from the Property Register to show that BuildCo has the right to construct a warehouse on the land. The issuance date stated in the Land Registry should be within 3 months prior to the date of submitting the application for a building permit. Once the application for a building permit and the relevant documents are filed with the licensing authority, the authority will forward the design drawing to the relevant regulatory agencies, the fire department and the sewage department. It is possible to obtain proof of ownership (from the Court Registry) immediately after applying over the Internet at www.iros.gov.kr. The fee for issuing certificate of registered items is KRW 1,000 for issuance via internet.
Time and cost: 1 day, KRW 1,000
Purchase National Housing Bonds (NHB)
Agency: Commercial bank
To qualify for a building permit, BuildCo must purchase National Housing Bonds (NHBs). The bonds can be purchased online through commercial bank websites.
The NHB is calculated at a rate ranging from KRW 600.00 to KRW 1,300.00 per sq. m., depending upon the structure of the warehouse. If the warehouse is constructed in steel frame, the rate of KRW 1,300.00 per sq. m. is applied.
BuildCo can either receive the money paid for the NHBs upon maturity or sell them at a discount (the discount rate is variable but has been around 10%). Upon purchase, the bank issues a receipt, which must then be presented to the Building Authorities. The cost is calculated as follows: KRW 1,300.00 x 1300.6 sq. m. = KRW 1,690,780.00. However, many sell the NHBs immediately, which, assuming a discount of 10%, brings the actual cost incurred by the company to KRW 169,078.00.
Time and cost: 0.5 days, KRW 169,078
Request and obtain building permit
Agency: County (Ku) Office of Construction
BuildCo must submit an application for a building permit to the County (Ku) Office of Construction. The application must include:
- The size of construction lot;
- Documentation showing BuildCo’s ownership or the right to use the construction lot; and
- Basic design drawings, which must specify the approximate location of the water pipes, sewage, septic tank, electrical facilities, and telephone lines.
Once the application for the building permit with the relevant documents is filed with the licensing authority, this authority forwards the design drawings to the relevant regulatory agencies (such as the sewerage department and the fire department). Thus, it is not necessary for the company to obtain separate project clearances from these departments.
Under the Article 10 of the new Building Code, anyone who intends to construct a building may opt for a fast-track procedure and apply for an “advance decision regarding building permit” before applying for a building permit. If an advance decision is obtained for the construction, the builder must separately apply for and obtain a building permit for the construction. However, when the advance decision is obtained, the relevant approval for the development or re-characterization of land (such approval is needed in certain zoning areas under several relevant laws) is deemed to be obtained. This effect of the advance decision is valid for 2 years from the date of issuance, before the builder applies for the building permit itself.
In addition, it is possible to submit simultaneous applications for an advance decision and for the traffic and environment impact assessment procedures, and the like, if those procedures are necessary. Accordingly, if the builder obtains an advance decision before applying for the building permit, the time before the construction may be reduced more or less. However, this has not worked well in practice and many companies follow the traditional way.
According to the Standard for Civil Petitions Treatment published by the Korean Government on December 30, 2005, the duration for obtaining a building permit for a two-story, 1,300-square-meter building is estimated to be 3 — 14 days, subject to certain circumstances, including whether the work is performed by an agent (a certified architect). The duration can take a few days longer, as the case may be.
Before construction work begins, the company informs the authority thereof. BuildCo must present a notification application, including:
- A copy of all relevant contract(s) between the relevant parties (owner, construction company, architect, building inspector, etc.)
- The design drawings, which must specify the location of the water pipes, sewage, septic tank, electrical facilities, and telephone lines.
Time and cost: 9 days, KRW 121,500
Hire a certified inspector
Agency: Private Company
A certified inspector conducts inspections throughout the period of construction. If the company does not hire a certified inspector during construction, there is a penalty of up to 2 years’ imprisonment or a fine of up to KRW 10 million. The inspector is independent of the company. The frequency of inspections varies depending on the size and cost of construction. Generally, an inspection takes place if the inspector and the company deem it necessary. However, in some instances, the contract between the company and the inspector contains a clause specifying the frequency of inspection. There must be at least two inspections throughout the construction, during which the construction work does not stop.
The fees for hiring a certified inspector is calculated by multiplying the value of the project by the relevant rate of 1.29%, in accordance with the Regulation for Scope of Architect Services and Fee Standard.
Time and cost: 1 day, KRW 22,247,441
Request water and sewage and occupancy permit inspections certificate
Agency: Public Sewer Management Agency
When installing drainage facilities in a building, the type, size, and other features of the drainage facilities must be reported pursuant to the Sewage Act to the Public Sewer Management Agency. According to the Act’s enforcement provision, the time to complete the inspection should be 14 days. There is no penalty for the authorities if the time line is missed, but they generally meet the deadline.
Time and cost: 1 day, no charge
Request and obtain fire inspection certificate
Agency: Fire Department
When BuildCo applies for an occupancy permit, the fire control facility will ask the Fire Department to inspect the building. The Fire Department will issue an inspection certificate after inspection of the premises. The average waiting time is one week.
Time and cost: 1 day, no charge
Obtain occupancy permit certificate
Agency: County (Ku) Office of Construction
BuildCo must apply for an occupancy permit within 7 days of the completion of construction. The occupancy permit is issued after the fire inspection mentioned in the previous procedure.
Time and cost: 7 days, no charge
Receive final inspection from local government
Agency: Local Government
Time and cost: 1 day, no charge
Obtain connection to water and sewage services
Agency: Korea Water Company
In order to obtain a connection to clean water, BuildCo must apply online through the Office of Waterworks of the Seoul Metropolitan Government’s website. For sewerage, if the warehouse is built near a sewerage terminal disposal plant, BuildCo can connect to the public sewer system, although it must pay a fee as a Dirty Water Originator. The cost and time required depend on the distance between the building and the water and sewerage resources and on the installation method of the building’s facilities.
Time and cost: 7 days, KRW 4,443,000
Register the building with the Court Registry
Agency: Court Registry
An acquisition and the e-revenue stamp tax must be paid within 30 days of receiving the occupancy permit. The acquisition tax is 2.8% of the value of the property without surcharge (3.16% with surcharge) and the stamp tax is KRW 15,000.00 per land parcel.
Once the tax is paid, BuildCo must register the warehouse within 60 days from the inspection completion date.
Time and cost: 4 days, KRW 48,304,020
