[1] In a case where a business entity supplied a multi-family housing by setting a sale price below the upper limit amount calculated according to the criteria under Article 38-2 of the former Housing Act, but the amount by item of housing site expenses or construction expenses that constitutes actual sale price exceeds the upper limit amount by item of housing site expenses or construction expenses that constitutes the upper limit amount, whether the sales price violates the upper limit system (negative in principle)

[2] In a case where there are expenses not actually incurred in a joint housing construction project among various items constituting the basic type construction expenses publicly notified by the Minister of Land, Transport and Maritime Affairs pursuant to Article 38-2 (1) and (3) of the former Housing Act, whether such expenses shall be deducted from the basic type construction expenses when calculating the upper limit of the sale price (negative)

[3] Whether additional construction costs due to welfare facilities installed in excess of the statutory minimum basic area can be calculated as construction costs for such facilities (affirmative with qualification)

[1] Article 38-2(1) of the former Housing Act (amended by Act No. 9405, Feb. 3, 2009; hereinafter “former Housing Act”) provides that “multi-family housing supplied by a project undertaker to the general public pursuant to the provisions of Article 38 shall be supplied below the sale price calculated according to the standards prescribed in this Article. In this case, sale price shall be composed of housing cost and construction cost, specific details, appraisal method, method of selecting appraisal institutions, etc. shall be determined by Ordinance of the Ministry of Land, Transport and Maritime Affairs.” Article 38-2(2) and (3) provides that the method of calculating the sale price of multi-family housing, which is the constituent element of the sale price of the above paragraph (1), shall not be limited to the sale price of multi-family housing in accordance with the standards prescribed by Ordinance of the Ministry of Land, Transport and Maritime Affairs, which constitutes the upper limit of the sale price of multi-family housing and the individual items of the sale price of multi-family housing in accordance with the standards prescribed in Article 38-2 of the former Housing Act.

[2] Article 38-2(1) and (3) of the former Housing Act (amended by Act No. 9405 of Feb. 3, 2009) provides that the basic type construction cost which constitutes the upper limit of the sale price shall be determined and publicly notified by the Minister of Land, Transport and Maritime Affairs, and there is no provision that excludes expenses not actually incurred in individual joint housing construction projects from the basic type construction cost publicly notified by the Minister of Land, Transport and Maritime Affairs. The basic type construction cost itself constitutes an appropriate standard for the construction of universal apartment housing which reflects the recent trend of residential environment and quality while complying with various statutes concerning multi-family housing at a certain point, and thus, it is not necessary to deduct the upper limit of sale price from the basic type construction cost when calculating the upper limit of sale price.

[3] Article 38(1) and (3) of the former Housing Act (amended by Act No. 9405, Feb. 3, 2009; hereinafter the same) provide that among the items constituting the upper limit of the sale price, the construction cost shall be calculated by adding the construction cost to the basic type construction cost determined and publicly notified by the Minister of Land, Transport and Maritime Affairs, as prescribed by Ordinance of the Ministry of Land, Transport and Maritime Affairs. Article 14(2) [Attachment 1] 4 of the former Rules on the Calculation, etc. of Sale Price of Multi-Family Housing (amended by Ordinance No. 226 of the Ministry of Land, Transport and Maritime Affairs, Mar. 4, 2010) provides that the “construction cost” of welfare facilities installed in excess of the statutory standard area shall be added to the basic type construction cost. Article 38-4(1) of the Housing Act, and Article 42-5 subparag. 1 of the Enforcement Decree of the Housing Act provides that the sale price examination committee shall deliberate on the appropriateness of sale price under Article 38-2(1) of the former Housing Act.

[1] Article 38-2 of the former Housing Act (amended by Act No. 9405 of Feb. 3, 2009) / [2] Article 38-2 (1) and (3) of the former Housing Act (amended by Act No. 9405 of Feb. 3, 2009) / [3] Article 38 (1) and (3) of the former Housing Act (amended by Act No. 9405 of Feb. 3, 2009), Article 38 (1) and (3) of the Housing Act, Article 38-4 (1) of the Housing Act, Article 42-5 (1) of the Enforcement Decree of the Housing Act, Article 42-5 (2) [Attachment 1] Article 14 (2) [Attachment 4] of the former Rules (amended by Ordinance of the Ministry of Land, Transport and Maritime Affairs of Mar. 4, 2010]

See Attached List of Plaintiffs (Plaintiffs 4, 14, 25, 26, 37, 42, 52, 57, 68, 73, 76, 82, 84, 91, 92, 95, 96, 100, 109, 116, 117 Law Firm Barun et al., Counsel for the plaintiff-appellant)

Incheon Metropolitan City Urban Development Corporation (Law Firm Apex, Attorneys Park Gi-ro et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2010Na47874, 47881 decided March 30, 201

All appeals are dismissed. The costs of appeal are assessed against the plaintiffs.

The grounds of appeal are examined.

1. As to the ground of appeal No. 1 by law firm Barun

Examining the reasoning of the judgment below in light of the records, the court below is just in finding the facts as stated in its reasoning after compiling the evidence adopted by the court below, and judged that most of the apartment buildings of this case are used mainly by the occupants, and its size is extremely low compared to the area of the apartment site of this case, and the defendant, a project undertaker, must construct the road for the supply of apartment houses and bear the cost, so it is difficult to deem that the sale price of the housing site for the road site was included in the upper limit of the sale price, and there is no error in the misapprehension of legal principles as to the site cost, which constitutes the upper limit of the sale price, as alleged in the ground of appeal.

2. As to the ground of appeal No. 2 by Law Firm Barun and the ground of appeal No. 1 and No. 2 by Law Firm Youngjin

A. Article 38-2(1) of the former Housing Act (amended by Act No. 9405, Feb. 3, 2009; hereinafter “former Housing Act”) provides that “multi-family housing supplied by a project proprietor to the general public pursuant to the provisions of Article 38 shall be supplied below the sale price calculated in accordance with the standards prescribed in this Article. In this case, the sale price shall be composed of housing site expenses and construction costs, specific details, calculation method, appraisal institution selection method, etc. shall be prescribed by Ordinance of the Ministry of Land, Transport and Maritime Affairs.” Article 38-2(2) and (3) provides for the methods of calculating housing site expenses and construction costs, which are the constituent element of the sale price of the above paragraph (1). The purpose of the provision is to reasonably determine the sale price of multi-family housing in accordance with the standards prescribed by Ordinance of the Ministry of Land, Transport and Maritime Affairs, which constitutes the total sale price as well as the individual items of housing site expenses and construction costs, which constitute the upper limit of the sale price of multi-family housing (hereinafter “the upper limit”) to be determined”).

Therefore, in full view of all these points, if a business entity supplies multi-family housing by determining the actual sale price below the upper limit amount calculated according to the standards prescribed in Article 38-2 of the former Housing Act, it shall be deemed that the sales price under Article 38-2 of the former Housing Act is complied with. Barring any other special circumstances, it shall not be deemed that the amount by item of housing site expenses or construction expenses, which constitutes the actual sale price of multi-family housing, exceeds the upper limit amount by item of housing site expenses or construction expenses calculated according to Article 38-2 of the former Housing Act.

As long as the total purchase price of the apartment of this case is determined within the upper limit of the upper limit of the sale price, it is difficult to view that the apartment of this case violated the upper limit of the selling price solely on the grounds that any item exceeds the corresponding item by comparison with the item, and on the ground that there is a little difference in its details, it cannot be deemed that the business entity deceivings the buyer, or caused an error in concluding a contract. Such determination by the lower court is justifiable in accordance

B. Upon examining the reasoning of the judgment below in light of the records, the court below acknowledged the facts as stated in its reasoning after compiling the adopted evidence, and stated value added tax separately from the site price and building price in the item column of the sales contract. However, such circumstance alone is insufficient to recognize that the defendant unfairly charged value-added tax exempted to the plaintiffs including the sale price, and there is no other evidence to acknowledge it. According to evidence, it is just to determine that the total sale price in the item column of the sales contract of this case is merely divided into the "site price", "building price", and "value-added tax".

In addition, since the construction cost among the constituent elements of the basic type of construction cost was calculated based on the Act on Contracts to Which the State is a Party, the lower court asserts that the Defendant recognized that the Defendant would take a heavy interest exceeding the profit recognized by the said Act through the instant apartment complex even though the profit of the project undertaker is not recognized pursuant to the said Act. However, on the ground that the detailed items of the construction cost were determined based on the Act on Contracts to which the State is a Party, etc. among the ground floor construction cost for the basic type of construction cost determined and publicly notified by the Minister of Land, Transport and Maritime Affairs pursuant to Article 38-2 (3) of the former Housing Act, it cannot be deemed that the actual sales price determined by the project undertaker should not be included in the sales price, which

C. Therefore, the court below did not err by misapprehending the legal principles on the sales price ceiling system under the former Housing Act or by misapprehending the legal principles on the cancellation of declaration of intent.

3. As to the ground of appeal No. 3 by law firm Barun

According to Article 38-2(1) and (3) of the former Housing Act, and Article 7(2) and (3) of the former Rules on the Calculation, etc. of Sales Price of Multi-Family Housing (amended by Ordinance of the Ministry of Land, Transport and Maritime Affairs No. 27 of Jun. 30, 2008), the basic type construction costs and additional construction costs (No. 2008-888 of the Ministry of Construction and Transportation’s notification) constitute ground floor construction costs and underground floor construction costs. The ground floor construction costs are calculated by multiplying the unit price of the ground floor per square meter corresponding to the highest number of floors for each exclusive residential area by the housing supply area. The underground floor construction costs should be calculated by multiplying the unit price of the underground floor per square meter for each exclusive residential area by the underground floor area.

According to the reasoning of the judgment below, in calculating the basic type building cost of the apartment of this case, the court below determined that among the apartment of this case, the construction cost of the ground floor is 78,165.51 square meters and calculated the basic type building cost by applying the publicly notified price for the apartment of this case. The above area is the same as the total area of the above ground floor (11,283.7606 square meters on each ground floor of 101 to 103, 103, 104 to 107, 11,078.560 square meters on each ground floor of 11,07,078.560 square meters on each ground floor) of the apartment of this case except the neighborhood living facilities among the apartment of this case, the construction cost of the neighborhood living facilities was not calculated.

In light of the above-related statutes and the records, the above determination by the court below that the basic type construction cost of the apartment of this case does not include the part concerning the neighborhood living facilities among the upper limit of the apartment sale price is just and there is no violation of the rules of evidence and misapprehension of the legal principles concerning the calculation of the basic type construction

4. As to the ground of appeal No. 4 by Law Firm Barun and ground of appeal No. 4 by Law Firm Youngjin

Even if there is an error of omission in judgment as to the party's assertion, it shall not affect the conclusion of the judgment if it is obvious that such assertion is rejected (see Supreme Court Decision 2002Da56116, Dec. 26, 2002, etc.).

Meanwhile, comprehensively taking account of the provisions of Article 38-2(1) and (3) of the former Housing Act, apartment houses supplied by a project proprietor to the general public pursuant to the provisions of Article 38-2 of the same Act shall be supplied below the upper limit of the sales price calculated according to the standards prescribed by Article 38-2 of the same Act, which consists of housing site and construction costs. Among them, construction costs shall be calculated by adding to the basic type construction cost determined and publicly notified by the Minister of Land, Transport and Maritime Affairs as prescribed by Ordinance of the Ministry of Land, Transport and Maritime Affairs. However, the basic type construction cost forming the upper limit of sales price is determined by taking into account the characteristics of construction costs, such as quality of various facilities installed in apartment houses, construction environment, labor costs, and raw materials prices, taking into account the characteristics of construction costs that vary depending on various circumstances such as the quality of

According to the records, the expenses for the preservation registration of the building are included in the expenses for the construction of the ground floor among the construction expenses for the fourth floor among the construction expenses for basic type. However, even if the acquisition tax and registration tax are exempted for the apartment of this case from the acquisition tax and registration tax under Article 21 (1) of the Incheon Metropolitan City Ordinance on Reduction and Exemption, the basic type construction expenses for the apartment of this case should be deducted from the construction expenses for the building preservation, and thus, the calculation of housing performance rating expenses connected to the basic type construction expenses should be changed accordingly, the court below did not make any judgment thereon. However, even if the apartment of this case are exempted from the acquisition tax and registration tax, as seen above, the basic type construction expenses for the upper limit of the sale price for the apartment of this case are determined and announced by the Minister of Land, Transport and Maritime Affairs, and there is no provision that exclude the expenses actually incurred in the construction of individual type construction in the basic type construction expenses publicly notified by the Minister of Land, Transport and Maritime Affairs, and there is no provision that reflects the basic type construction expenses for the construction of residential environment.

Therefore, since it is apparent that Plaintiff 42’s above assertion will be rejected, such omission of judgment by the court below cannot be deemed to affect the conclusion of the judgment.

5. As to the ground of appeal Nos. 5 through 7 of Law Firm Barun and the part concerning the additional construction cost among the ground of appeal No. 3 of Law Firm Young-jin

A. The part concerning landscape expenses

In order to include the expenses to be added to the approval of the housing construction project plan in the construction cost addition, the person authorized to approve the project plan shall obtain approval for the expenses included in the project plan from the person authorized to approve the project plan. In this case, conditions for the landscape cost are added, and there was no approval for the cost, so the ground of appeal on the ground that the landscape cost cannot be added to the construction cost is first asserted in the final appeal,

B. Parts related to welfare facilities exceeding the statutory minimum standard area

Article 38(1) and (3) of the former Housing Act provides that the construction cost shall be calculated by adding the construction cost to the basic type construction cost determined and publicly notified by the Minister of Land, Transport and Maritime Affairs, among the items constituting the upper limit of the sale price. Article 14(2) [Attachment 1] [Attachment 4] of the former Rules on the Calculation, etc. of Sale Price of Multi-Family Housing (amended by Ordinance of the Ministry of Land, Transport and Maritime Affairs No. 226, Mar. 4, 2010; hereinafter the same shall apply) provides that the “construction cost” of welfare facilities installed in excess of the statutory minimum standard area shall be added to the basic type construction cost. Article 38-4(1) of the Housing Act, Article 42-5 subparag. 1 of the Enforcement Decree of the Housing Act provides that the Sales Price Examination Committee shall deliberate on the appropriateness of the sale price under Article 38-2(1) of the former Housing Act. Therefore, the construction cost incurred by a welfare facility in excess of the statutory minimum standard area may be calculated as the construction cost within the scope that is reasonable.

Therefore, the above ground of appeal on the premise that the cost of installing welfare facilities exceeding the statutory minimum standard area should be calculated as additional cost based on the construction cost on the ground floor among the basic building cost, is without merit, and the court below did not err by violating the rules of evidence or by misapprehending the legal principles on the calculation of additional construction cost, etc. as alleged in the above ground of appeal.

C. The part related to the cost of installing the teletic facility

Article 14(2) [Attached Table 1] 5 of the former Rules on the Calculation, etc. of Sale Price of Multi-Family Housing provides that "additional costs incurred in the installation of a telecom system (limited to home network, air-combined air-conditioning pipe pipe, air-conditioning cleaning system, integrated cleaning system, and high-speed telecommunications special class)" with additional construction costs. Thus, additional costs incurred in the installation of a telecom system shall be recognized only for 4 facilities of high-speed communications special class 4 facilities.

According to the evidence duly admitted by the court below, when calculating the maximum price of the instant sales price, the Defendant: (a) divided the installation cost of the tele-verification facility into KRW 158,548,00; (b) KRW 3,138,367,00; and (c) KRW 1,320,705,00; and (c) obtained approval for additional construction cost by the Home Network Special Grade 1,320,705,00; (b) however, it is difficult to establish uniform standard by combining the home network with super-high speed information and communication, street engineering, various service equipment, and building environment; (c) however, the Defendant generally refers to the infrastructure of residential buildings for the ubiquitous society in which various services are provided without being exposed to equipment, time, and location; and (d) it can be known that the home network system category includes remote inspection services.

Examining the legal principles as seen earlier in light of the aforementioned factual basis, the aforementioned “distance-Monitoring Facility” added by KRW 158,548,00 to the installation cost of the instant case is included in the “ Home Network” among the artificial telecom equipment that can be recognized as the additional construction cost by the said provision. However, even if all the evidence submitted to the lower court were collected, it does not seem to be any circumstance to acknowledge that the installation cost of the said “Remote-Monitoring Facility” overlaps with those of KRW 3,138,367,00, which was separately added thereto. Thus, the installation cost of the said “Remote-Monitoring Facility” is deemed as included in the additional construction cost, separate from the installation cost of the said “Tecom Network” in determining the maximum sale price of the instant case.

Therefore, although the reasoning of the lower court on this part is inappropriate, it is legitimate in its conclusion that rejected the Plaintiffs’ assertion on this part, and there is no error of law affecting the conclusion of the judgment.

D. Part of the erroneous determination of facts following the incomplete hearing on the additional construction costs of the law firm's field of construction costs

This part of the ground of appeal is without merit, and is not acceptable, to the purport that it interferes with the selection of evidence and fact-finding.

6. As to the part related to No. 2008-888 of the Ministry of Construction and Transportation’s notice among the third grounds for appeal by the law firm Youngjin

According to the reasoning of the judgment below, the court below determined that Article 2 of the former Rules on the Calculation, etc. of Sale Price of Multi-family Housing in the case of a local government-invested public corporation identical to the defendant, the time at which the announcement of invitation of occupants was made, and Article 14 of the same Rule, the basic type construction cost in calculating construction cost in the case of a local government-invested public corporation identical to the defendant, refers to the basic type construction cost publicly notified at the nearest date on the date of the announcement of invitation of occupants, and the Addenda of Article 2008-888 of the Ministry of Construction and Transportation Notice of the Ministry of Construction and Transportation (No. 208-88 of the Ministry of Construction and Transportation) provides that "this public notice shall enter into force on February 1, 2008, and it shall apply to the portion for which the project operator applied for approval of the invitation of occupants after the enforcement date,

Examining the facts acknowledged by the court below in light of Article 38-2 (1) and (3) of the former Housing Act, and Articles 2 and 14 (1) of the former Rules on the Calculation, etc. of Sale Price of Multi-Family Housing, the judgment of the court below that applied Article 208-8888 of the above Ministry of Construction and Transportation to the construction cost of the apartment of this case is just and there is no error of law as otherwise alleged

7. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

[Attachment] List of Plaintiffs: omitted

Justices Yang Chang-soo (Presiding Justice)