[1] Whether a project implementer of an urban environment improvement project is obligated to compensate in cases where the requirements are met by applying mutatis mutandis the former Act on Acquisition of and Compensation for Land, etc. for Public Works Projects, which is subject to restrictions on the right to use and benefit from the land under the main sentence of Article 49 (6) of the former Act on the Maintenance

[2] The procedure under which a project implementer of an urban environment improvement project shall receive real estate in a rearrangement zone from a lessee pursuant to Article 49 (6) of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions

[3] Whether there is a claim for housing relocation expenses under the former Act on Acquisition of and Compensation for Land, etc. for Public Works Projects to the "owner of land, etc." who participated in an improvement project by applying for a parcelling-out with consent to an urban environment improvement project (negative)

[1] Under the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 9729, May 27, 2009; hereinafter “Urban Improvement Act”), if a management and disposal plan is authorized and publicly announced pursuant to Article 49(6) of the Act, the former owner’s use and profit-making of the subject-matter can be suspended, and thus, the project implementer can use and profit-making without any separate procedure for expropriation or use of the subject-matter. On the other hand, the lessee suffers from loss to be restricted from the right to use and profit-making of the leased object without his/her own intent pursuant to Article 49(6) of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 11017, Aug. 4, 2011).

[2] In full view of the main sentence of Article 49(6) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (amended by Act No. 9729, May 27, 2009) and Article 62 of the former Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor (amended by Act No. 11017, Aug. 4, 201) that provide the principle of advance compensation, deeming that a project implementer of an urban environment improvement project is required to pay business compensation, etc. to be determined by the consultation or adjudication procedure is insufficient merely because the management and disposal plan is authorized and publicly announced to transfer land or buildings within the rearrangement zone to a lessee to start the construction work, and it is in conformity with the Constitution that guarantees the people’s property rights. If a consultation on compensation between a project implementer and a lessee is concluded, the duty to pay compensation and the lessee’s duty to deliver real estate simultaneously will be related to the simultaneous performance, and if it is based on the adjudication procedure, prior to the payment procedure for business compensation, etc.

[3] Article 78(5) of the former Act on Acquisition of and Compensation for Land, etc. for Public Works Projects (amended by Act No. 11017, Aug. 4, 2011; hereinafter “Public Works Act”) provides that “A resident of a residential building shall pay compensation by calculating expenses incurred in moving his/her residence and expenses incurred in transporting movable property, such as household effects, etc.” The main text of Article 54(1) of the Enforcement Rule of the Act on Acquisition of and Compensation for Land, etc. for Public Works Projects provides that “the owner of a residential building incorporated into a zone where public works are performed shall compensate for housing relocation expenses by two-month depending on the number of his/her household members when he/she compensates for the building.” However, the “owner of land, etc.” who participated in an improvement project with consent to an urban environment improvement project shall be deemed to have a duty to compensate for housing relocation expenses to the owner of a residential building incorporated into the zone where public works are performed, such as the purchase price of land or a building, which is equivalent to the sale price of land.

[1] Articles 38, 40(1), and 49(3) and (6) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (Amended by Act No. 9729, May 27, 2009); Articles 3 and 61 of the former Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor (Amended by Act No. 11017, Aug. 4, 201); Articles 3 and 61 of the former Act / [2] Articles 38, 40(1) and 49(3) and (6) of the former Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (Amended by Act No. 9729, May 27, 2009); Article 62 of the former Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor; Article 536(1) of the former Enforcement Rule of the Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor

[2] Supreme Court Decision 2008Da78415 Decided July 28, 2011

Military Personnel Mutual Aid Association (Law Firm Sejong, Attorney Lee Young-soo, Counsel for the defendant-appellant)

Defendant 1 and two others (Attorney Yu-ju et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2008Na82874 decided March 18, 2009

The part of the lower judgment against Defendant 2 and 3 is reversed, and that part of the case is remanded to the Seoul High Court. Defendant 1’s appeal is dismissed. The costs of appeal against Defendant 1 are assessed against the said Defendant.

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

1. As to Defendant 2 and 3’s grounds of appeal

A. Article 38 of the former Act on the Acquisition of Land, etc. for Public Works and the Compensation therefor (amended by Act No. 9729, May 27, 2009; hereinafter “Urban Improvement Act”) provides that “If it is necessary to implement a rearrangement project (limited to a case where there is a natural disaster or other unavoidable cause in the case of a housing reconstruction project) in an improvement zone, a project implementer may expropriate or use land, things, or other rights under Article 3 of the Act on the Acquisition of Land, etc. for Public Works and the Compensation therefor.” The main sentence of Article 40(1) provides that “The Act on the Acquisition of Land, etc. for Public Works and the Compensation therefor shall apply mutatis mutandis to the expropriation or use of land or buildings for the implementation of a rearrangement project in an improvement zone, except as otherwise provided for in this Act.” Meanwhile, the former Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor (amended by Act No. 11017, Aug. 4, 2011; hereinafter referred to as “Land and rights”) other than the following Act shall apply:

However, Article 49(3) of the Urban Improvement Act provides, “When the head of a Si/Gun approves a management and disposal plan pursuant to the provisions of paragraph (2), he/she shall publicly announce the details thereof in the official report of the relevant local government.” The main sentence of paragraph (6) of the same Article provides, “When a public announcement is made pursuant to the provisions of paragraph (3), the owner, superficies, person having a right to use or profit from the previous land or buildings shall not use or profit from the previous land or buildings until the date of the public announcement of transfer under Article 54.” If the public announcement of the approval of a management and disposal plan is made pursuant to the provisions of this Act, the former owner, etc. of the object shall be suspended from using or profit from the leased object without any separate expropriation or use procedure, while the lessee suffers loss restricted the right to use or profit from the leased object without his/her own intention pursuant to the main sentence of Article 49(6) of the Urban Improvement Act. Therefore, if the project operator satisfies the obligation of Article 40(1) of the Urban Improvement Act by analogy.

B. In addition, comprehensively considering the aforementioned main text of Article 49(6) of the Act, Article 62 of the Act on the Maintenance and Improvement of Urban Areas and Public Works Act, including Article 62 of the Act on the Maintenance and Improvement of Urban Areas and the Act on the Maintenance and Improvement of Urban Areas, which provides the principle of compensation in advance, deeming that the management and disposal plan for the transfer of land or buildings within the rearrangement zone by the implementer of the urban environment rearrangement project to start the construction work is insufficient to deem that it is required to pay business compensation, etc. determined by the consultation or adjudication procedure, and that it is in conformity with the Constitution guaranteeing the people’s property rights. If a consultation on compensation is concluded between the project implementer and the lessee, the obligation to pay compensation to the partnership and the lessee to deliver real estate simultaneously, and the procedure for payment of business compensation, etc. prior to the delivery of real estate should be prior to the delivery of real estate (see, e.g., Supreme Court Decision 2008Da

C. Nevertheless, the court below determined otherwise solely for the reasons stated in its holding. In so doing, the court below erred by misapprehending the legal principles on compensation for losses under the Urban Improvement Act, thereby affecting the conclusion of its judgment.

2. As to Defendant 1’s ground of appeal

A. Article 78(5) of the Public Works Act provides that “A resident of a residential building shall be compensated by calculating and compensating expenses incurred in relocating his/her residence and expenses incurred in transporting movable property, such as household effects,” and the main text of Article 54(1) of the Enforcement Rule of the Public Works Act provides that “the owner of a residential building incorporated into a zone where public works are performed shall compensate for housing relocation expenses for two months depending on the number of household members when compensating for the building.” However, the “land owner, etc.” who participated in an improvement project by applying for parcelling-out with the consent of an urban environment improvement project shall be entitled to compensate for housing relocation expenses for the owner of a residential building incorporated into a zone where public works are performed. However, the “land owner, etc.” who participated in an improvement project by applying for parcelling-out with the consent of an urban environment improvement project has a status corresponding to the project implementer, in cases where there is a difference between the price of the land or building previously owned and the price of the land or building to be purchased. Therefore, it is reasonable to deem that the landowner, such land owner,

Although the reasoning of this part of the judgment below is not appropriate, the conclusion that the owner of the above land does not have the right to claim for the cost of moving a house is just, and there is no error of law such as misunderstanding of the legal principles as to the invalidation of project implementation authorization as

B. Article 36(1) of the Urban Improvement Act provides, “The project implementer shall make the owners or tenants of the houses removed due to the implementation of a residential environment improvement project and a housing redevelopment project reside temporarily in the facilities, such as rental housing, located outside and outside the relevant rearrangement zone, or take measures corresponding to the temporary expropriation, such as arranging the loan of housing funds.”

After compiling the adopted evidence, the lower court acknowledged the facts as indicated in its holding, and determined that, in the case of a residential environment improvement project and a housing redevelopment project, a project implementer bears the duty of installing temporary accommodation facilities, etc. under the above provisions, but the instant improvement project constitutes an urban environment improvement project and thus cannot be deemed as bearing the duty of installing temporary accommodation facilities, etc. alleged by the said Defendant on the ground of Article 36(1) of

In light of relevant laws and records, the judgment of the court below is just, and there is no error in the misapprehension of legal principles as to the establishment of temporary accommodation facilities, such as this part of the grounds of appeal.

3. Conclusion

Therefore, the part against Defendant 2 and 3 of the judgment below is reversed, and that part of the case is remanded to the court below for a new trial and determination. Defendant 1’s appeal is dismissed, and the costs of appeal against Defendant 1 are assessed against the above Defendant. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Sang-hoon (Presiding Justice)