On February 4, 2020, certain proposed amendments to the Act on Ownership and Management of Strata Buildings (the “Strata Building Act”) were promulgated into the law (the “Amendments”).  The Amendments will take into effect one year after the date of the promulgation (i.e., from February 5, 2021).

Below are some of the notable changes under the Amendments:

1.    Consent threshold required to alter common use areas lowered

Currently under the Strata Building Act, for structural alternation of common use areas of a strata building, it requires affirmative vote of more than 3/4 of the total number of the strata unit owners and the owners whose units represent more than 3/4 of the total exclusive area of the building as resolved at an owner’s association meeting.  Under the Amendments, the affirmative voting thresholds were relaxed to more than 2/3 of the total number of the strata unit owners and the owners whose units represent more than 2/3 of the total exclusive area of the building.  

Further under the Amendments, for alteration of common use areas to address aging buildings and to take related preventive measures where such alterations could affect the ownership of the unit holders or the scope of their land use right, it requires affirmative vote of more than 4/5 of the total number of the strata unit owners and the owners whose units represent more than 4/5 of the total area of the building.  It appears that this new provision is intended to relax the affirmative voting threshold and promulgate it into the law the unanimous approval standard previously set by a court precedent which required unanimous consent by all strata unit owners when involving alteration of common use areas of a strata building which could affect the ownership and land use right of the unit owners.    

2.    Requirement to report the building manager to the relevant government offices

Under the Amendments, for a strata building having 50 or more units, when a building manager is appointed, the building manager must report its appointment to the relevant government offices (such as the “gu” district office).  It appears that the amendment is intended to improve the transparency of the strata building management and administrative supervision by the authorities. 

3.    Requirement to conduct financial audit on management of strata building

Under the Amendments, for a strata building having 150 units or more, the building must undergo financial audits by an auditor at least once every year, and the auditor must report the outcome of the audit to the strata unit owners and the unit occupants.  However, if more than 2/3 of the total number of the strata unit owners and the owners whose units represent more than 2/3 of the total exclusive area of the building resolve at an owners’ associating meeting not to receive such financial audit for any given year, the financial audit can be omitted for the concerned year.