[1] The meaning of "market price" for sale where a project operator who intends to implement a housing construction project exercises a right to use the site among the housing construction sites, and exercises a right to demand sale under Article 22 of the Housing Act

[2] In a case where Party A’s regional housing association exercised a claim to sell an illegal land owned by Party B pursuant to Article 22 of the Housing Act, and the category of land is a ditch and the method of calculating the market price of the above land is at issue, the case holding that the lower court erred by misapprehending the legal doctrine, although the land category is a ditch and the current status of land is a part of the site for multi-family housing when the housing construction project promoted by Party A is implemented, the market price should be assessed at the same level as that of the neighboring site when the housing construction project is implemented, and it can be assessed at the same level in consideration of individual factors such as the form, size, etc. of the land

[1] A project undertaker who intends to implement a housing construction project may request the owner of a site which fails to secure a title to use the site among the housing construction sites to sell the site at the market price. Article 48 of the Act on Ownership and Management of Condominium Buildings shall apply mutatis mutandis to a claim for sale (Article 22 of the Housing Act). Here, the market price is an objective transaction price at the time when the right to request sale is exercised, which includes the price assessed on the premise that the housing construction project is implemented, i.e., the price that includes the

[2] In a case where the regional housing association Gap exercised a claim to sell illegal land owned by Eul pursuant to Article 22 of the Housing Act, and the category of land is a ditch and the method of calculating the market price of the above land is at issue, the case holding that the lower court erred by misapprehending the legal doctrine, although the land category is a ditch and the current status is a part of the site of multi-family housing when the housing construction project promoted by Gap association is implemented, the market price can be assessed at the same level as the neighboring site price when the housing construction project is implemented, and it can be assessed to reduce the market price in consideration of individual factors such as the form, area, etc., but it can be assessed to reflect the administrative conditions in the form of a ditch on the sole ground that the land category is a ditch, and the market price is calculated on the basis of the current land category and the current status

[1] Article 22 of the Housing Act, Article 48 (4) of the Act on the Ownership and Management of Aggregate Buildings / [2] Article 22 of the Housing Act, Article 48 (4) of the Act on the Ownership and Management of Aggregate Buildings

[1] Supreme Court Decision 2008Da21549, 21556, 21563 Decided March 26, 2009

Samsan District Housing Association (Law Firm Lossk et al., Counsel for the defendant-appellant)

Defendant 1 and two others (Law Firm Citro, Attorneys Kim Young-hun et al., Counsel for the defendant-appellant)

Busan High Court Decision 2018Na13830 decided May 2, 2019

The part of the lower judgment against Defendant 3 is reversed, and that part of the case is remanded to Busan High Court. All appeals by Defendants 1 and 2 are dismissed. The costs of appeal between the Plaintiff, Defendant 1 and Defendant 2 are assessed against Defendant 1 and Defendant 2.

The grounds of appeal are examined.

1. Claim on the calculation of the purchase price for the land owned by Defendant 3

A. A project operator who intends to implement a housing construction project may request the owner of a site which fails to secure a title to use the site among the housing construction sites to sell the site at the market price. Article 48 of the Act on Ownership and Management of Condominium Buildings shall apply mutatis mutandis to the claim for sale (Article 22 of the Housing Act). Here, the market price is an objective transaction price at the time when the right to request sale is exercised, which includes the price assessed on the premise that the housing construction project is implemented, i.e. the price that includes the development gains expected to occur due to the housing construction (see Supreme Court Decision 2008Da21549, 21556, 21563, Mar. 26, 2009, etc.)

B. (1) According to the reasoning of the lower judgment and the record of the instant case, the appraiser of the first instance assessed the market price of the instant third real estate in the following manner, and the lower court adopted such appraisal result and calculated the sales price for the instant third real estate.

The third real estate of this case is an irregular land, the land category of which is a ditch and the present state is a road. The street conditions among individual factors are superior to the comparative standard land in comparison with the land at Kimhae-si, the comparative standard land, and the access conditions, environmental conditions, and other conditions are similar. However, the land conditions (area, shape, etc.) are 0.65 and the administrative conditions (land category, etc.) are 0.5. The unit price is determined by taking into account the difference in individual factors (area 0.335) and the correction of other factors.

(2) However, the lower court’s determination is difficult to accept.

In light of the aforementioned legal principles, insofar as the category of real estate No. 3 in this case is a ditch and the current status is a road, if a housing construction project promoted by the Plaintiff becomes a part of the site of multi-family housing, such market value shall be assessed at the same level as the neighboring site price in the event that the housing construction project is implemented. However, in consideration of individual factors such as land conditions, such as the form, size, etc., such as the form and size, it can be assessed to be reduced (see, e.g., Supreme Court Decision 2014Da41698, Dec. 11, 2014). Considering the administrative condition as the land category is a ditch solely on the ground that the land category is a ditch

Nevertheless, the lower court’s adoption of the appraisal result as above and determination of the purchase price of the third real estate of this case is erroneous in the misapprehension of the legal doctrine regarding the computation of market price at the exercise of sale claim. The allegation contained in

2. The remaining grounds of appeal

A. The lower court determined as follows regarding the establishment of the Plaintiff’s claim for sale.

The Plaintiff secured the right to use more than 95% of the area of a housing construction site as prescribed by Article 22(1)1 of the Housing Act. The period between July 12, 2018, which is the date of appraisal of the market price of real estate by an appraiser of the first instance trial, and August 30, 2018, which is the date of conclusion of a sales contract between the Plaintiff and the Defendants, has a temporal interval, but there is no special circumstance to change the market price during that period. Therefore, the market price of each of the instant real estate as of August 30, 2018 is confirmed as the same as the market price on July 12, 2018.

B. Examining the reasoning of the lower judgment in light of the evidence duly admitted, the lower court did not err in its judgment by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by misapprehending the legal doctrine regarding interpretation of Article 22(1)1 of the Housing Act, method of market appraisal, or procedure for selecting appraiser, contrary to what is alleged in the grounds of appeal

3. Conclusion

The part of the lower judgment against Defendant 3 is reversed, and that part of the case is remanded to the lower court for further proceedings consistent with this Opinion, on account of the partial grounds of appeal by Defendant 3. The appeals by Defendants 1 and 2 are all dismissed without merit. The costs of appeal between the Plaintiff, Defendant 1 and Defendant 2 are assessed against Defendant 1 and Defendant 2. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Dong-won (Presiding Justice)