[1] The scope of the application of Article 6 (amended by Act No. 7502 of May 26, 2005) of the Addenda to the Act on Ownership and Management of Condominium Buildings (amended by Act No. 7502 of April 10, 1984) (amended by Act No. 7502 of May 26, 2005) to warranty liability and repair of defects of multi-family housing (=multi-family housing subject to usage inspection or use approval after May

[2] In a case where the liability for warranty and defect repair of an apartment that had undergone a pre-use inspection before May 26, 2005 were at issue, the case holding that the former Housing Construction Promotion Act, which was the previous provision that had been in force at the time of the pre-use inspection, the former Housing Construction Promotion Act, the former Decree on the Ownership and Management

[3] Where the council of occupants' representatives requests the business entity which constructed and sold the apartment house, whether the council of occupants' representatives can be deemed to exercise the right to claim damages in lieu of the defect repair on behalf of the sectional owners (negative in principle)

[4] In a case where the council of occupants' representatives filed a lawsuit under the premise that the council of occupants' representatives has a right to claim damages in lieu of the defect repair under Article 9 of the former Act on the Ownership and Management of Aggregate Buildings, but subsequently added the claim for damages by assignment of claims to the sectional owners on the ground that the above right to claim damages was transferred, and thereafter the company added the claim for damages by assignment of claims to the sectional owners, the case holding that the council of occupants' representatives cannot be concluded to exercise the above right to claim damages on behalf of the sectional owners merely because the council of occupants' representatives

[1] Article 46(1) of the Housing Act (amended by Act No. 7520 of May 26, 2005) provides that "any project proprietor shall be liable to repair defects arising in collective housing as prescribed by the Housing Act, notwithstanding the provisions of Articles 67 through 671 of the Civil Act, with respect to the warranty liability for the sale of aggregate buildings," and Article 46(3) of the Addenda of the Housing Act provides that "the above provisions of Article 46 of the Housing Act shall apply to the warranty liability for collective housing and the defect repair for which the inspection or approval for use was obtained before the enforcement of the amended Housing Act, and Article 750 of the Addenda of the Housing Act (amended by Act No. 7502 of May 26, 2005) shall be deemed as unconstitutional, and Article 26 of the Act on Ownership and Management of Aggregate Buildings (amended by Act No. 7501 of Apr. 10, 1984) shall also be deemed as unconstitutional and unconstitutional. 5065 of the amended Housing Act.

[2] In a case where the liability for warranty and defect repair of an apartment that had undergone a pre-use inspection on or before May 26, 2005 were at issue, the case holding that the former Housing Construction Promotion Act (amended by Act No. 4723 of Jan. 7, 1994), the former Decree on the Management of Multi-Family Housing (amended by Presidential Decree No. 14014 of Dec. 2, 1993), and the former Act on the Ownership and Management of Aggregate Buildings (amended by Act No. 6925 of Jul. 18, 2003) shall apply to the warranty liability and defect repair of such apartment

[3] The right to demand a repair of defects by the council of occupants' representatives under Article 9 of the former Act on the Ownership and Management of Aggregate Buildings (amended by Act No. 6925 of Jul. 18, 2003) and Article 38 (14) of the former Housing Construction Promotion Act (amended by Act No. 4723 of Jan. 7, 1994) and Article 16 (2) of the former Decree on the Management of Aggregate Buildings (amended by Presidential Decree No. 14014 of Dec. 2, 1993) are completely different rights from each other. Thus, the right to demand a repair of defects by the council of occupants' representatives to the business owner who constructed and sold the apartment house cannot be deemed to exercise the right to demand a repair of defects, i.e., the right to demand a compensation for damages in lieu of defect repairs, unless there are special circumstances. Moreover, even if the business owner approved the liability of the council of occupants' representatives under the former Housing Construction Promotion Act and the former Decree on the Management of Aggregate Buildings, it cannot be deemed as a project owner.

[4] In a case where the council of occupants' representatives of apartment houses filed a lawsuit seeking damages on the premise that it has a right to claim damages in lieu of defect repairs under Article 9 of the former Act on the Ownership and Management of Aggregate Buildings, but subsequently added the claim for damages by the transfer of claims to the sectional owners on the ground that it was transferred the above right to claim damages, and thereafter the construction company made a preliminary objection to the exclusion period and defense of the right to claim damages transferred by the construction company, the case holding that the court below erred by misapprehending legal principles as to the exercise of the right to claim damages in lieu of defect repairs on behalf of the sectional owners on the ground that the council of occupants' representatives held that the council of occupants' representatives has exercised the right to claim damages in lieu of defect repairs on behalf of the construction company.

[1] Article 46(1) of the former Housing Act (amended by Act No. 7600, Jul. 13, 2005); Article 46(3) of the Addenda (amended by Act No. 76, May 26, 2005) (amended by Act No. 10237, Apr. 10, 201); Article 6(1) of the former Housing Construction Promotion Act (amended by Act No. 7502, May 26, 2005); Article 46(1) of the former Housing Construction Promotion Act (amended by Act No. 974, Apr. 26, 2005); Article 9 of the Addenda (amended by Act No. 7501, Jul. 13, 2005) (amended by Act No. 9741, May 26, 2005); Article 96(1) of the former Housing Construction Promotion Act (amended by Act No. 7502, Apr. 16, 2005)

Plaintiff (Attorney Park Hong-hoon et al., Counsel for the plaintiff-appellant)

Korea Land and Housing Corporation (Attorney Kim Jong-soo, Counsel for the plaintiff-appellant)

Enzym Construction Corporation

Supreme Court Decision 2006Da40430 Decided April 24, 2008

Seoul High Court Decision 2008Na44179 decided April 23, 2009

The part of the lower judgment against the Defendant regarding the ancillary claim is reversed, and that part of the case is remanded to the Seoul High Court.

The grounds of appeal are examined.

1. Applicable Acts related to the defect repair of the apartment of this case

Article 46(1) of the amended Housing Act (amended by Act No. 7520 of May 26, 2005; hereinafter the same) provides that "a project proprietor shall be responsible for repairing defects that occur in multi-family housing as prescribed by the Housing Act, notwithstanding the provisions of Articles 9 of the Act on the Ownership and Management of Aggregate Buildings, to which Articles 67 through 671 of the Civil Act shall apply mutatis mutandis with respect to the liability for warranty arising from the sale of multi-family housing," and Article 46(3) of the Addenda provides that "the amended provisions of Article 46 of the Housing Act shall apply with respect to the liability for warranty and repair of defects in multi-family housing for which usage inspection or approval for use has been obtained prior to the enforcement of the amended Housing Act," and Article 6 of the Addenda to the amended Housing Act (amended by Act No. 7502 of May 26, 2005; hereinafter the amended Aggregate Buildings Act) shall also be subject to the provisions of Article 46 of the Housing Act."

However, Paragraph (3) of the Addenda to the amended Housing Act was amended by the Constitutional Court en banc Decision 2005Hun-Ga16, July 31, 2008, which declared that it was unconstitutional and null and void by the Constitutional Court en banc Decision 2005Hun-Ga16, and thereafter, the aforementioned Addenda provision was amended by Act No. 10237, April 5, 2010, stating that “The liability for warranty and defect repair of multi-family housing for which a pre-use inspection or use approval has been obtained prior to the enforcement of the amended Housing Act shall be governed by the previous provision, notwithstanding the amended provisions of Article 46.” In light of the purport, the amendment process, and the protection of trust and fairness, Article 6 of the Addenda to the amended Housing Act shall be deemed to apply only to multi-family housing for which a pre-use inspection or use approval has been obtained after May 26, 2005.

Therefore, notwithstanding Article 6 of the Addenda to the amended Aggregate Building Act, the former provisions are still applicable to the warranty liability and repair of defects of the apartment house for which a pre-use inspection or use approval was made before May 26, 2005 (see Supreme Court Decisions 2008Da12491, Dec. 11, 2008; 2008Da12507, Jan. 30, 2009; 2007Da83908, Feb. 26, 2009; 2007Da83908, Nov. 5, 1993, before the amended Aggregate Building Act enters into force, the former Housing Construction Promotion Act (amended by Presidential Decree No. 12534, Nov. 26, 2009; hereinafter the same shall apply). As to the warranty liability and defect repair of the apartment house of this case, the former provisions of the Housing Construction Promotion Act, which were in force at the time of the instant apartment.

2. Whether the exclusion period of the right to claim damages in lieu of defect repairs under the former Aggregate Buildings Act is expired;

A. Based on the evidence adopted, the court below rejected the plaintiff's claim for damages compensation against the owner of the instant apartment until December 1993, since the defendant, who was the business proprietor who newly built and sold the instant apartment, completed the transfer of the instant apartment to the owner of the instant apartment until December 1993. However, the plaintiff, the council of occupants' representatives, which was the representative of the defendant's representatives, demanded several repairs on several occasions, including the defendant and the defendant joining the defendant. Accordingly, even if the plaintiff prepared and received a written confirmation of completion of the defect repair from the plaintiff after executing the defect repair, there still remains such defects as stated in the attached list of defects in the instant apartment, and on the premise that the plaintiff still has the right to damages compensation in lieu of the defect repair under Article 9 of the former Aggregate Buildings Act, which was first 6th of November 3, 2003, which was the first sectional owner's claim for the instant apartment building, and that the plaintiff's claim for damages compensation against the defendant's remaining in force before its remand on March 20, 20006th of the instant apartment.

B. However, it is difficult to accept the above determination by the court below for the following reasons.

According to the facts acknowledged by the lower court, it can be seen that all the subjects requesting the repair of defects to the Defendant, and preparing and delivering the certificate of completion of the repair are the Plaintiff who is the council of occupants’ representatives, and the owners of the instant apartment.

However, barring any special circumstance, the right to demand a repair of defects under Article 9 of the former Act on the Ownership and Management of Aggregate Buildings belongs to the owner of an aggregate building rather than the council of occupants' representatives. Article 38(14) of the former Housing Construction Promotion Act and Article 16(2) of the former Decree on the Management of Aggregate Buildings grant the council of occupants' representatives the right to demand a repair of defects to the project undertaker of the apartment house. However, this purpose is to set the criteria for prompt repair of defects as a warranty bond by determining the procedure, method, period, etc. of the repair of defects in the apartment house at an administrative level (see Supreme Court Decision 2008Da84229, Feb. 12, 2009). Since the right to demand a repair of defects and the right to demand a repair of defects by the owner of the apartment house are completely different from each other, barring any special circumstance, it cannot be deemed that the Plaintiff claimed a repair of defects against the Defendant, which is a right to demand a repair of defects in lieu of the defect repair.

Therefore, even if the Plaintiff demanded repair works to the construction company several times, such circumstance alone does not readily conclude that the Plaintiff exercised the right to claim damages in lieu of defect repair on behalf of the sectional owners, but should have deliberated on whether a sectional owner, other than the Plaintiff, exercised the right to claim damages in lieu of defect repair within 10 years from the time of delivery of the instant apartment, and determined whether the period of exclusion and defense of the Defendant was legitimate.

Nevertheless, the court below rejected the defendant's defense against the exclusion period of the defendant and partly accepted the plaintiff's claim for the transfer money of this case which was added as preliminaryly at the court below prior to remand. In so determining, the court below erred by misapprehending the legal principles on the exercise of the right to claim damages in lieu of defect repairs under Article 9 of the former Aggregate Buildings Act and the period of exclusion, which affected the conclusion of the judgment. The ground of appeal pointing this out is with merit.

3. Conclusion

Therefore, without examining the remaining grounds of appeal, the part against the Defendant regarding the conjunctive claim is reversed, and that part of the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Yang Chang-soo (Presiding Justice)