The council of occupants' representatives (Attorneys Park Hong-soo et al., Counsel for the plaintiff-appellant)

Korea National Housing Corporation (Law Firm, Attorneys White-soo et al., Counsel for the plaintiff-appellant)

June 1, 2007

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The defendant shall pay to the plaintiff 798,751,676 won with 5% interest per annum from the next day of the service of the complaint of this case to the day of service of the written application for modification of the claim and the cause of the claim of this case, and 20% interest per annum from the next day to the day of full payment.

1. Basic facts

The following facts are not disputed between the parties, or may be acknowledged by adding to the whole purport of the pleadings as a result of the appraisal by Nonparty 1, an appraiser Nos. 1 and 3 and an appraiser No. 1.

A. The Plaintiff is an autonomous management organization composed of representatives from each building of 525 households (name of complex omitted) located in Taeju-dong, Taeju-si (hereinafter “instant apartment”). The Defendant is a project proprietor who constructed and sold the said apartment.

B. The defendant had undergone a pre-use inspection on May 16, 1997 on the apartment of this case by the competent authority, and around that time, the occupancy of residents was completed.

C. Meanwhile, after the Defendant newly constructed and sold the instant apartment, defects have occurred in the common areas of the instant apartment, such as building outer walls, stairs rooms, corridors, flooring floors, waterproof spons, Dong walls and underground walls and floors, etc., and there still remains any defects up to now. The Plaintiff filed the instant lawsuit on July 5, 2005 in order to receive damages in lieu of defect repairs from the Defendant.

D. On December 14, 2006, the sectional owners of 439 households, among the 525 households of the instant apartment, transferred to the Plaintiff the right to claim damages in lieu of defect repairs (83.62%) and the notification of the assignment of claims at around that time reached the Defendant.

2. The assertion and judgment

A. The parties' assertion

The plaintiff asserts that the defendant is liable to pay the cost of repairing the defects and the damages for delay to the plaintiff as compensation in lieu of the defect repair, on the ground that the defendant's construction and sale of the apartment of this case had been arbitrarily modified or executed differently from the design drawing at the time of approval of the business, or caused the defects corresponding to the 1,2,3,5,10 years of the defect repair liability period, and the total cost of 798,751,676 won of the apartment of this case (including the cost of repairing the defects before the use inspection, and the total cost of repairing costs corresponding to the 955,216,069 won of the damage compensation in lieu of the defect repair acquired by the plaintiff).

In regard to this, the Defendant asserts that the defect liability period of the instant apartment was 1 to 3 years (1, 2, 3, and 5 years, and that the defect liability period of the instant apartment was 1 to 1, 2, 3, and 5 years, as the defect liability period was completed, and that the remuneration was completed for the defect liability period of not more than 5 years, since the Plaintiff issued a certificate of termination of the defect liability (No. 1 to 3, and No. 2-1 to 5) from the Plaintiff.

B. Determination as to the period of warranty liability for defects occurring in the apartment of this case

1) Parties’ assertion

The plaintiff asserts that if the above defects occurred before and after the use inspection of the apartment in this case, if the sectional owners exercise the right to claim damages in lieu of the defect repair against the defendant, the period of warranty liability for all of 10 years shall apply regardless of the type and content of the construction in accordance with Article 9 (1) of the Aggregate Buildings Act and Article 671 of the Civil Act, and that the same applies to the case in this case claimed by the plaintiff who was acquired the right to claim damages from the sectional owners, even if there exists such defects as alleged by the plaintiff, the scope of the liability for defect repair should be determined in accordance with the amended Housing Act and the Aggregate Buildings Act as amended on May 26, 2005.

2) Applicable statutes and interpretation

A) On May 26, 2005, the Acts and subordinate statutes applicable to the warranty liability of the apartment house before the amendment of the Housing Act and the Aggregate Buildings Act and the defect repairs and the interpretation thereof.

(1) Relevant provisions

① Article 9(1) of the former Act on the Ownership and Management of Aggregate Buildings (amended by Act No. 7502, May 26, 2005; hereinafter “former Act”) provides that the provisions of Articles 667 through 671 of the Civil Act shall apply mutatis mutandis to the warranty liability of a person who constructed and sold a building, and the provisions of paragraph (2) provide that a special agreement unfavorable to a purchaser than the provisions of the Civil Act with respect to the warranty liability of a seller under paragraph (1) shall be null and void, and Article 6 of the Addenda of the Housing Construction Promotion Act provides that the special provisions of Article 9(1) of the Housing Construction Promotion Act on the method and criteria for the management of aggregate housing shall be effective unless it conflicts with this Act and it infringes on the basic rights

② Article 38(14) of the former Housing Construction Promotion Act (amended by Act No. 6916, May 29, 2003; hereinafter the same shall apply) provides that a business entity is responsible for repairing defects in multi-family housing under the conditions as prescribed by the Presidential Decree. Accordingly, Article 16(1) of the former Decree on the Management of Multi-Family Housing ( repealed by Presidential Decree No. 18146, Nov. 29, 2003; hereinafter the same shall apply) provides that the defect repair period for multi-family housing, etc. shall be at least two years for major facilities from the date of inspection of use, and one year for other facilities shall be the same as attached Table 7 for the main facilities subject to defect repair and the period of classification and scope of other facilities. Attached Table 7 stipulates that the defect repair period of each year through three years shall be the defect repair period of each facility divided into 17 facilities and shall be the defect repair period of each year, regardless of the same classification as those in the remarks column.

③ In addition, with respect to damages, the former Housing Construction Promotion Act provides that the project owner and the project owner pursuant to the provisions of Article 38(16) through (14) shall repair the apartment house within the scope of 10 years in the event of serious defects in the portions of proof-stress structure of the apartment house, and shall compensate for damages therefrom. In this case, the defect repair period and the scope of defects by structure shall be determined by the Presidential Decree. Accordingly, the defect repair period and the scope of defects under the provisions of Article 16-2(1) of the former Decree on the Management of Multi-Family Housing shall be limited to 10 years in the case of columns, load bearing walls (excluding artificial walls, etc. which do not have power), and 5 years in the case of beams, floors, floors, and roof, and the scope of defects shall be limited to the case where the apartment house concerned is collapsed and it is determined that the relevant apartment house is likely to collapse as a result of safety diagnosis due to defects

(2) Former interpretation of the relevant provisions

Before the revision of the former Housing Construction Promotion Act, the number of buyers of an aggregate building could be liable for warranty against the project proprietor for ten years pursuant to the provisions of Article 671 of the Civil Act, which shall apply mutatis mutandis under Article 9 of the Aggregate Buildings Act, notwithstanding the provisions mentioned above under the former Housing Construction Promotion Act. Also, since such defects are not limited to serious defects, the provisions under the former Housing Construction Promotion Act and the former Decree on the Management of Multi-Family Housing set the standards for prompt repair of defects at the administrative level, such as the procedure, method, and period of defect repair, and the defect repair under the former Housing Construction Promotion Act, even in cases of seeking defect repair based on the former Housing Construction Promotion Act, it is necessary to provide that the defect repair liability of the same 20-year unit under Article 38(14) of the former Decree on the Management of Multi-Family Housing, which provides that the defect repair liability of the said multi-family housing shall be limited to 10-year unit or 5-year unit, it shall not be limited to cases where multi-family housing has collapse or is likely to collapse.

B) Acts and subordinate statutes applicable to the warranty liability of multi-family housing and the repair of defects after the revision of the Housing Act on May 26, 2005 and interpretation thereof

(1) Relevant provisions

(1) The Housing Act (amended by Act No. 7520 of May 26, 2005) provides that the repairs of defects shall be applied mutatis mutandis to the warranty liability for the sale of a building, and Article 46(1) provides that Article 9 of the Aggregate Buildings Act, which provides that the provisions of Articles 67 through 671 of the Civil Act shall apply mutatis mutandis to the warranty liability for the sale of a building, shall be applied mutatis mutandis to the project operator, notwithstanding the provisions of Article 9 of the same Act, where any defects prescribed by Presidential Decree, such as rupture, subsidence, damage, etc. due to a mistake in construction, within the warranty liability period prescribed by Presidential Decree, within the scope of not more than ten years for each proof-stress structure or each installation work of a collective housing from the date of inspection on the use of a collective housing under Article 18 of the Building Act or from the date of approval on the use of a collective housing under Article 18 of the same Act, the project operator shall be liable to compensate for damages caused by a defect.

(2) Article 59(1) of the Enforcement Decree of the Housing Act under the amended Housing Act provides that the scope of defects under Article 46(1) of the Act, the defect liability period for each load-bearing structure and each load-bearing structure construction work, etc. shall be as specified in the attached Tables 6 and 7. The attached Table 6 provides that the scope of defects shall be determined as defects to the extent that the functions, pipes or safety of the building or facilities are likely to be impeded due to a rupture, rupture, rupture, breakage, collapse, collapse, leakage, malfunction, malfunction, malfunction or malfunction, defect in the operation or function due to a defect in the construction work, defect in attached, rupture, rupture, etc., and the defect liability period for each load-bearing structure shall be determined by dividing the facility into 17 parts and 17 parts, and the attached Table 7 provides that the scope of defects subject to defect liability by load-bearing structure and 5-year load bearing walls shall not be limited to cases where the relevant multi-family building is collapse or r.

③ From the date of promulgation of Article 1 of the Addenda of the Housing Act, the provisions of Article 46 of the Housing Act shall apply to the usage inspection under Article 29 of the Housing Act or the liability for warranty and repair of defects of the apartment houses for which the approval of use under Article 18 of the Building Act has been obtained prior to the enforcement of this Act, and Article 6 of the Addenda of the Housing Act (amended by Act No. 7502 of May 26, 2005) shall be effective to the extent that the special provisions of the Housing Act on the method and standard for management of collective housing are not detrimental to this Act to the extent that it does not infringe the basic rights of sectional owners, but with respect to warranty liability and repair of defects of collective housing, it shall be in accordance with the provisions of Article 46 of the Housing Act.

(2) Interpretation of the current Housing Act and the Aggregate Buildings Act

In comparison with the revised Housing Act and the former related laws, it seems that the contents of Article 38(14) and (16) of the former Housing Construction Promotion Act and Article 16(1) and (3) of the former Decree on the Management of Multi-Family Housing and Article 16-2(1) of the former Decree on the Management of Multi-Family Housing do not overlap with those of the amended Housing Act and Articles 59(1) and 62 of the Enforcement Decree thereof.

However, as seen earlier, the supplementary provisions of the amended Housing Act explicitly excludes the application of the provisions of Articles 67 through 671 of the Civil Act and Article 46 of the Housing Act, which are applied mutatis mutandis to the warranty liability and the repair of defects, to the apartment houses for which the inspection of use or the approval of use was obtained prior to the enforcement of the above Act, and the provisions of Article 46 of the amended Housing Act are applied to the warranty liability and the repair of defects in the aggregate buildings. Therefore, the amended Housing Act and the Aggregate Buildings Act clearly excludes the application of the provisions of Article 667 through 671 of the Civil Act, which are applied mutatis mutandis by the Aggregate Buildings Act and Article 66 of the Civil Act as to the warranty liability and the repair of defects in the apartment houses.

On the other hand, Article 59(1) of the Enforcement Decree of the Housing Act under the amended Housing Act provides for the scope of and warranty period for defects for which a business proprietor is liable for repair under attached Tables 6 and 7. Unlike attached Table 7 of the former Decree on the Management of Multi-Family Housing, the attached Table 6 provides only 1, 2, and 3 primary defects for the attached Table 6, and limits liability for repair only for the limited amount of 5 and 10 years defects for the 5 and 10-year defect for the 5 and 10-year defect for the 5 and 10-year defect for the 10-year defect for the 10-year defect for the 5-year defect for the 5 to 10-year defect for the 5-year defect for all the 5-year defect.

3) Sub-determination

Therefore, even if the plaintiff can claim damages in lieu of the defendant due to the transfer of the right to claim damages against the defendant from each owner of the apartment in this case from each owner of the apartment in this case, Article 46 of the Housing Act and Article 59 (1) of the Enforcement Decree thereof shall apply to the scope or period of the warranty liability under Article 6 of the Addenda to the Aggregate Buildings Act as mentioned above, and Article 59 (1) of the Enforcement Decree thereof shall apply to the scope or period of the warranty liability as mentioned above. In addition to the whole purport of the argument of the appraiser non-party 1's appraisal of defects, it seems that the defects in the proof of the proof of the proof of the proof of defects in the apartment in this case in this case are not likely to collapse the apartment in this case. Since there is no other evidence to support this, the plaintiff's assertion that the defect in the proof of the five-year and the ten-year defect in this case can be claimed as the defect in this part, and it can not be claimed as the defect in the Housing Act prior to the date of the inspection for the use.

C. Determination as to the existence of a claim for damages

1) According to the above-mentioned facts and the interpretation of the above-mentioned relevant statutes, the defendant shall be liable to the plaintiff for damages caused by the defects of the apartment in this case as prescribed by the Housing Act and its Enforcement Decree.

2) Meanwhile, according to the Housing Act and its Enforcement Decree, occupants' representatives' representatives' representatives' representatives' representatives' representatives' representatives' representatives' representatives' representatives' or management entities' representatives' representatives' representatives can demand the project owner to repair defects that have occurred within a period of one to three years (five or ten years if apartment houses are likely to collapse or collapse due to a defect in the proof structure) according to the contents of the construction and the type of defect. The above period refers to "the period of the defect occurrence" and it does not mean the duration of the defect repair obligation. Thus, even if the above period is different, the defect liability still remains until the expiration of the extinctive prescription period. However, the defendant's assertion that the defect occurred within 1 to 3 years' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' unit units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units' units'.

Therefore, the defendant is obligated to pay damages to the plaintiff on the part that can be assessed as the three-year defect among the defects of the apartment of this case.

D. Determination as to the completion of extinctive prescription

Since the defendant's defense that the right to claim damages of this case had expired due to the completion of prescription, it is clear that the plaintiff could exercise the above right to claim from May 17, 200, the day following the above three-year period of warranty liability, since the fact that the plaintiff was on May 16, 1997, which was the date of usage inspection of the apartment of this case, was as seen above. The defendant's act of selling the apartment of this case to the buyer constitutes a commercial activity, and the damages liability based on the non-performance of the obligation arising therefrom is also subject to the five-year commercial extinctive prescription. The plaintiff's right to claim damages from each sectional owner of the apartment of this case was transferred from May 17, 200, which was five years after the expiration of the above five-year extinctive prescription period. Thus, the plaintiff's right to claim damages of this case due to the defects of the above three-year period has expired due to the completion of prescription, and the above defendant's defense has merit.

4. Conclusion

Therefore, the plaintiff's claim for damages of this case, which is premised on the defendant's responsibility to repair the defects existing in the apartment of this case, is dismissed without any justifiable reason. It is so decided as per Disposition.

Judges Lee Dong-young (Presiding Justice) (Presiding Justice) and Kim Jong-young