[1] In a case where a person who purchased an aggregate building and constructed the aggregate building did not complete the registration of ownership transfer for the site, whether he/she has the right to possess and use the site for the ownership of the section for exclusive use (affirmative), and whether the right to possess and use the site constitutes “right to use the site” under the Act on the Ownership and Management of Aggregate Buildings (affirmative)

[2] In a case where a person who purchased a site and constructed an aggregate building without having completed the registration of ownership transfer as to the site, and the auction procedure as to the section for exclusive use is in progress without having completed the registration of ownership transfer as to the section for exclusive use, whether the successful bidder acquires the right to use the site (affirmative), and measures that the successful bidder may take against the architect of the aggregate building who has received the registration

[3] Whether a person who has lost the ownership of an exclusive ownership by auction without acquiring the ownership of an aggregate building may dispose of the shares acquired in the future to a third party, not the successful bidder who acquired the ownership of the exclusive ownership (negative in principle), and the validity of an act of disposal of the share in the site in violation of this principle (negative)

[1] Where a constructor of an aggregate building purchased the relevant site, but did not complete the registration of ownership transfer, and constructed an aggregate building on the ground, the validity of a sales contract is the validity of a right to possess and use the site for the ownership of a section for exclusive use. Such right to possess and use is a principal right, which differs from a simple right to possess, and is a right that a sectional owner under Article 2 subparagraph 6 of the Act on the Ownership and Management of Aggregate Buildings has against the site of a building to own a section for exclusive use.

[2] In a case where a constructor of an aggregate building purchased a site, but failed to obtain a registration of ownership transfer due to the delay in cadastral adjustment, and thereafter, the auction procedure relating to the section for exclusive use was conducted without a registration of ownership transfer, and the third party was awarded a successful bid for the section for exclusive use, the successful bidder shall acquire the right to use the site possessed by the constructor together with the section for exclusive use. In this case, the successful bidder who acquired the right to use the site may not seek a registration of ownership transfer against the constructor of the aggregate building who received a registration of ownership transfer pursuant to Article 57-3(1) of the Registration of Real Estate Act, apart from claiming a registration of ownership transfer based on Article 60-2 of the former Enforcement Rule of the Registration of Real Estate Act (amended by the Regulations on the Registration of Real Estate, No. 2025 of May 30, 2006) deleted pursuant to the new provision.

[3] The purpose of Article 20 of the Act on the Ownership and Management of Aggregate Buildings is to ensure stability in legal relations as to aggregate buildings and reasonable discipline by preventing the occurrence of sectional ownership without a right to use site by suppressing the separation of a section for exclusive use of an aggregate building from a section for exclusive use of an aggregate building to the maximum extent possible. Thus, barring special circumstances, such as where there are regulations stipulating that a right to use site may be separately disposed of for a section for exclusive use of an aggregate building, a person who loses the ownership of a section for exclusive use by auction without acquiring the ownership of the said section for exclusive use of an aggregate building does not dispose of the shares that he/she acquired by the successful bidder

[1] Article 2 subparag. 6 and Article 20 of the Act on the Ownership and Management of Aggregate Buildings, Articles 192 (1) and 263 of the Civil Act / [2] Article 2 subparag. 6 and Article 20 of the Act on the Ownership and Management of Aggregate Buildings, Article 57-3 (1) of the Registration of Real Estate Act, Article 60-2 (current Deletion) of the former Enforcement Rule of the Registration of Real Estate Act (amended by the Regulations on the Registration of Real Estate, No. 2025 of May 30, 2006) / [3] Article 20 of the Act on the Ownership and Management of Aggregate Buildings, Article 105 of the Civil Act

[1] [3] Supreme Court Decision 2004Da742 Decided March 10, 2006 (Gong2006Sang, 600) / [1] Supreme Court Decision 2000Da10741 Decided January 30, 2001 (Gong2001Sang, 532) Supreme Court Order 2004Ma978 Decided March 27, 2006 (Gong2006Sang, 781) / [2] Supreme Court Decision 2002Da40210 Decided July 8, 2004 (Gong204Ha, 1303), Supreme Court Decision 2004Da58611 Decided September 22, 2006 (Gong2006Ha, 1792)

Plaintiff 1 and six others (Law Firm Bupyeong General Law Office, Attorneys Kim Nam-nam et al., Counsel for the plaintiff-appellant)

Defendant 1 and one other (Law Firm Han-won, Attorneys Yu Jung-won et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2006Na65837 decided June 13, 2007

The part of the lower judgment against Defendant 1 is reversed, and that part of the case is remanded to the Seoul High Court. Defendant 2’s appeal is dismissed. The costs of appeal between the Plaintiffs and Defendant 2 are assessed against Defendant 2.

We examine the grounds of appeal.

1. Regarding ground of appeal No. 1

If a constructor of an aggregate building purchased the relevant site, but yet completed the registration of ownership transfer, and constructed an aggregate building on the ground as a result of the execution of a sales contract, he/she has the right to possess and use the site for the ownership of the exclusive ownership as the validity of a sales contract. Such right to possess and use is a principal right different from a mere right to possess and use, and it constitutes a right to use the site, which is a right of a sectional owner under Article 2 subparagraph 6 of the Act on the Ownership and Management of Aggregate Buildings (hereinafter "the Aggregate Buildings Act"), to own a section of exclusive ownership, to own the said section of exclusive ownership (see Supreme Court Decision 2004Da742, Mar. 10, 206, etc.). Meanwhile, where the constructor of an aggregate building purchased the relevant site but did not complete the registration of ownership transfer, but the third party was at the auction procedure concerning the section of exclusive ownership without completing the registration of ownership transfer, and the successful bidder has the right to use the site (see, e.g., Supreme Court Decision 2004Da427084.

Examining the facts duly confirmed by the court below in light of the above legal principles, it is reasonable to view that the plaintiffs who received a direct bid or who received the successful bid from the successful bidder in the real estate auction procedure are not only entitled to use the land in accordance with Article 20 (1) of the Aggregate Buildings Act, but also entitled to file a claim for the registration of transfer of the land share corresponding to the right to use the site of this case against Defendant 1, who acquired the ownership of the site of this case. Thus, the judgment of the court below to the same purport is just, and contrary to the allegations in the grounds of appeal, there is no error of law by misapprehending the legal principles as to the right to use the land under the Aggregate

2. Regarding ground of appeal No. 2

A. According to the reasoning of the first instance judgment cited by the lower court, the lower court determined that the Plaintiffs, who are the users of the site of the instant site, can request Defendant 1, who completed the registration of ownership transfer as to the instant site ownership, to implement the procedure for change of a site ownership according to the ratio of shares in the owner of the instant site and the share list by section of exclusive ownership and

B. The above determination by the court below is based on Article 60-2 of the former Enforcement Rule of the Registration of Real Estate Act (amended by Supreme Court Regulation No. 2025, May 30, 2006). However, the above provision was deleted upon the amendment of the former Enforcement Rule of the Registration of Real Estate Act as of May 30, 2006, and it was replaced by the new Registration of Real Estate Act (amended by Act No. 7954, May 10, 2006) Article 57-3 (1) of the former Enforcement Rule of the Registration of Real Estate Act (amended by Act No. 7954, May 106) provides that "where a person who constructed a building under Article 1 or 1-2 of the Aggregate Buildings Act has a right to use a site, he may file an application for registration of transfer of right to use a site jointly with the present sectional owner when completing the registration of transfer of ownership with respect to a sectioned building without registering the right to a site.

Nevertheless, the court below held that the plaintiffs can seek the implementation of the procedure for change of right to a site in its holding against defendant 1. Thus, the court below erred by misapprehending the legal principles on change of right to a site, which affected the conclusion of the judgment. The ground of appeal pointing this out has merit

3. As to the third ground for appeal

A. The purport of Article 20 of the Aggregate Buildings Act is to promote stability in legal relations as to the aggregate building and reasonable discipline by preventing the occurrence of sectional ownership without a right to use site by suppressing the separation of a section for exclusive use of an aggregate building and a right to use site. Thus, barring special circumstances, such as where there are regulations to separately dispose of the right to use site against a section for exclusive use, a person who has newly constructed an aggregate building but has lost the ownership of a section for exclusive use by auction without acquiring the ownership of the said section for exclusive use, fails to separately dispose of the ownership to a third party, not a successful bidder who acquired the ownership of the section for exclusive use, and the disposal disposition of the share in the site in violation thereof is null and void (see Supreme Court Decision 2004Da742, Mar.

In light of the above legal principles and records, it is reasonable to view that Defendant 1’s act of disposing of the instant housing site shares owned by the Plaintiffs against Defendant 2 among the instant housing site is null and void as it violates Article 20 of the Aggregate Buildings Act. Therefore, the judgment of the court below to the same purport is just, and contrary to what is alleged in the grounds of appeal, there is no error of law by misapprehending the legal principles on Article 20

B. In light of the circumstances indicated in the judgment below, the court below determined that Defendant 2 did not constitute a bona fide third party under Article 20(3) of the Aggregate Buildings Act, since Defendant 2 knew that the instant share in the site cannot be separately disposed of with the instant exclusive ownership as the right to use the site of an aggregate building. In light of the records, the judgment of the court below is just, and there is no violation of the rules of evidence as alleged in the

4. Conclusion

Therefore, the part of the lower judgment against Defendant 1 is reversed, and that part of the case is remanded to the lower court for further proceedings consistent with this Opinion. Defendant 2’s appeal is dismissed, and the costs of appeal to the lower court are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Hong-hoon (Presiding Justice)