[Defense of an Entrusted Management Lawsuit] Daeryun Law Firm Defends an Entrusted Management Lawsuit Filed Against a Management Body

The client who received the lawsuit for a provisional injunction prohibiting interference with the management duties was the representative of a management body, and had entrusted the management duties to a new management company, N.

A considerable amount of time had passed since sales began, and most of the units had been occupied. Reflecting the requests of the residents, the management company was changed from management company D, which the developer had designated, to the new management company N.

As a result, management company D, which had been handling the existing management duties, reportedly used a lawsuit for a provisional injunction prohibiting interference with the management duties to block the entrustment of the management duties to management company N.

The client therefore came to the Daeryun Law Firm Construction and Real Estate Group for the defense of the lawsuit for a provisional injunction prohibiting interference with the management duties.

The Daeryun Law Firm Construction and Real Estate Group closely examined the arguments raised by the opposing party in the entrusted management lawsuit and prepared a defense based on the following arguments.

▶ Because the developer has the authority to manage only until the management body begins its management, the management authority of the developer and of management company D, which the developer designated, is merely temporary.

▶ Management company D argues that the term of its management contract with the developer remains in effect. However, this is merely a management mandate contract that the developer concluded on behalf of the management body, so that mandate contract may be terminated at any time, and the management body terminated the mandate contract with management company D.

▶ Even if there is a clause in the sales contract between the developer and the purchasers (residents) providing that the developer may perform management duties until a certain proportion of units are occupied, recognizing that provision could result in the developer evading the Act on the Ownership and Management of Condominium Buildings through the sales contract, so the effect of that clause cannot be recognized.

The court accepted all of the arguments of the Daeryun Law Firm Construction and Real Estate Group and dismissed the lawsuit filed by management company D with the following judgment.

“The management duties of management company D continue only temporarily, until the management body is actually organized and begins its self-governing management duties. Because the management body has begun its self-governing management duties, management company D no longer has any authority over the management duties.”

With the assistance of the Daeryun Law Firm Construction and Real Estate Group, the client was able to defend the entrusted management lawsuit.

Daeryun Law Firm commits to serving as a legal partner that works diligently to realize the client's full interests and protect the client's rights.