Where a right to use a site is disposed of separately from a section for exclusive use in violation of the main sentence of Article 20 (2) of the Act on the Ownership and Management of Aggregate Buildings, the validity thereof (Invalidity) and the meaning of "a bona fide" as provided for in paragraph (3) of the same Article that cannot be asserted without registering the purport of prohibition of separate disposal

In full view of the contents and legislative purport of Article 20 of the Act on the Ownership and Management of Aggregate Buildings, a person who has been awarded a bid for a section for exclusive use in an auction procedure shall acquire the right to use the site, and the right to use the site shall not be disposed of separately from the section for exclusive use, barring any special circumstance that the said person otherwise stipulated by the regulations or notarial deeds, and the disposition of the right to use the site in violation of this provision shall be null and void even if it is made by the court’s compulsory auction procedure. In addition, in order to establish the right to use the site as a right (Article 2 subparag. 6 of the same Act) to which a sectional owner owns the site of a building to own the section for exclusive use (Article 2 subparag. 6 of the same Act), in addition to the existence of an aggregate building and the right to use the site for which a sectional owner holds the right to use the site for exclusive use, taking into account the circumstances where other special conditions are not necessary, the prohibition of separate disposition means a third party of Article 20(3) of the same Act, which provides, in principle, that

Article 2 Subparag. 6, and Article 20 of the Act on the Ownership and Management of Aggregate Buildings

Supreme Court Decision 2004Da742 Decided March 10, 2006 (Gong2006Sang, 600) Supreme Court Decision 2007Da45777 Decided September 11, 2008 (Gong2008Ha, 1355)

Plaintiff (Law Firm Dongdong Partners, Attorneys Kim Han-ju et al., Counsel for the plaintiff-appellant)

Defendant (Attorney Or-ho et al., Counsel for defendant-appellant)

Seoul Central District Court Decision 2008Na27171 Decided February 11, 2009

The judgment of the court below is reversed, and the case is remanded to the Seoul Central District Court Panel Division.

The grounds of appeal are examined.

Article 20 of the Act on the Ownership and Management of Aggregate Buildings (hereinafter "the Act") provides that a sectional owner's right to use a site shall follow the disposition of his section for exclusive use (Paragraph 1), and that a sectional owner shall not dispose of his right to use a site separately from his section for exclusive use unless otherwise provided by the regulations or notarial deeds (Paragraph 2 and 4), and that the prohibition of separate disposal shall not be asserted against a third party who has acquired a real right in good faith without registering the purport thereof (Paragraph 3). The purport of the above provision is to prevent the separation of a section for exclusive use of an aggregate building and a right to use a site from occurring a sectional ownership without a right to use a site by preventing the occurrence of a sectional ownership without a right to use the site from occurring (see, e.g., Supreme Court Decision 2004Da742, Mar. 10, 2006).

In full view of the contents and legislative purport of the provisions of the Aggregate Buildings Act, a successful bidder of a section for exclusive use in an auction procedure is entitled to use the site (see Supreme Court Decision 2007Da45777, Sept. 11, 2008, etc.). Unless there are special circumstances that the section for exclusive use in an auction procedure is differently determined by the regulations or notarial deeds, the right to use the site cannot be disposed of separately from the section for exclusive use, and the disposition of the right to use the site in violation of this provision shall be null and void even if it is made by the court’s compulsory auction procedure (see Supreme Court Decision 2004Da742, Mar. 10, 2006, etc.). In addition, in order to establish it, the right to use the site is a right to hold the site in a building for exclusive use (Article 2 subparag. 6 of the Aggregate Buildings Act) to be established, taking into account the circumstances other than possessing the right to use the site for exclusive use.

According to the reasoning of the judgment below, the court below held that the compulsory auction procedure commenced after the right to use the land of this case had already been established for the ownership of the apartment of this case is null and void, and that the registration of ownership transfer in the defendant's name, which was completed due to the successful bid in the above auction procedure, is also null and void, but rejected the plaintiff's claim seeking the cancellation of the ownership transfer registration in the name of the defendant, a bona fide third party, seeking the cancellation of the ownership transfer registration in the name of the defendant as to the land of this case, in view of the circumstance that the defendant did not state the purport of the prohibition of separate disposal on the register at the time of acquiring the land of this case, and that the defendant did not recognize the ownership of this case as the legitimate auction object at the court's auction procedure without knowing the restriction of the prohibition of separate disposal. Thus, even if the plaintiff can be deemed to have acquired the right to use the land of this case from the auction procedure, it cannot be asserted against the defendant, a bona fide third party.

However, as seen earlier, a third party of the "good faith" under Article 20 (3) of the Aggregate Buildings Act refers to a third party who acquired a land which is the object of the right to use site, in principle, by gathering the circumstances that are considered as a site of an aggregate building. However, the defendant cannot be acknowledged as a bona fide third party based on the above circumstances cited by the court below. Rather, as recognized by the court below, if the defendant knew that the land of this case is being used as a site of an aggregate building to which the apartment of this case belongs through a certified copy of the register, a statement of objects of auction, a report on investigation into the current status, an assessment report, etc. at the time of the auction procedure, as recognized by the court below,

Therefore, the judgment of the court below is erroneous in the misapprehension of legal principles as to "faith" under Article 20 (3) of the Aggregate Buildings Act, which affected the conclusion of the judgment. The ground of appeal pointing this out is with merit.

Therefore, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Ill-sook (Presiding Justice)