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INCHEON METROPOLITAN ORDINANCE ON THE MANAGEMENT OF PUBLIC PROPERTY

CHAPTER Ⅰ GENERAL PROVISIONS

Article 1 (Purpose) The purpose of this Ordinance is to ensure the systematization and efficiency of affairs concerning the preservation and management of public property belonging to the Incheon Metropolitan City as well as to contribute to the sound development of local finance, by providing for matters necessary to do so.

Article 2 (Responsibility for Management) (1) The Mayor of the Incheon Metropolitan City (hereinafter referred to as the "Mayor") shall efficiently manage all the public property belonging thereto.

(2) The Mayor shall appoint an officer exercising the overall control of public property and may appoint other public officials responsible for the management thereof under his/her control according to the use or purpose of the public property.

(3) Necessary matters concerning the appointment of an officer exercising the overall control of public property and other public officials responsible for the management thereof under paragraph (2), shall be provided for by rule of the Incheon Metropolitan City.

Article 3 (Delegation of Affairs concerning Management) (1) The Mayor may, if deemed necessary, delegate part of the affairs concerning the management and disposal of property belonging to the Incheon Metropolitan City to the head of any Gu having jurisdiction over the place in which that

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property is situated.

Article 4 Deleted.

Article 5 (Entrustment of Management of Public Facilities) (1) The Mayor may, if necessary for the efficient management of public facilities under Article 135 (1) of the Local Autonomy Act and Article 109 (2) of the Local Finance Act (hereinafter referred to as the "Act"), entrust the management of the said public facilities to any relevant juristic person, organization or individual.

(2) If an officer exercising the overall control of property entrusts the management of public facilities to any other person under paragraph (1) of this Article, an agreement on such entrustment shall include the scope of public facilities subject to the permission for the use and proceeds under Article 84-2 of the Enforcement Decree of the Local Finance Act (hereinafter referred to as the "Decree "), the period of such permission, the annual use fees, the methods of payment thereof, and so on.

(3) An officer exercising the overall control of property shall impose and collect the use fees for public facilities which a person entrusted with the management thereof under paragraph (1) of this Article directly uses for operating profits or which are subleased to and used by any third party under Article 92 of the Decree at the same time as such entrustment.

(4) If a person entrusted with the management of public facilities under paragraph (3) pays the use fees for property with respect to which he/she obtains permission for the use or profits and subleases that property to third parties, he/she may impose any certain fee and management expense determined by him/her on them and collect that fee and management

(3)

expense from them. In this case, the fee and management expense collected by him/her shall be his/her income.

Article 6 (Payment of Reward for Report on Concealed Property) (1) A person (hereinafter referred to as the "reporter") who finds and reports any concealed public property (hereinafter referred to as the "concealed property") may, in accordance with Article 88 of the Local Finance Act, be paid a reward as follows:

1. The amount of the reward shall be the amount of money equivalent to 20/100 of the value of the concealed property as calculated on the basis of the statutory standard price of immovable property: Provided, That the amount of the reward shall be one million won if it exceeds one million won; and

2. The reward may be paid after the concealed property is determined as public property, which is registered, and if there are two or more reporters, the initial reporter shall be subject to the payment of the said reward.

(2) The reporter shall submit a report of the concealed property to the Mayor.

(3) The identity of a reporter of concealed property or contents of report thereon shall not be made public or disclosed to other persons.

(4) If a person having any special relationship who falls under Article 107 of the Decree reports the concealed property, a reward shall not be paid to him/her: Provided, That if the reporter who is deemed to be certain to acquire such reported property in good faith abandons the purchase thereof, the reward may be paid to him/her.

Article 7 (Public Property Deliberation Council) (1) The Public Property

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Deliberation Council of the Incheon Metropolitan City (hereinafter referred to as the "Deliberation Council") established under Article 78 of the Local Finance Act shall be composed of seventeen or less members, including one Chairperson and one Vice Chairperson.

(2) The Deliberation Council shall deliberate on the following matters:

1. Matters concerning the acquisition and disposal of property;

2. Matters concerning the confirmation of buildings and other facilities the construction work of which is about fifty or more percent finished under Article 78 (2) of the Decree;

3. Matters concerning the alteration to the intended use or purpose of administrative property or preservation property which is being used for any other purpose and the disuse thereof; and

4. Other matters concerning public property which are deemed important by an officer exercising the overall control of property.

(3) With respect to the matters falling under the following subparagraphs from among those to be deliberated on under paragraph (3), the deliberation of the Deliberation Council may be omitted:

1. Acquisition and disposal of property falling under Article 15-3 (2) of the Enforcement Decree of the Local Autonomy Act and Article 84 (3) of the Decree;

2. Land the area of which is less than the minimum partition area provided in under Article 49 (1) of the Building Act;

3. Acquisition and disposal of property whose value entered in the register is not more than ten million won (not more than thirty million won in a Special Metropolitan City and other Metropolitan Cities); and

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4. Alteration to the intended use or purpose of administrative property or preservation property falling under any of the following items and the disuse thereof:

(a) Land (including buildings situated thereon; hereafter the same shall apply in this subparagraph) situated in a Special Metropolitan City and other Metropolitan Cities which is not more than three hundred and thirty square meters in area;

(b) Land situated in Sis which is not more than six hundred and sixty square meters in area; and

(c) Land situated in Guns (including those of Metropolitan Cities) which is not more than nine hundred and ninety square meters in area.

Article 8 Deleted.

Article 9 (Collectivization of Property) Scattered property the management of which is inefficient shall, if possible, be disposed of and be in a group unless there is any special necessity not to do so, and thereby the management expenses shall be retrenched.

Article 10 (Grasp of Increase or Decrease and Present Amount of Property) An officer exercising the overall control of property shall, not later than January 31 every year, grasp the increase or decrease and present amount of public property in the preceding year to make the financial operation condition public under Article 118-3 of the Local Finance Act.

CHAPTER Ⅱ MANAGEMENT OF ADMINISTRATIVE PROPERTY

Article 11 (Management and Disposal) A public official responsible for the

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management shall meet administrative demand by carrying out the thorough maintenance and repair of administrative property and preservation property managed by him/her as well as by improving the environment.

Article 12 (Restriction of Permission for Use or Profit) (1) The permission for use of administrative property or preservation property shall require any circumspective examination of the purpose of such use, and it shall be obvious that there is no preemption to that property at the time of such permission.

(2) The use of or profit from administrative property or preservation property shall not be permitted if it falls under any of the following subparagraphs:

1. In a case where it is deemed that the disuse and disposal of the said administrative property or preservation property are advantageous;

2. Deleted; and

3. In a case where it is likely that the use of administrative property is hindered due to any alteration to the structure, shape or quality thereof, the construction or work of facilities, and so on.

Article 13 (Period of Permission for Use or Profit) (1) The period of permission for the use of or profit from administrative property or preservation property shall be three years or less: Provided, That if there is any necessity to permit any further use due to unavoidable circumstances, the further use shall, not later than one month prior to the expiration of the former permission, be renewedly permitted for a period of three or less years.

(2) A period of the gratuitous use of the property the donation of which is

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accepted shall be conformed to Article 83 of the Decree and shall be reckoned from the date of such acceptance.

Article 14 (Permission for Use or Profit) The permission for use of administrative property or preservation property shall require any circumspective examination of the purpose of such use,

1. Purpose of such use 2. Period of Use 3. Use fees

4. Methods of payment 5. Deleted.

6. Deleted.

7. Preservation duty of property the use and proceeds of which is permitted;

8. User's charge of impositions with respect to property the use and proceeds of which is permitted; and

9. Permission conditions.

Article 15 (Keeping of Register of Permission for Use or Profit) An officer exercising the overall control of property shall keep and maintain a register of permission for the use of or profit from administrative property or preservation property and make an entry in that register.

CHAPTER Ⅲ MANAGEMENT OF MISCELLANEOUS PROPERTY

Article 16 (Preservation of Property) The property which is necessary for the public interest and from which the increase of financial revenue is expected shall be continuously preserved and managed.

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Article 17 Deleted.

Article 18 (Grasp of Existing Circumstances of Miscellaneous Property) (1) In order to manage and dispose of miscellaneous property reasonably, the matters falling under the following subparagraphs shall be grasped:

1. The property deemed worth securing for utilization as an article used for the administrative purpose in the future;

2. The property situated in a urban management planning zone, housing redevelopment zone or urban environment maintenance and improvement zone;

3. Trifling property the preservation of which is of no value;

4. The property the utilization of which is impossible because it is situated in any other person's land; and

5. The property the ownership of which is in dispute.

(2) The list of property falling under paragraph (1) shall be separately prepared and kept, its acquisition and lease shall be specially considered, and it shall be thoroughly managed.

Article 19 (Exclusion of Preemptive Right) If miscellaneous property is leased, it shall be clearly stated in a written agreement that the lessee's preemption to that leased property is not recognized and thereby the assertion of any right other than a right to the use shall be excluded for a period of such lease.

Article 19-2 (Scope of Foreign-invested Enterprise) The term

"foreign-invested enterprise" or "foreign investment environment improvement facility operator" (hereinafter referred to as the

"foreign-invested enterprise and so on") as used in this Ordinance has the

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same meaning as provided in Article 2 (1) 6 and 6-2 of the Foreign Investment Promotion Act or Article 2 (5) of the Enforcement Decree thereof.

Article 19-3 (Public Property and so on Which May Be Leased or Sold to Foreign-invested Enterprise and so on) Public property which may be leased or sold to a foreign-invested enterprise and so on under Article 20 shall be as follows:

1. Public property which a local government obtains from all or part of a national industrial complex under Article 38-4 (2) of the Industrial Sites and Development Act;

2. Public property which is situated in a local industrial complex or agricultural and industrial complex provided in Article 7 or 8 of the Industrial Sites and Development Act;

3. Public property which is situated in an area where the establishment of an apartment house-type factory is approved under Article 2 of the Industrial Cluster Development and Factory Establishment Act;

4. Public property which is situated in a foreign investment area designated by the Mayor under Article 18 of the Foreign Investment Promotion Act;

5. Public property which is situated in an industrial complex according to special purpose and industry developed by a local government; and

6. Any other public property which a local government deems necessary for the inducement of foreign investment.

Article 20 Deleted.

Article 21 (Collection of Rent and Measures for Recovery of Leased Property) (1) With respect to leased property which is not used for such lease or the

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value of which is deemed to be decreased by neglecting the management, an agreement on the lease shall be terminated under Article 94 of the Decree and necessary measures such as the recovery of that property shall be taken.

(2) If property gratuitously leased to any state organ or other local governments is not used directly for any public or official purpose or for public services or is used for their own profits, the rent on that property shall be collected or measures provided in paragraph (1) shall be taken.

(3) In consultation with a state organ, the property which the state organ takes illegal possession of and is using and the recovery of which is de facto impossible due to permanent facilities and so on, shall be exchanged for another or sold, or the rent on that property shall be collected.

Article 22 (Payment of Proceeds from Sale in Installments and so on) (1) In cases falling under the following subparagraphs, proceeds from the sale of miscellaneous property as well as the annual interest of four percent of the remainder of such proceeds may be paid in installments for a period of ten or less years under the proviso of Article 100 (1) of the Decree:

1. In case that property to be directly used by a local government for any official or public purpose is sold to any other local government;

2. In case that property to be directly used by an office of education as a site for a school is sold to any other office of education;

3. Deleted;

4. Deleted;

5. In case that the property is sold under Article 95 (2) 8 of the Decree;

6. In case that the land which is not more than ninety square meters in

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area is sold to a recipient of benefits referred to in subparagraph 2 of Article 2 of the National Basic Living Security Act;

7. In case that the land necessary for an apartment house-type factory under Article 2 of the Industrial Cluster Development and Factory Establishment Act, a site for an industrial complex development project under Article 27 of the Industrial Sites and Development Act, a site for a factory of a small and medium business operator under Article 14 of the Act on Special Measures for the Deregulation of Corporate Activities, an agricultural and industrial complex developed by a local government, and a site for a factory transferred to any place falling under the jurisdiction of the local government, is sold to the business operators concerned; and 8. In case that the property is sold to any person who intends to establish

facilities for the welfare of disabled persons under the Welfare of Disabled Persons Act.

(2) In cases falling under the following subparagraphs, proceeds from the sale of miscellaneous property as well as the annual interest of six percent of the remainder of such proceeds may be paid in installments for a period of ten or less years under the proviso of Article 100 (1) of the Decree:

(3) In cases falling under the following subparagraphs, proceeds from the sale of miscellaneous property as well as the annual interest of six percent of the remainder of such proceeds may be paid in installments for a period of five or less years under the proviso of Article 100 (1) of the Decree:

1. In case that the property is sold under Article 95 (2) 2, 6, 10, 11 or 16 of the Decree;

2. In case that the property to be directly used by the State for any official

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or public purpose is sold to the State;

3. In case that the Mayor separately determines the date of delivery of sold property and the period of payment of proceeds from such sale or postpones such date at the time of the conclusion of the agreement thereon in order that he/she may continuously take possession of that property and use it for any other prescribed period by necessity; and

4. In case that the property with respect to which the lump-sum payment of all the proceeds from the sale is deemed difficult by the Mayor is sold for support for public services.

(4) If the miscellaneous property is necessary to accomplish the business purpose of a foreign-invested enterprise and so on, proceeds from the sale of the said miscellaneous property as well as the annual interest of four percent of the remainder of such proceeds may be paid in installments for a period of twenty or less years under Article 13 (5) of the Foreign Investment Promotion Act.

Article 23 (Rate of Rent or Use Fee) (1) The rate of annual rent or use fee for the property under Article 92 of the Decree shall be not less than 50/1000 of the evaluation price of the said property: Provided, That the rate of annual rent or use fee for the property used for any official or public purpose or for a settlement improvement project and that used for foreign diplomatic establishments in the Republic of Korea shall respectively be not less than 25/1000 and 40/1000 of the evaluation price of such property.

(2) The rent for the farmland used by a de facto cultivator for cultivation shall be not less than 10/1000 of the evaluation price of such farmland.

(3) The rate of annual rent or use fee for the property used for the mining

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industry or quarrying is not less than 50/1000 of the evaluation price of such property: Provided, That in case of a zone which is not used as forest land in the future due to any change of the shape of land, the price for standing trees or forest products on the land shall be collected in addition to the rent or use fee.

(4) The rate of annual rent or use fee for the property provided in any of the following subparagraphs shall be not less than 40/1000 of the evaluation price of such property:

1. The property in facilities established according to the urban planning under subparagraph 7 of Article 2 of the National Land Planning and Utilization Act; or

2. The property in an office building which is necessary for the public interest or the welfare of public officials.

(5) If the lease or use of public forest land is permitted, the provisions of Article 62 (1) of the Enforcement Decree of the Forestry Act shall apply mutatis mutandis to the rate of rent or use fee for the said public forest land.

(6) The rate of annual rent or use fee for the land occupied by a building used for residence which does not belong to a local government (excluding a building newly constructed without permission as provided in Article 2 of the Incheon Metropolitan Ordinance on the Maintenance and Improvement of Urban and Residential Environment) shall be not less than 25/1000 of the evaluation price of such land: Provided, That the rate of annual rent or use fee shall, in case of the occupied land in a housing redevelopment zone designated under Article 4 of the Act on the Maintenance and Improvement

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of Urban Areas and Dwelling Conditions for Residents and a recipient of benefits referred to in subparagraph 2 of Article 2 of the National Basic Living Security Act, shall respectively be not less than 15/1000 and 10/1000 of the evaluation price of such land.

(7) Deleted.

(8) The rate of annual rent or use fee for the public property which a foreign-invested enterprise uses because it is necessary to accomplish the business purpose under Article 13 (4) of the Foreign Investment Promotion Act shall be not less than 10/1000 of the evaluation price of such public property.

(9) The rate of rent or use fee for the public property which is necessary for the development or establishment of complexes used exclusively by venture businesses or facilities for collective placement thereof under Article 19 (1) of the Act on Special Measures for the Promotion of Venture Businesses and which is used by a person carrying out a development project of such complexes, establishing such facilities or obtaining the designation of other technology research collectivization complexes, or that which is managed by a local government for support for establishment of venture businesses and which is used by a person establishing them or any other individual, organization, corporation or institution concerned in such support may be not less than 10/1000 of the evaluation price of such public property.

Article 23-2 (Special Case concerning Rent and so on) (1) If, in having any other person take possession of public property, leasing it or permitting the use of or profit from that property for two or more consecutive years, the annual rent therefor calculated under Article 23 (including the use fee and

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indemnity; hereafter the same shall apply in this Article) is increased by ten or more percent in comparison with that which was paid or payable in the preceding year, the rent increase rate in the relevant year shall be as follows notwithstanding the provisions of Article 23: Provided, That this shall not apply to the permission for use of or profit from the public property (excluding farmland) or the lease thereof for profit:

Increase Rate Rent Increase Rate

10 or more percent but less than 20 percent 20 or more percent but less than 50 percent 50 or more percent but less than 100 percent 100 or more percent but less than 200 percent 200 or more percent but less than 500 percent not less than 500 percent

10 percent + (increase rate - 10 percent) 13 percent + (increase rate - 20 percent) 16 percent + (increase rate - 50 percent) 19 percent + (increase rate - 100 percen 22 percent + (increase rate - 200 percen 25 percent + (increase rate - 500 percen Article 23-3 (Reduction of or Exemption from Rent or Use Fee) (1) If the

public property is leased to a foreign-invested enterprise for any business purpose thereof or the use of or profit from that property is permitted under Article 13 (8) of the Foreign Investment Promotion Act and Article 92-2 of the Decree, the rate of reduction of or exemption from a fee for such lease or use shall be as follows:

1. Reduction of or exemption from the whole of the said fee: business falling under any of the following items:

(a) Business provided in Article 121-2 (1) of the Restriction of Special Taxation Act in which foreigners invest one million or more US dollars;

(b) Business in which foreigners invest twenty million or more US dollars;

(c) Business in which three hundred or more persons are engaged a day on the average;

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(d) Foreign-invested business in which fifty or more percent of the gross production is exported and the procurement rate of Korean parts and raw or subsidiary materials is one hundred percent;

(e) Foreign-invested business in which one hundred percent of the gross production is exported;

(f) Business falling under any of items (a) through (e) which is conducted by an existing foreign-invested corporation transferring from any other area to an area falling under the jurisdiction of the Incheon Metropolitan City; or (g) Business falling under any of items (a) through (e) for which an

existing foreign-invested corporation builds more factories under the Industrial Cluster Development and Factory Establishment Act;

2. Reduction of or exemption from seventy-five percent of the said fee:

business falling under any of the following items:

(a) Business in which foreigners invest not less than ten million US dollars but less than twenty million US dollars;

(b) Business in which not less than two hundred but less than three hundred persons are engaged a day on the average;

(c) Foreign-invested business in which fifty or more percent of the gross production is exported and the procurement rate of Korean parts and raw or subsidiary materials is not less than seventy-five percent but less than one hundred percent;

(d) Foreign-invested business in which not less than seventy-five but less than one hundred percent of the gross production is exported;

(e) Business falling under any of items (a) through (d) which is conducted by an existing foreign-invested corporation transferring from any other area

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to an area falling under the jurisdiction of the Incheon Metropolitan City; or (f) Business falling under any of items (a) through (d) for which an

existing foreign-invested corporation builds more factories under the Industrial Cluster Development and Factory Establishment Act;

3. Reduction of or exemption from fifty percent of the said fee: business falling under any of the following items:

(a) Business in which foreigners invest not less than five million US dollars but less than ten million US dollars;

(b) Business in which not less than one hundred but less than two hundred persons are engaged a day on the average;

(c) Foreign-invested business in which fifty or more percent of the gross production is exported and the procurement rate of Korean parts and raw or subsidiary materials is not less than fifty percent but less than seventy-five percent;

(d) Foreign-invested business in which not less than fifty but less than seventy-five percent of the gross production is exported;

(e) Business falling under any of items (a) through (d) which is conducted by an existing foreign-invested corporation transferring from any other area to an area falling under the jurisdiction of the Incheon Metropolitan City;

(f) Business falling under any of items (a) through (d) for which an existing foreign-invested corporation builds more factories under the Industrial Cluster Development and Factory Establishment Act; or

(g) Business conducted by a foreign-invested enterprise to which the public property in a complex or apartment house-type factory provided in subparagraphs 1 through 3 of Article 20-2 is leased or sold.

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(2) If the public property is leased to a person intending to operate a school for foreigners or the use of or profit from that property is permitted under Article 13 (8) of the Foreign Investment Promotion Act, the rate of reduction of or exemption from a fee for such lease or use shall be as follows:

1. Reduction of or exemption from the whole of the said fee: a school for foreigners which has an enrollment of three hundred or more students;

2. Reduction of or exemption from seventy-five percent of the said fee: a school for foreigners which has an enrollment of not less than one hundred students but less than three hundred students; or

3. Reduction of or exemption from fifty percent of the said fee: a school for foreigners which has an enrollment of less than one hundred students.

Article 24 (Fee for Gathering of Soil or Stone and so on) (1) With respect to the land which is leased or permitted to be used for gathering of soil or stone under Article 23 (3), a fee for such gathering shall, in addition to that for such lease or use, be collected and shall be 5/100 of the amount of money calculated by multiplying the permissible gathering quantity by the market price per cubic meter of the rough stone in question in the relevant year.

(2) The term "market price for the rough stone in question" as used in paragraph (1) means the market price for the rough stone in question taken out of its place of origin at the time of the transaction and shall be determined on the basis of the size of that which is produced the most.

(3) If the price for soil or stone under paragraph (2) is determined, the report on price evaluation which is any material for the determination of the

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prearranged price shall be prepared.

(4) The report on price evaluation under paragraph (3) shall include an expert report prepared by an appraisal or assessment institution, a report on market price prepared by any other relevant specialized institution, organization composed of business operators or end user, and other reference documents relating to that evaluation.

(5) Notwithstanding the provisions of paragraph (1), the Mayor may separately determine the rate of the fee for gathering of soil or stone in which he/she deems that there is any necessity to collect 5/100 or more thereof taking into account the cost of production of soil or stone according to its classification and purpose of use.

Article 25 (Standards for Calculation of Rent on Building) (1) If a building is leased, the standards for calculation of rent thereon shall be as follows:

1. If the whole of the said building is leased, the evaluation amount thereof shall be the amount of money calculated by adding the evaluation amount of the building and that of a site therefor. In this case, the evaluation amount of such site shall be calculated on the basis of the floor space of the building and any other land used exclusively by users of the building, and on the basis of the floor space given by calculating the present building coverage ratio under the Building Act in reverse if the calculation of the exclusively-used area is impossible due to the obscurity of the boundary (hereafter the term "the evaluation amount of the site" means the amount of money calculated by the same method in this Article);

2. If part of the said building is leased, the evaluation amount of the building and that of a site therefor shall be determined on the basis of the

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evaluation amount of the area used exclusively by a person to whom the said part is leased and that which he/she shares with other persons. In this case, the area shared with other persons shall be calculated by the following formula;

the total area which a person to whom part of a building is leased shares with other persons (the total area of any floor which a person to whom a building is leased shares with other persons, in case of the building) × the area used exclusively by him/her ÷ the total area used exclusively by him/her and other such persons (the total area of any floor used exclusively by a person to whom a building is leased and other persons, in case of the building);

3. If a two-storied building is leased by each floor thereof under subparagraph 1 or 2, the evaluation amount thereof shall be the amount of money calculated by adding the evaluation amount of that building by any other amount of money referred to in the following items:

(a) 2/3 of the evaluation amount of the site for the building, in case of the first floor;

(b) 1/3 of the evaluation amount of the site for the building, in case of the second floor; and

(c) The provisions of subparagraph 4 shall apply to the basement;

4. If a three-storied or higher building is leased by each floor thereof under subparagraph 1 or 2, the evaluation amount thereof shall be the amount of money calculated by adding the evaluation amount of that building by any other amount of money referred to in the following items:

(a) 1/2 of the evaluation amount of the site for the building, in case of the

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first floor;

(b) 1/3 of the evaluation amount of the site for the building, in case of the second floor;

(c) 1/4 of the evaluation amount of the site for the building, in case of the third floor;

(d) 1/5 of the evaluation amount of the site for the building, in case of the fourth floor or higher;

(e) 1/3 of the evaluation amount of the site for the building, in case of the first basement;

(f) 1/4 of the evaluation amount of the site for the building, in case of the second basement; and

(g) 1/5 of the evaluation amount of the site for the building, in case of the third basement or lower;

5. If an apartment house-type factory built by the Incheon Metropolitan City is leased, the evaluation amount thereof shall be the evaluation amount of its building and that of a site proportionate to the area of each factory belonging to such apartment house-type factory;

6. The evaluation amount of an underground detached building shall be the amount of money calculated by adding the evaluation amount of that building by any other amount of money referred to in the following items:

(a) 1/2 of the evaluation amount of the site for the building, in case of the first basement;

(b) 1/3 of the evaluation amount of the site for the building, in case of the second basement; and

(c) 1/4 of the evaluation amount of the site for the building, in case of the

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third basement or lower;

7. If it is deemed that the calculation of the shared area of a leased building is unreasonable due to any special circumstance of that building, the provisions of subparagraph 2 may not apply. In this case, a report on the calculation of rent thereon shall include any specified documentary evidence relating to matters deemed so unreasonable and the standards for the calculation of such shared area;

(2) The rent on the land occupied by a private building for commercial use with two or more floors above or two or more below the ground may be calculated by applying the provisions of paragraph (1) mutatis mutandis, and the rent on the land occupied by a private building for residential use shall be calculated on the basis of the ratio of the area given by dividing any other area in use (including the shared area) into the total site area.

Article 25-2 (Grant of Permission for Use or Profit and Lease under Condition That Security Deposits Shall Be Paid) (1) The permission for use of or profit from the public property provided in any of the following subparagraphs or the lease on such public property may, under condition that the security deposit therefor shall be paid, be granted or given under Article 100-3 (2) of the Decree:

1. Necessary property for the promotion of utilization of large-scale public complex facilities established for public good and profitability; or

2. Necessary property for the promotion of utilization of any other property (limited to the property including buildings and other structures) created by the operation of any profitable business.

(2) The property provided in paragraph (1) may be leased or permitted to be

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used or to profit under condition that the security deposit shall be paid, only if:

1. it is more profitable to the Incheon Metropolitan City than the receipt of the rent or use fee in the utilization of the said property to do so;

2. it is unavoidably necessary for the competition with neighboring private facilities to do so; and

3. there is any other reason equivalent to that which falls under subparagraph 1 or 2.

(3) The security deposit under paragraph (1) or (2) shall be not less than the amount of money given by making a calculation in reverse so that interest on one-year time deposits from the Seoul Treasury Bank may be equivalent to the use fee or rent provided in Article 92 of the Decree.

(4) The security deposit collected under paragraph (3) of this Article shall be managed in cash other than the revenue and expenditure under Article 74 (1) of the Decree and such management shall be followed by referring to the practice of that of the guaranty money under subparagraph 1 of Article 68 of the Incheon Metropolitan City Rules on Finance and Accounting:

Provided, That interest on the security deposit shall be revenue of the Incheon Metropolitan City.

(5) If a period of the permission for use or profit or that of the lease expires, or such permission or lease is revoked or terminated in the middle thereof, the security deposit shall be repaid.

Article 26 (Payment Period of Rent and so on) (1) The payment period of the rent or use fee shall be within sixty days from the date of agreement if the period of lease or permission for use or profit is not more than one

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year or from the date corresponding to the said date of agreement in the relevant year if not less than one year.

(2) Notwithstanding the provisions of paragraph (1), the payment period of the rent or use fee which has already been or may be imposed shall, if deemed particularly necessary due to any natural disaster or other accidents, be extended for any other fixed period of time or determined separately.

Article 27 (Use of Rent) The expenses for the maintenance and management of property managed by a person entrusted with the management of public facilities shall be preferentially appropriated by the proceeds from rent (including use fees and indemnities).

Article 28 (Rate of Arrearage Charge for Rent and so on) (1) If a person obliged to pay the rent, use fee, proceeds from sale, indemnities or exchange difference fails to do so within the period of such payment, the Mayor shall collect an arrearage charge for the amount of money payable (excluding interest on installments in case of the payment in installments) under Article 100 (6) through (8) of the Decree: Provided, That the rate of an arrearage charge for indemnities for the land in a housing redevelopment zone designated under Article 4 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents or proceeds from sale of that land shall be ten percent per annum.

(2) In case that the land is leased to a recipient of benefits under the proviso of Article 23 (6), the Mayor may, if necessary, reduce interest on any arrearage or exempt the said recipient therefrom.

(3) The Mayor may, if deemed particularly necessary due to any natural disaster or other accidents, grant the reduction of or exemption from

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arrearage interest on the rent or use fee which has already been or may be imposed, for a period of time fixed by him/her.

Article 28-2 (Hearings on Indemnities and so on ) (1) If it is intended that indemnities under Article 105 (1) of the Decree shall be imposed and collected, a person taking possession of the public property in question shall, in advance, be given notice of such imposition and collection in the form provided by rule of the Incheon Metropolitan City.

(2) A person taking possession of the public property in question who has an objection to an advance notice of the imposition and collection of indemnities under paragraph (1) may, in writing, present his/her opinion in the form provided by rule of the Incheon Metropolitan City.

(3) If A person who takes possession of the public property in question without permission intends to pay indemnities in installments under Article 105 (1) of the Decree, he/she shall submit a written application for payment in installments prepared in accordance with the form provided by rule of the Incheon Metropolitan City.

Article 29 (Keeping of Lease Arrangement Book) (1) A public official responsible for the management of property shall keep and arrange a leased property arrangement book in order.

(2) The following matters shall be specified in an arrangement book referred to in paragraph (1):

1. Status of leased property (classification between entries in a book and status of leased property);

2. Date of a lease agreement;

3. Full name and address of a person to whom property is leased;

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4. Period of lease;

5. Price for property;

6. Rate of rent;

7. Rent;

8. Payment date of rent;

9. Details of renewal of an agreement; and 10. Other necessary matters.

Article 30 (Written Lease Agreement) If a lease agreement is concluded, a written lease agreement shall be prepared and kept and the public property shall be thoroughly managed even though gratuitous.

Article 31 (Investigation of De Facto State) (1) A public official managing the public property shall investigate the status of leased property once or more every year.

(2) If the status of leased property is investigated under paragraph (1), the following matters shall be investigated:

1. Management state of leased property;

2. Whether or not to receive rent;

3. Whether or not to sublease, manage or dispose of the leased property;

4. Whether or not to use the lease property in conformity with the purpose of such lease;

5. Whether or not to construct or extend a building without permission and establish permanent facilities in lease property and to alter its original condition; and

6. Other necessary matters.

(3) If there are matters subject to the correction as a result of investigation

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under paragraph (1), necessary measures, such as the correction according to a prepared plan for those measures, shall be taken.

Article 31-2 (Classification of Trust) In case of leaving miscellaneous property in trust under Article 102-5 of the Decree, such trust shall be classified into immovable property management trust, immovable property disposal trust and land trust (classified into lease-type land trust and sale-type land trust).

CHAPTER Ⅳ MANAGEMENT OF PUBLIC FOREST LAND

Article 32 (Management of Public Forest Land) The public forest land shall be planted with such trees capable of yielding profits as grow slowly, which shall contribute to the expansion of local finance.

Article 33 (Restriction of Disposal) The public forest land shall be disposed of only if it is deemed that such disposal is necessary to accomplish any public purpose such as reclamation and so on, but the economical efficiency, the possibility of future utilization and so on shall be examined carefully.

Article 34 Deleted.

Article 35 Deleted.

Article 35-2 (Development of Profit-Sharing Forest) The provisions of the Forestry Act concerning profit-sharing forest shall apply mutatis mutandis to the development of profit-sharing forest under Article 102-2 of the Decree.

Article 36 Deleted.

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CHAPTER Ⅴ ACQUISITION OR DISPOSAL OF PUBLIC PROPERTY

Article 37 (Plan for Management of Public Property) (1) In accordance with Article 77 of the Local Finance Act, the Mayor shall prepare a plan for the management of public property, which shall be resolved on by the Seoul Metropolitan Council every year. The same shall apply to any modification of that plan.

(2) Deleted.

(3) Deleted.

(4) A plan for the management of public property provided in paragraph (1) shall be prepared by a bureau or division taking exclusive charge of such management: Provided, That a plan for the management of property subject to special accounts may, in cooperation with that bureau or division, be prepared by any other bureau or division taking exclusive charge of the management of said special accounts. <Amended by Ordinance No. 3545, Jan. 15, 1999>

Article 38 Deleted.

Article 39 (Methods of Preparation of Plan for Management of Public Property) The methods of preparation of a plan for the management of public property under Article 37 shall be provided by rule of the Incheon Metropolitan City. <Amended by Ordinance No. 2546, Dec. 30, 1989>

Article 39-2 (Scope of Property Which May Be Sold by Free Agreement) (1) The farmland in an agriculture promotion area referred to in Article 30 of the Farmland Act may, to the extent of not more than ten thousand square meters in area, be sold by a free agreement under Article 95 (2) 2 of the

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Decree. <Amended by Ordinance No. 3685, Nov. 15, 1999>

(2) The farmland which has been leased to and de facto cultivated by one person for five or more consecutive years may be sold to him/her under paragraph (1). <Amended by Ordinance No. 3545, Jan. 15, 1999>

(3) Any disused river site which is transferred by the State under Article 95 (2) 6 of the Decree may, to the extent of not more than thirty-three hundred square meters in area in a Dong of a City or Si or sixty-six hundred square meters in area in an Eup or Myeon of a Si or Gun, be sold to a person who takes possession of such disused river site (meaning a person who obtains permission for occupation and use under Article 33 of the River Act and who continues to use that river site by a lease agreement thereon after such transfer): Provided, That in cases falling under any of the following subparagraphs, the property deemed unworthy of preservation by the Mayor may be sold in excess of the aforementioned areas: <Amended by Ordinance No. 3883, Jul. 16, 2001>

1. In case that a person who purchases the property other than the site for a public facility such as a road, public parking lot or park included in the urban management planning (including the property which is intended as or deemed appropriate for the site for a public facility) is not threaten to use such property for any purpose other than that of sale for ten years in the future; <Amended by Ordinance No. 3685, Nov. 15, 1999; Ordinance No.

4131, Jul. 25, 2003>

2. In case that the Mayor deems it particularly necessary to sell the property and does so with the consent of the Seoul Metropolitan Council;

and <Amended by Ordinance No. 3545, Jan. 15, 1999>

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3. In case that there is the farmland in a disused river site: Provided, That the provisions of paragraph (1) shall apply mutatis mutandis to the selling area. <Amended by Ordinance No. 3545, Jan. 15, 1999>

(4) If the property is sold under the proviso of paragraph (3) of this Article, a special arrangement on such sale shall be registered under Article 95-2 (1) of the Decree. <Amended by Ordinance No. 3545, Jan. 15, 1999>

(5) In cases falling under any of the following subparagraphs, the property may be sold by a free agreement under Article 95 (2) 25 of the Decree:

<Amended by Ordinance No. 3545, Jan. 15, 1999>

1. In case that the small-scale land (meaning the land the area of which is not more than two hundred square meters in a Dong falling under the jurisdiction of the Incheon Metropolitan City or any other Metropolitan Government, three hundred square meters in that of a Si, or seven hundred square meters in any other zone) in which there is a building not owned by a local government except for that newly constructed without permission as provided in subparagraph 2 of Article 2 of the Incheon Metropolitan Ordinance on the Maintenance and Improvement of Urban and Residential Environment is sold to the owner of the said building; <Amended by Ordinance No. 3545, Jan. 15, 1999; Ordinance No. 4071, Apr. 15, 2003;

Ordinance No. 4167, Dec. 30, 2003>

2. In case that the land which is a narrow and long unused road, ditch or embankment and which is in the private land owned by the same person or in a site surrounded thereby or any other site for an industrial facility such as an existing industrial complex is sold to the owner of the said private land or industrial facility (limited to any case in which 1/2 or more of the

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boundary line of the land abutting on the private land owned by the same person); <Amended by Ordinance No. 3685, Nov. 15, 1999>

3. In case that the small-scale land the area of which is not more than one thousand square meters in a zone falling under the jurisdiction of the Incheon Metropolitan City, any other Metropolitan Government or Si or two thousand square meters in any other zone and in which there is a building not owned by a local government except for that newly constructed without permission as provided in subparagraph 2 of Article 2 of the Incheon Metropolitan Ordinance on the Maintenance and Improvement of Urban and Residential Environment is sold to the owner of the said building to the extent not exceeding double the floor space thereof (if double the floor space of the building is less than the area of the small-scale land referred to in subparagraph 1, the land not exceeding such area shall be included):

Provided, That in case that the land occupied by many dense buildings not belonging to a local government is unworthy of utilization thereby, only collectivized part may be sold in lots to the extent of sale under the main sentence of this subparagraph even if the area of such land exceeds one or two thousand square meters as stated above; <Amended by Ordinance No.

3883, Jul. 16, 2001; Ordinance No. 4167, Dec. 30, 2003>

Article 39-4 (Reduction of or Exemption from Proceeds from Sale) (1) The property provided in any of the following subparagraphs may be sold to a foreign-invested enterprise at cost under Article 96 (10) of the Decree, and in this case, such cost shall be land purchase expenses and investment and development expenses (including construction expenses, in case that there is a building):

(32)

(2) Notwithstanding the provisions of paragraph (1), the cost of the property may be partly reduced if necessary to promote the sale of a local industrial complex and so on in lots.

(3) The property the sale price of which may be remitted to all the amount under Article 96 (10) of the Decree shall be as follows:

1. The property situated in an investment promotion area developed and managed by a local government for inducement of foreign investment;

2. The property situated in any place of a large-scale factory construction business in which foreigners invest three billion or more US dollars as well as in other appurtenant facilities; and <Amended by Ordinance No. 3685, Nov. 15, 1999>

3. The property situated in any place of a business which is carried out by a foreign-invested enterprise and in which one thousand or more persons are engaged a day on the average. <Amended by Ordinance No. 3685, Nov.

15, 1999>

(4) The property the sale price of which may be remitted to half the amount under Article 96 (10) of the Decree shall be as follows:

1. The property situated in any place of a business which is provided in Article 9 of the Foreign Investment Promotion Act or Article 121-2 (1) of the Restriction of Special Taxation Act and in which foreigners invest five million or more US dollars; <Amended by Ordinance No. 3685, Nov. 15, 1999>

2. The property situated in any business place of a venture business established under the Act on Special Measures for the Promotion of Venture Businesses in which foreigners invest ten million or more US dollars;

(33)

<Amended by Ordinance No. 3685, Nov. 15, 1999>

3. The property situated in any place of a business which is carried out by a foreign-invested enterprise and in which not less than five hundred but less than one thousand persons are engaged a day on the average;

<Amended by Ordinance No. 3685, Nov. 15, 1999>

4. The property situated in any place of a business carried out by a foreign-invested enterprise one hundred percent of the gross production of which is exported; and <Amended by Ordinance No. 3685, Nov. 15, 1999>

5. The property situated in any place of a foreign-invested business in which fifty or more percent of the gross production is exported and the procurement rate of Korean parts and raw materials is not less than seventy percent.

(5) The property the sale price of which may be remitted to quarter the amount under Article 96 (10) of the Decree shall be as follows:

1. The property situated in any business place of a venture business established under the Act on Special Measures for the Promotion of Venture Businesses in which foreigners invest not less than five million US dollars but less than ten million US dollars;

2. The property situated in any place of a business which is carried out by a foreign-invested enterprise and in which not less than three hundred but less than five hundred persons are engaged a day on the average;

<Amended by Ordinance No. 3685, Nov. 15, 1999>

3. The property situated in any place of a business of a foreign-invested enterprise in which fifty or more percent of the gross production is exported and the procurement rate of Korean parts and raw or subsidiary materials

(34)

is fifty or more percent; and <Amended by Ordinance No. 3685, Nov. 15, 1999>

4. The property situated in any place of a business of a foreign-invested enterprise seventy or more percent of the gross production of which is exported. <Amended by Ordinance No. 3685, Nov. 15, 1999>

(6) In case of selling the property after the reduction of proceeds from such sale under paragraphs (3) through (5), the purpose thereof shall be accomplished, the said property shall neither be given as a collateral security nor be sold, and failing the implementation thereof, a special arrangement on the recovery of the property shall be registered under Article 95-2 of the Decree. <Newly Inserted by Ordinance No. 3685, Nov.

15, 1999>

CHAPTER Ⅵ ACCEPTANCE OF DONATION

Article 40 (Principle of Acceptance of Donation)

In case of accepting the donation of property to use it as administrative property, such donated property shall be managed in conformity with any administrative purpose.

Article 41 (Property Subject to Permission for Gratuitous Use) (1) In case of accepting the donation of the land which is public property and on which any facility including a building is constructed, only the property the donation of which is accepted shall be subject to the permission for the gratuitous use, and the said land shall be subject to the permission for the onerous use.

(35)

(2) The land referred to in paragraph (1) shall include the site for a facility and any other adjacent land necessary for the use of the said facility.

Article 42 (Period of Gratuitous Use)

A period of the gratuitous use of the property the donation of which is accepted shall be conformed to Article 83 of the Decree and shall be reckoned from the date of such acceptance.

Article 44 (Investigation of De Facto State)

(1) With respect to the property the donation of which is accepted and the gratuitous use of which is permitted, the following matters shall be confirmed and inspected every year:

1. Management state of the said property;

2. Whether or not to sublease the said property and dispose of any right thereto;

3. Whether or not to use the said property in conformity with the purpose of such permission for use;

4. Whether or not to alter the original condition of the said property;

5. Whether or not to construct or extend a building and establish facilities without permission in the said property and to alter their original condition;

and

6. Other necessary matters.

(2) If there are matters subject to the correction as a result of confirmation and inspection under paragraph (1), necessary measures, such as the correction according to a prepared plan for those measures, shall be taken.

CHAPTER Ⅶ MANAGEMENT OF OFFICE BUILDINGS

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Article 45 (Preparation of Plan for Maintenance and Improvement of Office Buildings)

(1) The Mayor shall prepare and implement a plan for the maintenance and improvement of office buildings after making a previous examination of whether or not the construction thereof is reasonable by a written plan for the construction of buildings according to offices, taking into account the location, scale, financial resources and so on at the time of construction of the City Hall and other office buildings.

(2) Any order of priority of the maintenance and improvement according to a plan for the maintenance and improvement of office buildings under paragraph (1), shall be classified into disaster, peril of destruction, new construction, lease, superannuation, smallness and location inappropriateness.

Article 46 (Site for Office Building)

The site for an office building shall, in principle, be not less than three times the total floor space of that building: Provided, That if it is difficult to ensure not less than three times, not smaller than the building coverage ratio provided in the Building Act may be permitted, taking into account the regional circumstances.

Article 47 (Design of Office Building)

The standards for the design of an office building and the scale of that building shall be determined by the Mayor and shall consistent with any of the following subparagraphs:

1. Reasonable scale in which the future demand accompanied by the increase of organizations and personnel is taken into account;

2. Design of the exterior which brings out the peculiar traditional beauty as

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a symbol of regional community in clear relief;

3. Design by which the horizontal and vertical extension is possible;

4. Establishment of underground facilities capable of being used as military facilities and air-raid shelters during an emergency;

5. Ferroconcrete and air-conditioned building;

6. Economically efficient and safe structure; and

7. Development of greenbelts capable of being used as parks and designation of security zones in the vicinity of an office building.

Article 48 (Deliberation by Building Committee)

If it is intended that an office building shall be constructed, the Building Committee shall deliberate on such construction in accordance with the Incheon Metropolitan Ordinance on Building.

Article 45 (Encouragement of Construction of Integrated Office Building) (1) If it is intended that an office building shall be newly constructed, the

integration thereof shall be encouraged to such an extent as the relevant budget permits.

(2) If any urban planning project is carried out for the purpose of encouraging the construction of an integrated office building, the site therefor shall be ensured first of all.

CHAPTER Ⅷ MANAGEMENT OF OFFICIAL RESIDENCE

Article 50 (Definition)

The term " official residence" as used in this Ordinance means any official house which is owned for use of public officials belonging to the Incheon

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Metropolitan City, such as the Mayor, Vice Mayors and other facility management officials. <Amended by Ordinance No. 3685, Nov. 15, 1999>

Article 51 (Classification of Official Residences)

The official residences shall be classified as follows:

1. Grade Ⅰ official residence : official residence for the use of the Mayor;

2. Grade Ⅱ official residence : official residence for the use of Vice Mayors;

and

3. Grade Ⅲ official residence : official residence for the use of facility management officials, other public officials belonging to the Incheon Metropolitan City and so on.

Article 52 (Permission for Use)

The Mayor shall, upon request for permission for the use of an official residence, permit such use: Provided, That the use of a Grade Ⅰ or Ⅱ official residence shall not require the permission.

Article 53 (Responsibility for Use)

A public official who uses an official residence (hereinafter referred to as the "user") shall, in doing so, fulfill good user's obligation in respect of due management as follows:

1. To prevent any damage to property and facility;

2. To prevent any loss of or damage to equipment;

3. To preserve cleanliness; and

4. To curtail various charges for public service and to faithfully pay all the public dues which shall be borne by the user.

Article 54 (Keeping of Official Residence Management Book)

In order to ensure that official residences are efficiently managed, their

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respective specific management numbers and the scope of public officials who may be permitted to use them shall be determined and the official residence management book shall be kept and arranged in order.

Article 55 (Revocation of Permission for Use)

In a case falling under any of the following subparagraphs, the Mayor shall revoke the permission for the use of an official residence:

1. In case that the user is removed from his/her office;

2. In case that the user discontinues the use of an official residence;

3. In case that there arises any great difficulty in managing or operating an official residence normally because the user neglects his/her obligation in respect of due management as is provided for in Article 53; or

4. In case that it is necessary that the permission for the use of an official residence should be revoked for the reasonable management or operation thereof.

Article 56 (Responsibility of Bearing Expenses for Management of Official Residences)

Expenses for the management of official residences shall, in principle, be borne by the users thereof: Provided, That other expenses which fall under any of the following subparagraphs may be paid out of the relevant budget;

1. Expenses necessary for building fundamental facilities, such as those for the construction, reconstruction and extension of a building, the construction of a structure, a fixture and other communications facilities, the installation of a large-scale apparatus such as a boiler and an air conditioner and the installation of waterworks, and expenses necessary for landscaping;

2. Expenses for the maintenance and management of property, such as those

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