Construction Guarantee (CG) elected President Han Seung-gu of Kyeryong Construction and Industrial Co. as the new chairman of the Standing Committee in a meeting at Construction Hall in Nonhyeon-dong, Gangnam-gu, Seoul, on Aug. 9.
In his inaugural speech, new Chairman Han said, “I’ll do my utmost to reach a consensus and explore rational outcomes by lending an ear to diverse views from cooperative members, the Construction Association of Korea and the Ministry of Land, Infrastructure and Transport (MOLIT).
During the meeting, CG decided to introduce a product to allow guarantees deposit money for offices, essential for the operation of the construction business, to be substituted for CG’s guarantee certificate, as a means of supporting cooperative members’ liquidity.
Under the step, CG cooperative members will be allowed to utilize office rent guarantee money, bound by lessors.
CG Release Guarantee Product Replacing Office Rent Guarantee Money
Construction Guarantee (CG) said on Sept. 14 it released a guarantee product which substitutes for office rent guarantee money.
The new guarantee product guarantees rent security money cooperative members (lessees) pay to rent an office.
When they rent offices, cooperative members are required to make a deposit to lessors money guaranteeing more than one year’s rent and management expenses.
Large amounts of money, varying regional and contract deviation, are tied up during the contract period.
In this regard, CG released a guarantee product in which guarantee certificates are issued instead of cash that cooperative members have deposited by supplementing their credit.
The release of the new product is designed to lessen the financial burden for cooperative members when renting offices.
The product is expected to give a helping hand to cooperative members by expanding liquidity. Lessors’ responses are affirmative. They find it easier to rent offices.
CG’s issuance of a guarantee certificate is to require compensation for overdue rent and management costs, or failure to restore offices to their original status.
In the case cooperative members who rent offices under a monthly contract with guarantee deposit money, CG may issue the new guarantee certificate.
CG can do so if it is assured that leases of the conventional rental contract have no rent in arrears and reach an agreement with lessors.
Cooperative members see guarantee fees according to cooperative members’ respective credit ratings.
CG may provide guarantee amounts equivalent to the whole of rental guarantee deposit in full or in part.
Cooperative members have seen some cases deducted between 20 percent and 50 percent of fees.
The guarantee period is from the issuance date of a guarantee product and the expiry date of a rental contract.
The beneficiaries of the guarantee product are cooperative members who rent offices. The scope of the benefits will be expanded on a gradual basis later, CG said.
A CG official said, “Cooperative members, leases, are required to reach an agreement with lessors to replace rental guarantee money with a guarantee certificate.”
CG’s issuance of a guarantee certificate is a win-win product designed to raise leases’ liquidity and revitalize lessors’ rentals, the official said.
The increasing use of the product in the rental market will ultimately improve rental contract practices based on CG’s reliability, the official added.
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