Registration of Ownership Transfer Litigation | A Supreme Court Judgment Holding That Possession Is Not Automatically Succeeded to Merely by the Approval and Public Notice of a Management and Disposal Plan

The central issues of the registration of ownership transfer litigation in this case can be summarized as follows.

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 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.

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.

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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