On April 9, 2012, the Plaintiff decided to purchase at KRW 475,00,000 each share of the land in Gangseo-gu, Busan, F, G, H land, and I, and J land located within the land transaction permission zone under the National Land Utilization and Planning Act (hereinafter “instant land”) from the Defendants (hereinafter “instant sales contract”), and paid the Defendants KRW 50,00,000 as the down payment.

B. On July 3, 2012, the Plaintiff filed an application for permission for a land transaction contract with respect to the instant land, and received non-permission disposition from the head of Gangseo-gu Busan Metropolitan Government, the competent authority, on October 2014 due to the Plaintiff’s failure to meet the requirements for residence and an illegal alteration of the form and quality.

2. Determination

A. Article 118(1) of the National Land Planning and Utilization Act provides that “The parties who intend to enter into a contract to transfer or establish ownership or superficies (including reservations) on the land located in a zone subject to permission shall jointly obtain permission from the head of a Si/Gun/Gu under the conditions as prescribed by Presidential Decree.” Article 118(6) provides that “the land transaction contract entered into without obtaining permission under paragraph (1) shall not take effect.” Thus, the land transaction contract or reservations entered into without obtaining permission for the land located in the zone subject to permission shall not take effect. However, the land transaction contract or reservations entered into without obtaining permission for the said land shall take effect retroactively, but the said contract or reservations entered into on the premise that permission is to take effect later is valid retroactively upon obtaining permission for the land transaction contract, and becomes null and void retroactively (see, e.g., Supreme Court Decision 2012Da8900, Feb. 14, 2013).