[1] Whether the council of occupants' representatives can exercise the right to claim damages in lieu of the right to claim repair of defects against the business entity (affirmative)

[2] Whether the warranty liability period of 5 to 10 years under Article 59(1) of the Enforcement Decree of the Housing Act is recognized for all defects that occur in the portions of proof-proof structures of multi-family housing (negative)

[1] The council of occupants' representatives may request the business entity to repair defects when a defect occurs in a multi-family housing, and such right to request repair of defects include a claim for damages in lieu thereof.

[2] The current Housing Act and the Act on the Ownership and Management of Aggregate Buildings clearly excludes the application of the provisions of Articles 67 through 671 of the Civil Act concerning the ownership and management of Aggregate Buildings to the Act on the Ownership and Management of Aggregate Buildings as well as the defect repair, and uniformly, only the provisions of Article 46 of the Housing Act shall apply to the defect repair liability period. Accordingly, Article 59(1) of the Enforcement Decree of the Housing Act recognizes the warranty liability of 5 to 10 years only in the case where the apartment house is destroyed or is likely to collapse due to the defect. Thus, according to the current Act, even if the defect of the load-bearing structure is a defect of the load-bearing structure, it is recognized that the warranty liability of 5 to 10 years is not recognized, but only in the case of a serious defect.

[1] Article 46 of the Housing Act, Article 59 of the Enforcement Decree of the Housing Act / [2] Article 46 of the Housing Act, Article 3 of the Addenda ( May 26, 2005) and Article 59 (1) [Attachment 7] of the Enforcement Decree of the Housing Act

The council of occupants' representatives of the new apartment (Attorney Park Hong-hoon et al., Counsel for the plaintiff-appellant)

Newan Construction Industry Co., Ltd. and one other (Attorney Maximum Financial Resources, Counsel for the defendant-appellant)

November 4, 2005

1. All of the plaintiff's claims are dismissed.

2. Of the litigation costs, 70% is borne by the Plaintiff, and the remainder is borne by the Defendants, respectively.

The Plaintiff shall pay 536,763,623 won to Defendant Newan Construction Co., Ltd., and 160,001,930 won to Defendant Newan Construction Co., Ltd., and 160,001,930 won to each of the above money, and 5% interest per annum from the day following the delivery of a copy of the application for purport and cause modification of the claim of this case to the day of the pronouncement of this case and 20% per annum from the next day to the day of full payment.

1. Basic facts

A. The plaintiff is an autonomous management body composed of occupants to manage three new apartment units on the 700-dong 700-dong 328 households on the 700-dong 700-dong Hayang-dong Hayang-si (hereinafter "the apartment unit of this case"), and the defendant Newan Construction Industry Co., Ltd. (hereinafter "the defendant Newan Construction Co., Ltd.") is a business entity that constructed and sold the apartment unit of this case. The defendant Korea Housing Guarantee Co., Ltd. (the old Housing Business Mutual Aid Association was changed pursuant to Article 5 of the Addenda of the former Housing Construction Promotion Act amended by Act No. 5908 of Feb. 8, 1999; hereinafter "the defendant's Housing Guarantee") concluded a contract on the warranty bond of this case with the defendant Newan Construction Co., Ltd. to issue the warranty bond of this case to the residents of Yangyang-dong 160,001,930, the warranty bond of this case from December 10 to 19, 1994.

B. The above warranty clause provides that the defendant's warranty liability clause provides that the defendant's warranty against the warranty against the defects that occurred during the warranty period of this warranty shall compensate for the damages suffered by the council of occupants' representatives due to the failure of the partner's performance of the warranty despite the request for the performance of the warranty in accordance with the procedures prescribed by the former Decree on the Management of Multi-Family Housing (Enforcement Decree of the Housing Act and the Housing Act).

C. According to the appraisal of defects in the apartment of this case, the apartment of this case has the following defects as stipulated in the Housing Act and the Enforcement Decree of the Housing Act (However, whether the five-year and ten-year defects are included in the scope of defects as stipulated in the above Act or subordinate statutes or not).

(a) a number of primary defects, such as roof floor, stairs partition walls, stairs room floor, basement floor, underground floor floor, lighting walls of underground parking lots, and underground parking lot floor cracks;

(2) Many 2-year defects, such as lighting walls of the stairs room, lighting walls of underground parking lots, utility tunnels for underground parking lots, and civil retaining walls of military units, etc.

(3) Multiple three-year defects, such as external railing, roof railing, rail railing of underground parking lots, and cracks of underground parking lots;

(4) Multiple five-year defects, such as external slabs, stairs rooms slves, underground parking lot slves, etc.

(5) Multiple 10-year defects, such as external walls, stairs rooms, underground floors walls, and underground parking lot walls, such as cracks, etc.

D. The Plaintiff filed the instant lawsuit on July 27, 2004, and the Housing Act and the Act on the Ownership and Management of Aggregate Buildings (hereinafter “Aggregate Buildings Act”) were amended on May 26, 2005 while the instant lawsuit is pending, and the amended Act was applied to this case pursuant to Article 3 of the Addenda to the Housing Act.

[Reasons for Recognition] A.1 to 5 (including each number), the result of the on-site inspection by this Court, the result of the appraisal of the right to move of an appraiser, the purport of the entire pleadings

2. The assertion and judgment

A. The Plaintiff sought damages equivalent to the cost of repairing the said defect to Defendant Newan Construction, and sought a warranty bond against the Defendant within the limits set forth in the said warranty contract.

B. Determination of the Claimant

The defendants asserted that the council of occupants' representatives, which is not a sectional owner of apartment house, cannot exercise the right to claim damages.

The council of occupants' representatives, in the event of a defect in a multi-family housing, may require the project undertaker to repair the defect, and it is reasonable to interpret that such a defect repair claim includes a claim for damages in lieu thereof. Therefore, this part of the defendants' assertion is without merit.

C. Determination as to claims for defects in the year 1, 2, and 3

The Defendants asserted that the statute of limitations has expired even if there exists any defect, as alleged by the Plaintiff, in the apartment of this case.

On the other hand, the right to claim damages in lieu of the defect repair against the Defendants is applied to the damages claim established due to the nonperformance of the obligation arising out of the commercial activities of the construction of the Defendant Newanananananananananananananananananananananananananananananananananananananananananananananananananananananananananananananananannanannannannanannanannanannanannannannannannannannannannanannannannannannannannannannannannannannannannan

D. Determination as to the claim for 5, 10 years' defects

(1) Notes

The plaintiff asserts that the 5,10 years' warranty liability for the defendants is all defects arising from the load proof structure. The defendants asserted that the scope of warranty liability is limited to the cases where the apartment house is likely to collapse or collapse due to the defect among the defect in the load proof structure.

(2) Interpretation of the current law

Although the warranty liability period of multi-family housing is determined in consideration of the internal proof structure and the interior life of each facility construction of multi-family housing, it is unreasonable to uniformly determine 10 years under the Multi-Family Building Act, and the Housing Act was amended by Act No. 7520 on May 26, 2005.

With respect to the repair of defects, Article 46 (1) of the amended Housing Act provides that the project undertaker shall apply mutatis mutandis the provisions of Articles 67 through 671 of the Civil Act with respect to the warranty liability for the sale of buildings in lots, if any defects prescribed by the Presidential Decree occur, such as rupture, subsidence, damage, etc. due to erroneous construction during the warranty liability period prescribed by the Presidential Decree within 10 years from the date of inspection of the use of collective housing or the approval of the use of collective housing under Article 18 of the Building Act, within the warranty liability period prescribed by the Presidential Decree, from the date of approval of the use of the collective housing under Article 18 of the Building Act to the date of inspection of the collective housing or from the date of approval of the use of the collective housing under Article 18 of the Building Act to the owner of the collective housing, he/she shall repair the defects at the request of the occupant of the collective housing and the person prescribed by the Presidential Decree. Article 46 (3) of the Housing Act provides that the project undertaker shall be liable to compensate for damages due to the defects caused by the defect.

Accordingly, Article 59(1) of the Enforcement Decree of the Housing Act provides that the scope of defects under Article 46(1) of the Act shall be limited to the scope of defects, the defect liability period of each load proof structure and each load proof structure and each facility construction shall be as shown in [Attachment Table 6] and [Attachment Table 7]. [Attachment 6] provides that the scope of defects shall be limited to the cases of rupture, rupture, rupture, rupture, breakage, collapse, collapse, leakage, operation or malfunction of functions due to a defect in construction, installation, rupture or malfunction, rupture or defect load, etc., which may cause harm to the function, aesthetic or safety of the building or facility, and the defect liability period of each 1 to 3 years shall be limited to 17 parts of the facility construction. [Attachment 7] provides that the defect liability period of each 1 to 5 years shall be limited to the cases of multi-family housing with a load proof structure and a load proof wall in question.

Article 46 of the Addenda of the Housing Act enters into force from the date of its promulgation under Article 1 of the Addenda of the Housing Act, and Article 3 (Transitional Measures for Warranty Liability and Repair of Defects) of the Addenda of the Housing Act provides that the provisions of Article 46 of the Housing Act shall apply to the inspection of use 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 Aggregate Buildings Act (amended by Act No. 7502 of May 26, 2005) as amended following the amendment of the Housing Act (amended by Act No. 7502 of May 26, 2005) provides that the special provisions of the Housing Act on the method of management of collective housing and the criteria thereof are effective to the extent that they conflict with this Act and

After all, the current Housing Act and the Aggregate Buildings Act explicitly exclude the application of the provisions of Article 667 to Article 671 of the Civil Act, which are applied mutatis mutandis by the Act on the Ownership and Management of Aggregate Buildings and the Act on the Maintenance of Defects, and the provisions of Article 46 of the Housing Act shall be applied uniformly. Accordingly, Article 59 (1) of the Enforcement Decree of the Housing Act recognizes the warranty liability of the defendant's housing for 5 to 10 years only in cases where the apartment house concerned is destroyed or is likely to collapse due to the defect, and the warranty liability of the defendant's housing is also applied to the warranty liability of the defendant's housing.

Therefore, according to the current law, even if the defects of the proof-proof structure are the defects, the warranty liability is recognized only when the defects are serious, as seen earlier, rather than the warranty liability for all defects of the 5 to 10 years. According to the result of the on-site inspection by the court and the appraisal by the appraiser, it is apparent that the defects existing in the proof-proof structure of the apartment of this case do not reach the degree of determination that the apartment might collapse. Therefore, the plaintiff's claim for this part is without merit

(3) Whether the precedents prior to the amendment are applied

The plaintiff asserts that the defect in the portions of proof-proof structures, which are liable for warranty, is all the defect that occurred in the portions of proof-proof structures (Supreme Court Decision 9Da69662 delivered on February 8, 2002), should also be applied to this case. Therefore, we examine whether the above Supreme Court precedents can also be applied to the present time when the Housing Act was amended.

Before the revision of the Housing Act, Article 9 (1) of the former Act on Aggregate Buildings (Liability for Warranty) provides that Article 667 through 671 of the Civil Act shall apply mutatis mutandis to the warranty liability of the person who constructed and sold a building, and Article 67 (2) of the same Act provides that with respect to the warranty liability of the seller under paragraph (1), a special agreement unfavorable to the purchaser rather than that provided for in the Civil Act is invalid, and Article 6 (Relation to Housing Construction Promotion Act) of the Addenda provides that the special provision of the Housing Construction Promotion Act on the method and standard for the management of aggregate housing is effective as long as it violates this Act and

Article 38(14) of the former Housing Construction Promotion Act (amended by Act No. 6916, May 29, 2003; hereinafter referred to as the "Housing Act") provides that the project undertaker is responsible for repairing the defects of multi-family housing as prescribed by the Presidential Decree. Article 16(1) of the former Decree on the Management of Multi-Family Housing ( repealed by Presidential Decree No. 18146, Nov. 29, 2003; hereinafter referred to as the "Enforcement Decree of the Housing Act") prior to the abolition of the defect repair, the defect repair period for multi-family housing, etc. shall be at least two years in the case of major facilities from the date of inspection of the defect repair, and the period according to the classification and scope of other facilities shall be at least one year in the case of other facilities. [Attachment 7] stipulates that the defect repair period of the main facilities subject to defect repair shall be divided into 17 parts and the defect repair period of each year or three years in the remarks column, regardless of the defect repair period.

In addition, with respect to damages, the former Housing Construction Promotion Act provides that the business entity and the owner of the building under the provisions of Article 38(16) through (14) shall repair the apartment house within the scope of ten years and compensate for damages caused by the occurrence of a serious defect in the portions of proof-stress structure of the apartment house. In this case, the defect repair period by structure and the scope of the defect shall be prescribed by the Presidential Decree. Article 16-2(1) of the former Enforcement Decree of the Housing Construction Promotion Act provides that the defect repair period and the scope of the defect shall be determined by the Presidential Decree. Article 38(16) of the former Enforcement Decree of the Housing Construction Promotion Act provides that the defect repair period by proof-stress structure (excluding any artificial wall, etc. without force) shall be 10 years, and the beams, floor, and roof shall be 5 years, and the defect repair period is determined to be in danger of collapse due to the defect in the portions of proof-stress structure and the defect repair liability of the apartment house shall be limited to the case where the apartment house is under the defect management obligation.

Ultimately, notwithstanding the aforementioned provisions due to the nature of the mandatory provisions of the former Act on the Construction Promotion, the buyer of an aggregate building can be held liable for warranty against the business entity for ten years pursuant to the provisions of Article 671 of the Civil Act which is applied mutatis mutandis by Article 9 of the Act on the Construction Promotion of Aggregate Buildings, and its defect is not limited to important defects. Thus, for the harmonious interpretation, the Supreme Court interpreted the above provisions of the former Housing Construction Promotion Act and the former Act on the Management of Aggregate Buildings to be limited to the purport that the management entity of an apartment building or the council of occupants' representatives, who did not have any particular legal relations with the business entity, may demand remuneration for the defect that can be promptly repaired as a warranty bond by determining the procedure, method, and period of defect repair of the apartment house at an administrative level (see Supreme Court Decision 24891, Jan. 27, 2004).

In addition, even in cases of seeking repair of defects under the former Housing Construction Promotion Act, Article 16(14) of the former Decree on the Management of Multi-Family Housing provides that the period of warranty for the portions of proof-stress structure under Article 38(14) of the former Housing Construction Promotion Act, which provides for the business entity's liability for repairing defects, shall be 10 to 5 years, and the scope of warranty for the portions of proof-stress structure shall not be limited to the cases where multi-family housing has collapsed or is likely to collapse, and the warranty liability for the warranty of the house shall also be in accordance with the provisions of Article 16 of the former Decree on the Management of Multi-Family Housing. As such, the object of warranty liability for the mutual aid association with the warranty period of 10 years as well as the project entity's liability is ultimately construed as all defects that have occurred in the portions of proof-stress structure, and the purport of Article 28(16) of the former Decree on the Management of Multi-Family Housing is that it is not important to limit the liability to 9 years or 20 years of serious defect.

However, as seen earlier, this interpretation explicitly excluded the application of the Aggregate Buildings Act to the warranty liability and the defect repair of the apartment house, and requires the application of the provisions of Article 46 of the Housing Act to comply with the provisions of Article 59 (1) [Attachment 6 and 7] of the Enforcement Decree of the Housing Act under the above Act, and stipulates the scope of the warranty liability and the warranty liability of the defects for which the project undertaker bears the warranty liability, unlike the [Attachment 7] of the former Decree on the Management of Multi-Family Housing, only the primary, 2, and 3 defects in [Attachment 6] are prescribed in [Attachment 7] of the former Decree on the Management of Multi-Family Housing, and recognized the warranty liability only in cases where there is a possibility of collapse in the 5, 10th and 10-year defects in [Attachment 7] of the Enforcement Decree of the Housing Act.

3. Conclusion

Therefore, the Plaintiff’s claim against the Defendants is dismissed in entirety as it is without merit, and as to the burden of litigation costs, it is unreasonable to impose all the Plaintiff, which was lost due to the amendment of the Housing Act during the lawsuit of this case, and the alteration of the contents and duration of the warranty liability. Therefore, applying Article 99 of the Civil Procedure Act, 70% of the Plaintiff and the Defendants bear 30

Judges Jeong Jin-hun (Presiding Judge)

1) Article 38(14) and (16) of the former Housing Construction Promotion Act and Article 16(1) and Article 16-2(1) of the former Enforcement Decree of the Housing Act have been modified to Article 46(1) and (3) of the Housing Act and Articles 59(1) and 62(1) of the Enforcement Decree of the Housing Act, but they were maintained as a replacement. However, Article 59(1) [Attachment 6] of the former Enforcement Decree of the Housing Act was deleted from the non-high column under Article 16(1) [Attachment 7] of the former Decree on Management of Multi-Family Housing, and Article 62(1) [Attachment 7] of the Enforcement Decree of the Housing Act on the repair of defects of the portions of proof-proof structures, which are related to the latter part of Article 46(3) of the Housing Act (Article 59(1) of the Enforcement Decree of the Housing Act, and the following [Attachment 7] of the Enforcement Decree of the Housing Act are prescribed in [Attachment 6] of Article 59(1).