CONTENTS
- 1. Registration of Ownership Transfer Litigation | The Structure of the Dispute over Remaining Registrations and Registration of Ownership Transfer in a Reconstruction Complex
- - Principal Issue: Whether the "Management and Disposal Plan" Can Be Linked to "Succession of Possession"
- - The Lower Court's Determination: Recognizing Succession of Possession by Approval and Public Notice, and Partially Granting the Transfer Registration Based on Acquisitive Prescription
- 2. Registration of Ownership Transfer Litigation | The Supreme Court's Determination: Possession Is Not "Automatically Succeeded To" by Approval and Public Notice Alone
- - The Portion Concerning the First Association Was Maintained, While the "Common Facilities Within the Complex" Were Reversed and Remanded
- 3. Registration of Ownership Transfer Litigation | The Significance of This Judgment
- - Materials a Reconstruction Association Should Prepare for Registration of Ownership Transfer Litigation
- - Assistance from Daeryun Law Firm LLP
1. Registration of Ownership Transfer Litigation | The Structure of the Dispute over Remaining Registrations and Registration of Ownership Transfer in a Reconstruction Complex
The parties to the registration of ownership transfer litigation were two reconstruction associations (the First Improvement Zone Association and the Second Improvement Zone Association) and the Korea Land and Housing Corporation (LH).
LH, the former project operator, had completed transfer registration for the exclusively owned portions and certain land shares at the time of the original sale, but for some of the land and buildings within the complex (the sites of common facilities and welfare facilities, the management office, the power room, and the like) and certain shares, the registration remained in LH's name.
Subsequently, after each obtained approval and public notice of a management and disposal plan for its respective improvement zone, the two reconstruction associations filed registration of ownership transfer litigation against LH, seeking performance of the registration procedures on the ground of the completion of acquisitive prescription based on the possession of the former sectional owners.
Meanwhile, with respect to the common facilities within the complex, an independent party intervention (the participation of another association) also took place, creating a structure in which a uniform determination as to the same legal relationship was required.
Principal Issue: Whether the "Management and Disposal Plan" Can Be Linked to "Succession of Possession"
The central issues of the registration of ownership transfer litigation in this case can be summarized as follows.
(2) How the subject of the "joint possession" of the common facilities within the complex (the sites of the management office, welfare facilities, green spaces, and the like) and the scope of succession should be viewed
(3) Who is the party able to exercise the claim for registration of ownership transfer based on the completion of acquisitive prescription (the association vs. the group of sectional owners)
In other words, the issue was how the arising of the "right to use and profit" under the Act on the Improvement of Urban Areas and Residential Environments meshes with the doctrines of "possession" and acquisition by prescription under the Civil Act.
The Lower Court's Determination: Recognizing Succession of Possession by Approval and Public Notice, and Partially Granting the Transfer Registration Based on Acquisitive Prescription
The lower court held that where there is an approval and public notice of a management and disposal plan, the possession of the former sectional owners within the improvement zone is succeeded to the reconstruction association as the project implementer.
On that premise, the lower court found that the First Improvement Zone Association had succeeded to the possession of the sectional owners of the First Apartment, and that the Second Improvement Zone Association had also succeeded to the possession by the sectional owners of the Second Apartment of the common facilities within the complex. It then found that the possession of each association was presumed to be peaceable and open possession held with an intention to own, and recognized the completion of acquisitive prescription.
Accordingly, it rendered a partial decision granting the claim to the extent of ordering LH to perform the registration of ownership transfer procedures.
2. Registration of Ownership Transfer Litigation | The Supreme Court's Determination: Possession Is Not "Automatically Succeeded To" by Approval and Public Notice Alone
The Supreme Court determined that it was difficult to accept, as it stood, the lower court's linkage of "approval and public notice = succession of possession."
The Supreme Court held that, although a right of the project implementer to claim delivery may be recognized on the basis of the provisions of the Act on the Improvement of Urban Areas and Residential Environments (restricting the use and profit of the former rights holders after approval and public notice of the management and disposal plan, and permitting the project implementer to use and profit), this is a structure in which the claim for delivery is established on the premise that the possession of the former owners and others still exists.
It further held that, in a reconstruction project (apart from certain exceptions), the authority of compulsory acquisition under the Act on Acquisition of and Compensation for Land for Public Works Projects is not conferred as a matter of course, so that, where no agreement is reached, possession must be obtained through a separate procedure such as a litigation claiming sale. In light of this scheme, it ruled that possession of the land and buildings within the improvement zone cannot be regarded as succeeded to the association immediately upon approval and public notice alone.
The Supreme Court thus distinguished the arising of the right to use and profit from the transfer of possession, drawing the line that the succession of possession requires an examination of specific facts, such as voluntary delivery, completion of relocation, and payment of the price.
The Portion Concerning the First Association Was Maintained, While the "Common Facilities Within the Complex" Were Reversed and Remanded
Applying this to the specific matter, the Supreme Court divided its conclusions as follows.
1) Concerning the First Improvement Zone Association
Although there were inappropriate aspects in the lower court's reasoning (succession of possession by approval and public notice), there was room, on the record, to regard the First Association as having completed the succession of possession from the former sectional owners through, among other things, the completion of relocation. The Supreme Court therefore held that the lower court's conclusion itself, granting the claim for registration of ownership transfer based on the completion of acquisitive prescription, could be maintained.
2) Concerning the Common Facilities Within the Complex (the Portion Asserted by the Second Association)
By contrast, the common facilities within the complex were regarded as having been jointly possessed by the sectional owners of the First and Second Apartments through the residents' representative council, and the Supreme Court determined that the approval and public notice with respect to the Second Association alone could not be taken to result in that joint possession being succeeded to the Second Association as a matter of course.
Accordingly, finding that there was a misunderstanding of the legal principles in the part of the lower court that partially granted the principal claim of the intervenor (the Second Association), the Supreme Court reversed and remanded the portion concerning the "common facilities within the complex" among the part of the lower judgment in which the defendant lost.
3. Registration of Ownership Transfer Litigation | The Significance of This Judgment
This judgment provides the following clear standards for the practice of registration of ownership transfer litigation.
Materials a Reconstruction Association Should Prepare for Registration of Ownership Transfer Litigation
Category | Key Points to Verify | Representative Materials |
Fact of succession of possession | Whether, beyond approval and public notice, actual delivery of possession and completion of relocation occurred | · Materials confirming completion of relocation · Delivery agreement · Demolition and closure records |
Progress of negotiation and claim for sale | Negotiations with and litigation against non-applicants for sale and others | · Complaint and judgment in the claim for sale · Materials on deposit or payment of the price |
Possession structure of common facilities | The subject of possession under the residents' representative council and the management rules | · Management rules · Minutes of the representative council · Document handing over management authority |
Commencement and completion of acquisitive prescription | The point in time of commencement of possession and the presumption of peaceable and open possession | · Photographs and drawings · Records of use and management · Materials on utility charges and maintenance |
Party exercising the right | Standing to exercise the claim for transfer registration (association/sectional owners) | · Documents establishing succession · Materials on whether there was delegation or assignment |
Assistance from Daeryun Law Firm LLP
In registration of ownership transfer litigation related to reconstruction and improvement projects, Daeryun Law Firm LLP prioritizes designing the evidence to prove the facts of the succession of possession, rather than pressing a conclusion on the basis of management-and-disposal-plan-stage materials alone.
Where joint possession and management rules are intertwined, as with common facilities within a complex, it also reconstructs the structure of the attribution of rights by taking together the handover of management authority, the operation of the representative council, and the actual state of use and profit.
Because registration of ownership transfer litigation is ultimately decided by "who possessed what, from when, and in what manner," it is advisable to organize materials from the early stage and to approach the matter strategically.
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