[1] Whether Article 46 of the amended Housing Act and Article 6 of the Addenda to the Act on the Ownership and Management of Aggregate Buildings apply to the liability for warranty and repair of defects of multi-family housing which had undergone a pre-use inspection or use approval before May 26, 2005 (negative)

[2] The legal nature of the seller's liability for warranty of an aggregate building under Article 9 of the Act on the Ownership and Management of Aggregate Buildings (=legal liability) and the extinctive prescription period of the liability for warranty (=10 years)

[1] The usage inspection or use approval of a collective housing is completed after the completion of the construction of an aggregate building and the housing is delivered to the sectional owner who was the buyer. Since the error of construction, such as defective construction, which caused the occurrence of defects, has already occurred in its nature, it is reasonable in terms of trust protection or fairness to ask for warranty liability by applying the Act on the Warranty Liability applicable at that time uniformly. Therefore, the amended Housing Act (amended by Act No. 7600 of July 13, 2005) and Article 6 (amended by Act No. 7502 of May 26, 2005) of the Addenda of the amended Act on the Ownership and Management of Aggregate Buildings (amended by Act No. 3725 of Apr. 10, 1984) cannot be applied mutatis mutandis in cases where the sectional owner claims damages for the defect repair under the Act on the Ownership and Management of Aggregate Buildings and Article 64 through 67 of the Housing Act.

[2] Article 9 of the Act on the Ownership and Management of Aggregate Buildings provides that the provisions on the warranty liability of a contractor under the Civil Act shall apply mutatis mutandis to the warranty liability of a seller of an aggregate building in order to induce a seller or a seller of an aggregate building to form a solid building, and to further protect the owner of an defective building, to clarify the contents of warranty liability of a seller of an aggregate building, while it is compulsory. Since the liability under the same Article is not based on a sale contract, but on the legal liability of a seller of an aggregate building for a sectional owner of an aggregate building as of the present sectional owner of an aggregate building, the extinctive prescription period of ten years is applied pursuant to Article 162

[1] Article 9 of the Act on the Ownership and Management of Aggregate Buildings, Article 6 of the Addenda (amended by Act No. 7502 of May 26, 2005 among the Addenda of Act No. 3725 of April 10, 1984), Article 46 of the former Housing Act (amended by Act No. 7600 of July 13, 2005), Article 46 (3) of the Addenda (amended by Act No. 7600 of May 26, 2005), Articles 667, 668, 669, 670, and 671 of the Civil Act / [2] Article 9 of the Act on the Ownership and Management of Aggregate Buildings, Article 162 (1) of the Civil Act

[2] Supreme Court Decision 2001Da47733 decided Feb. 11, 2003 (Gong2003Sang, 773)

Plaintiff’s representative meeting (Attorney Park Hong-hoon et al., Counsel for the plaintiff-appellant)

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

Seoul High Court Decision 2007Na65162 decided January 8, 2008

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. As to the misapprehension of legal principles as to the defect warranty liability period under the amended Housing Act

Article 6 of the Addenda to the Act on the Ownership and Management of Aggregate Buildings (amended by Act No. 7502, May 26, 2005; hereinafter referred to as the "Revised Aggregate Buildings Act") provides that the special provisions of the Housing Act on the method of management of aggregate housing and standards shall be effective unless they conflict with the Aggregate Buildings Act and infringe on the basic rights of sectional owners: Provided, That the liability for warranty of collective housing and repair of defects shall be governed by the provisions of Article 46 of the Housing Act, and Article 46 (1) of the Housing Act (amended by Act No. 7520, May 26, 2005; hereinafter referred to as the "Revised Housing Act") provides that Article 67 through 671 of the Civil Act shall apply mutatis mutandis to the liability for warranty arising from the sale of a building, and Article 9 of the Aggregate Buildings Act provides that the tenant's defect shall be damaged or damaged within the period prescribed by Presidential Decree within ten years from the date of pre-use inspection or approval for use of collective housing, such as a defect.

However, Article 46 (3) of the Addenda to the amended Housing Act, which provides that the provisions of Article 46 shall apply to the inspection of use under Article 29 of the Housing Act or the liability for warranty of defects and the liability for warranty of defects before the enforcement of the amended Housing Act shall be null and void due to the declaration that it is in violation of the Constitution on July 31, 2008 by the Constitutional Court Order 2005HunGa16 Decided July 31, 2008. Meanwhile, the inspection of use or approval for use of an aggregate building is completed after the construction of an aggregate building and immediately delivery to the owner of the building. Since the defective construction, which causes defects, has already occurred at that time, it is reasonable to ask the owner of the building for warranty liability by applying the Act on the Liability for Warranty, which applies in a uniform manner at that time, from the viewpoint of trust protection or fairness. Accordingly, Article 6 of the Addenda to the amended Housing Act or the amended Aggregate Buildings Act, which applies mutatis mutandis to the liability for warranty and the liability for warranty under Article 76 (4) of the amended Act.

According to the reasoning of the judgment below, the court below acknowledged the fact that the apartment of this case had undergone a pre-use inspection by the competent authority on May 16, 197, and that each of the defects, such as the attachment [Attachment Table 1 and 2] attached to the judgment below, occurred within 1, 2, and 3 years from the date of the pre-use inspection or pre-use inspection of the apartment of this case. Among the 525 households of this case, the co-owners of 439 households of this case transferred the right to claim damages in lieu of each of the above defects in the construction/sale of the apartment of this case against the defendant, who was the building/seller of the apartment of this case, to the plaintiff on December 14, 2006, and around that time the defendant notified the transfer of the above defects, and determined that the defendant is liable to pay the plaintiff the damages corresponding

According to the records of this case, it is clear that the plaintiff filed a claim against the defendant, who is the seller of this case for damages compensation in lieu of defect repair under Article 9 of the Aggregate Buildings Act. As recognized by the court below, the apartment of this case had undergone a pre-use inspection on May 16, 1997, which was prior to the enforcement of Article 6 of the Addenda to the amended Aggregate Buildings Act and Article 6 of the amended Aggregate Buildings Act. Thus, the contents and scope of the warranty liability under Article 9 of the amended Aggregate Buildings Act and Articles 67 through 671 of the Civil Act, which are applicable mutatis mutandis by Article 9 of the amended Aggregate Buildings Act and Article 67 of the amended Aggregate Buildings Act, should be determined as to the apartment of this case, as to the apartment of this case, notwithstanding the provisions of Article 6 of the Addenda to the amended Aggregate Buildings Act and Article 6 of the amended Aggregate Buildings Act, the court below's determination that the warranty liability is recognized within 1,2 and 3 years prior to the expiration of the warranty liability period under the revised Housing Act, was justified by the court below's judgment.

The ground of appeal is that the period of warranty liability under the amended Housing Act is the period of exclusion or the period of occurrence of defects and the period of exclusion. Thus, the plaintiff's right to claim warranty has already ceased to exist after the lapse of such exclusion period. However, it is merely an error of the judgment below on the premise that the application of the amended Housing Act is excluded and only the amended Housing Act applies to the defect repair and warranty liability of the apartment of this case.

2. As to the misapprehension of legal principles as to the extinctive prescription of a claim for damages in lieu of defect repair

Article 9 of the Aggregate Buildings Act provides that the provisions of the Civil Act concerning the warranty liability of a contractor for an aggregate building shall apply mutatis mutandis to the warranty liability of a seller for an aggregate building in order to induce a seller or a seller of an aggregate building to build a solid building, and to further protect the owners of an aggregate building which is poorly constructed, to clarify the contents of warranty liability of a seller, while the liability under Article 9 of the Aggregate Buildings Act is a mandatory provision. Since the liability under Article 9 of the Aggregate Buildings Act is not based on the sale contract but on the legal liability of a seller of an aggregate building to a sectional owner of an aggregate building (see Supreme Court Decision 2001Da47733, Feb. 11, 2003). Accordingly, the ten-year extinctive prescription period is applied pursuant to Article 162(1) of the Civil Act

The court below held that the defect in this case occurred within 3 years from the date of the usage inspection of the apartment in this case, and that the plaintiff was transferred the right to claim damages in lieu of defect repair from the sectional owners of the apartment in this case and submitted to the court of first instance an application for alteration of the purport and cause of the above transfer on March 14, 2007, before the elapse of 10 years from May 16, 1997, the date of the usage inspection of the apartment in this case, which was before the expiration of 10 years from May 16, 1997, which was the date of the usage inspection of the apartment in this case, the extinctive prescription was suspended at the time

3. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Park Si-hwan (Presiding Justice)