The meaning of "where a lessee fails to comply with conversion for sale in lots for at least six months after approval for conversion in lots" under Article 21 (7) of the former Rental Housing Act, and whether Article 21 (7) of the former Rental Housing Act applies in cases where a lessee who did not have preferential right to conversion in lots purchases a rental house residing by him/her in accordance with the procedures for conversion in lots or a third party purchases such rental house (negative)

Article 21 (1) of the former Rental Housing Act (amended by Act No. 11021, Aug. 4, 201; hereinafter “former Rental Housing Act”) provides, “Where a rental business operator purchases rental housing to be built with funding from the National Housing Fund or to be converted for sale on a housing site developed by a public project pursuant to Article 60 of the Housing Act among the housing constructed by him/her after the expiration of the mandatory rental period after obtaining approval for conversion for sale, the rental business operator shall make a conversion for sale on a preferential basis to any of the following lessees.” In addition, Article 21 (3) of the former Rental Housing Act provides, “Where he/she intends to convert rental housing pursuant to paragraph (1), he/she shall apply for approval for conversion for sale in lots to the head of a Si/Gun/Gu.” In such cases, the head of a Si/Gun/Gu shall grant approval within 30 days after receipt of an application for approval for conversion for sale in lots, and the head of a Si/Gun/Gu shall grant approval for sale in lots to a rental business operator under paragraph (4).”

Article 21(7) of the former Rental Housing Act provides that a lessee may purchase a rental house in a stable manner by guaranteeing a lessee’s preferential right to purchase a housing unit. In light of the legislative purport of the former Rental Housing Act and the structure of Article 21(7) of the former Rental Housing Act, the term “where a lessee fails to comply with conversion for sale for at least six months after approval for conversion for sale” referred to in Article 21(7) of the former Rental Housing Act means cases where a lessee who has the right to preferential right to purchase a housing unit fails to comply with conversion for sale for at least six months after approval for conversion for sale under Article 21(1) of the former Rental Housing Act is granted. Therefore, Article 21(7) of the former Rental Housing Act applies only to cases where a lessee who has the right to preferential right to purchase a housing unit sold to a third party by failing to comply with conversion for sale for at least six months. In other words, Article 21(7) of the former Rental Housing Act does not apply to cases where a lessee who did not have the right to preferential right

Article 21(1), (3), (4), (7), and (10) of the former Rental Housing Act (Amended by Act No. 11021, Aug. 4, 201)

Attached list 1 through 57, and 60 of the list of plaintiffs shall be as shown in the attached list.

Attached list Nos. 58 and 59 shall be listed in the list of plaintiffs.

61 to 110 of the [Attachment List] List of Plaintiffs (Law Firm Korea, Attorneys Kim Jong-chul et al., Counsel for the plaintiff-appellant)

Defendant (Law Firm Pyeongtaek, Attorneys Ahn Dai-hee et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2016Na2040932 decided March 17, 2017

All appeals are dismissed. Of the costs of appeal, the part arising between the plaintiffs and the defendant listed in the separate sheet Nos. 1 through 57, and 60 among the separate sheet of plaintiffs is borne by each party, and the part arising between the plaintiffs and the defendant listed in the separate sheet No. 58, 59 is borne by the defendant. The part arising between the plaintiffs and the defendant listed in the separate sheet No. 61 through 110 among the

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. As to the ground of appeal by the plaintiff 61 to 110

A. Article 21 of the former Rental Housing Act (amended by Act No. 11021, Aug. 4, 201; hereinafter “former Rental Housing Act”) provides, “Where a rental business operator constructs housing with funding from the National Housing Fund or constructs housing on a housing site developed by a public project after the expiration of the mandatory rental period with the approval of the project plan pursuant to Article 16 of the Housing Act, the rental business operator shall make a conversion to parcelling-out in preference to any of the following lessees,” and Article 21(1) of the former Rental Housing Act provides, “Where he/she intends to make a conversion into parcelling-out under paragraph (1), he/she shall apply for approval for conversion to parcelling-out to the head of a Si/Gun/Gu.” Furthermore, Article 21(4) of the former Rental Housing Act provides, “Where the head of a Si/Gun/Gu receives an application for approval for conversion to parcelling-out, the head of a Si/Gun/Gu shall grant approval within 30 days after receipt of an application for conversion to parcelling-out pursuant to paragraph (10).”

Article 21(7) of the former Rental Housing Act provides that a lessee may purchase a rental house in a stable manner by guaranteeing a lessee’s preferential right to purchase a housing unit. In light of the legislative purport of the former Rental Housing Act and the structure of Article 21(7) of the former Rental Housing Act, the term “where a lessee fails to comply with conversion for sale for at least six months after approval for conversion for sale” referred to in Article 21(7) of the former Rental Housing Act means cases where a lessee who has the right to preferential right to purchase a housing unit fails to comply with conversion for sale for at least six months after approval for conversion for sale under Article 21(1) of the former Rental Housing Act is granted. Therefore, Article 21(7) of the former Rental Housing Act applies only to cases where a lessee who has the right to preferential right to purchase a housing unit sold to a third party by failing to comply with conversion for sale for at least six months. In other words, Article 21(7) of the former Rental Housing Act does not apply to cases where a lessee who did not have the right to preferential right

B. Review of the reasoning of the lower judgment and the record reveals the following circumstances.

(1) The above plaintiffs did not have a lessee who has the right of preferential purchase conversion at the time that each of the instant apartment units, which is a rental house, was converted to sale in lots from the defendant.

(2) According to Article 21(7) of the former Rental Housing Act, the said Plaintiffs filed the instant lawsuit by asserting that “The sales price should be sold at the time of the sale of the leased housing to a third party; thus, the part exceeding the legitimate pre-sale conversion price calculated under the former Rental Housing Act and subordinate statutes should be returned to the Defendant.” Accordingly, the lower court rejected the said assertion on the ground that “the person who purchased the leased housing in a general sale procedure does not have the right to demand the rental business operator to comply with the pre-sale conversion price calculation standard under the former Rental Housing Act.” In the process, there was no assertion or proof as to the fact that each household that the said Plaintiffs purchased the leased housing in a preferential manner was sold to the said third party due to the lessee’s failure to comply with the pre-sale conversion

C. Examining the above legal principles in light of the above, Article 21 (7) of the former Rental Housing Act is not applicable to each of the relevant households of the apartment of this case that the above plaintiffs acquired conversion from the defendant for sale in lots. Thus, regardless of whether the above provision is a mandatory provision, the above plaintiffs cannot file a claim for return of unjust enrichment with the defendant under

Although the reasoning of the court below is somewhat inappropriate, the decision of the court below that did not recognize the above plaintiffs' right to claim the return of unjust enrichment based on Article 21 (7) of the former Rental Housing Act is just, and there is no error of law by misapprehending the legal principles on interpretation and application of Article 21 (7) of the former Rental Housing Act.

2. As to the grounds of appeal by Plaintiffs 1 through 57, and 60

The lower court determined that the Plaintiff 60’s assertion that the Defendant paid KRW 1 million in addition to the difference indicated in its holding and that the Defendant paid KRW 4 million to the Plaintiff’s claim for return of unjust enrichment was insufficient evidence to acknowledge this.

Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the said determination by the lower court is justifiable, and contrary to what is alleged in the grounds of appeal, there is no error of

3. As to the defendant's appeal

A. As to grounds of appeal Nos. 1 and 2

The lower court determined that the Defendant’s claim for return of unjust enrichment against the Plaintiff 1 through 60 in the instant lawsuit was unlawful, on the Defendant’s main defense that the part of the claim for return of unjust enrichment by the said Plaintiffs in the instant lawsuit was unlawful, despite the fact that the said Plaintiffs agreed with the Defendant that they will not be held liable for the following civil and criminal liability with respect to be Vietnamed and expanded construction works when entering into each sales contract with the Defendant, the lower court did not deem such agreement to the effect that all of the claims for return of unjust enrichment in the event that the said agreement is null and void due

In light of the records, the above determination by the court below is just, and contrary to what is alleged in the grounds of appeal, there were no errors of exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or of misapprehending the legal principles on the interpretation of

B. Ground of appeal No. 3

The lower court rejected the Defendant’s assertion that approximately KRW 10 million received from the Plaintiff 1 through 60 should be excluded from the pre-sale conversion price, on the grounds that it was received as a consideration for the belar extension works, the mold and creative construction works, and thus, should be excluded from the pre-sale conversion price, on the grounds as indicated in its reasoning, determined that the aforementioned assertion was substantially included in the pre-sale conversion price.

In light of the records, the above determination by the court below is just, and contrary to what is alleged in the grounds of appeal, there were no errors by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal principles

4. Conclusion

Therefore, all appeals are dismissed, and the costs of appeal are assessed against each 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 Kwon Soon-il (Presiding Justice)