2018Guhap30342 Nullification, etc. of a disposition of approval for conversion into rental housing

A Stock Company

Law Firm Yang Hun-tae, Counsel for defendant-appellant

Attorney Park Jong-sung, Counsel for the plaintiff-appellant

Attorney Park Jong-tae, Counsel for the plaintiff-appellant

rolling stock market

Attorney Cho Young-chul, Counsel for the defendant-appellant

2019,5. 16

June 2019, 13

1. The plaintiff's primary and conjunctive claims are all dismissed. 2. The costs of lawsuit are assessed against the plaintiff.

The primary purport of the claim is that the defendant's disposition of approval for conversion of the rental housing of Gangnam-si B apartment on April 27, 2018 is invalid.

Preliminary claim: The defendant's disposition of approval for conversion of rental housing units in Gangnam-si B apartment units on April 27, 2018 is revoked.

1. Details of the disposition;

A. The Plaintiff is a rental business operator with the purpose of civil engineering, construction, lease of real estate, and sale, and has been running a housing rental business since its registration as a rental business operator on December 12, 1994.

B. The Plaintiff constructed the 495 household (255 square meters of the exclusive use area, 49.92 meters of the exclusive use area, 59.58 square meters of the exclusive use area, 240 household) with Gangseo-si B apartment (hereinafter “the apartment of this case”) 495 household. On September 6, 1999, the Plaintiff obtained a completion of the inspection for the use of the housing construction project from the Defendant, and leased the apartment of this case to the lessee from October 31, 199 (five years of the mandatory lease period).

C. Around May 2017, the council of lessees’ representatives of the instant apartment complex consisting of lessees of the instant apartment complex applied for approval for conversion of rental housing for sale in lots (hereinafter “instant application”) pursuant to Article 21(5) of the former Rental Housing Act (wholly amended by Act No. 13499, Aug. 28, 2015; hereinafter “former Rental Housing Act”). On April 27, 2018, the Defendant approved conversion of rental housing for sale in lots (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 3 (including each number; hereinafter the same shall apply), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The instant disposition is null and void because of the existence of a serious and apparent defect as follows, and is during domestic affairs.

However, even if there is no clear defect, it should be cancelled because it is illegal.

1) Abuse of rights or violation of the principle of good faith

If a lessee applies for approval for conversion for sale in lots at the expiration of 13 years from the expiration of the mandatory rental period, it is not permissible because it constitutes an abuse of rights or violates the principle of good faith.

2) The pre-sale conversion price of the instant apartment was calculated as the arithmetic mean of the construction cost and appraised value under Article 21(1) and (10) of the former Rental Housing Act, Article 23(8) of the former Enforcement Decree of the Rental Housing Act (wholly amended by Presidential Decree No. 26763, Dec. 28, 2015; hereinafter “former Enforcement Decree of the Rental Housing Act”) and Articles 14 and 9(1) [Attachment 1] [Attachment 1] of the former Enforcement Rule of the Rental Housing Act (amended by Ordinance of the Ministry of Land, Infrastructure and Transport No. 270, Dec. 29, 2015; hereinafter “former Enforcement Rule of the Rental Housing Act”) as the pre-sale conversion price for the instant apartment. However, since the mandatory rental period of the instant apartment can not be determined for ten years at the time of the lease of the instant apartment, it should be calculated as the same period as the pre-sale conversion price for the instant apartment exceeding 15 years.

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

1) As to the assertion that abuse of rights or the principle of good faith is violated

A) The Rental Housing Act, which has the purpose of supplying houses to homeless people with lower prices than market prices, provides various benefits to construction rental business operators by lending the National Housing Fund at a long-term and low interest rate to promote the smooth construction of rental housing. In addition, the Rental Housing Act has several regulations to protect lessee by limiting the sale of rental housing during the mandatory rental period and allowing rental business operators to subscribe to guarantee for rental deposit, and prohibiting rental business operators from establishing a mortgage, lease on a deposit basis, etc., and setting separate standards for lease terms and conditions, such as the lessee’s qualifications, method of selection, lease deposit, and rent, etc. from the announcement of tenant recruitment to include rental business operators in the standard rental contract, including the rental obligation period, time of conversion for sale and conversion for sale, and the use of standard rental contract, etc. (see, e.g., Constitutional Court en banc Decision 2008Hun-Ma581, 582, Jul. 29, 2010).

B) In full view of the contents of the relevant provisions and the legislative purpose of the former Rental Housing Act, in principle, whether to apply for approval for conversion of rental housing to parcelling-out after the expiration of the mandatory rental period is left to a rental business operator’s choice. However, if a rental business operator does not apply for approval for conversion to parcelling-out within the specified period after the expiration of the mandatory rental period, a lessee may apply for approval for conversion to parcelling-out with the consent of at least 2/3 of the total number of lessees. If a lessee does not have such application, a rental business operator may continue to engage in rental business under the previous condition that there is no limit of the mandatory rental period. However, in this case, a rental business operator or lessee still has the right to apply for approval for conversion to parcelling-out, and if there is a change in the existing intent or position, it shall be deemed that the rental business operator or lessee can enter into conversion to parcelling-out at any time by exercising his/her right to apply for conversion to parcelling-out. In addition, a rental business operator or lessee shall apply for approval for rent to the market, other than the other parties to a lease contract under Article 21.

C) The principle of trust and good faith refers to an abstract norm that a party to a legal relationship should not exercise his right or perform his duty in a way that is contrary to equity or trust, taking into account the other party’s interest. In order to deny the exercise of such right on the ground that it violates the principle of trust and good faith, the other party has to have expressed good faith to the other party, or the other party has such belief objectively, and the other party’s exercise of right against the other party’s good faith has to reach an irrecoverable level in light of the concept of justice (see, e.g., Supreme Court Decision 2002Du11233, Jul. 22, 2004).

D) In light of the above legal principles, inasmuch as multiple lessees did not express to the Plaintiff the intention of not applying for approval for conversion for sale in lots actively and definitely, the mere fact that many lessees did not wish to convert for sale in lots in the previous survey on conversion for sale in lots or passed for more than 10 years after the expiration of the mandatory period for lease does not necessarily mean that the lessee’s application for approval for conversion in lots has reached an irrecoverable state in light of the concept of justice. Therefore, this part of the Plaintiff’s assertion is without merit.

2) In full view of the following circumstances acknowledged by the evidence examined earlier regarding the assertion that there was a defect in calculating the pre-sale conversion price, it is difficult to deem that the Defendant calculated the pre-sale conversion price under subparagraph 1 (b) of the attached Table as the arithmetic mean of the construction cost and the appraised value.

① Article 9 Subparag. 3 of the former Enforcement Decree of the Rental Housing Act (amended by Presidential Decree No. 19051, Sept. 16, 2005) newly established a provision on rental housing with a mandatory rental period of ten years, and accordingly, attached Table 1 of the former Enforcement Rule of the Rental Housing Act (amended by Presidential Decree No. 471, Sept. 2, 2005) also newly established a provision that the mandatory rental period of ten years cannot exceed the appraised amount if the mandatory rental period of ten years is ten years. In addition, the above Enforcement Decree of the Rental Housing Act added a public-built rental housing with a mandatory rental period of ten years to solve the problem where the housing price increase due to the decline of the housing price for long-term rental housing where the mandatory rental period of ten years is ten years, the purpose of setting a rental business entity favorable to the rental business entity for five years is to induce the expansion of the supply of the long-term rental housing. Therefore, it may be deemed that the mandatory rental period of ten years is a policy determination.

② After the expiration of the lease period, a rental business operator has the right to decide on whether to apply for approval for conversion for sale in lots, and accordingly, it is possible to choose whether to continue lease business for sale in lots. Therefore, even if the lease business operator, the lease period of which was set for five years, starts the lease business without applying for approval for conversion for sale in lots, and ten years have passed since it was based on his/her own choice, it cannot be deemed that the lease period was set at ten years from the beginning.

③ It is recognized that the Plaintiff was unable to choose the mandatory rental period of 10 years since the Plaintiff’s mandatory rental period was set at five years at the time of commencing the instant apartment rental business. However, the pre-sale conversion standard for the pre-sale price under the documents submitted by the Plaintiff as evidence for recruitment of occupants (Evidence A No. 3-2) stated that “the construction cost and the appraisal price calculated in accordance with the Ministry of Construction and Transportation’s guidelines for the construction and management of public rental housing units: Provided, That even in this case, the pre-sale price calculated in accordance with the guidelines for the implementation of the pre-sale housing unit construction and management shall not exceed the amount calculated by deducting the depreciation costs during the rental period from the cost-to-sale price at the time of the pre-sale conversion.” The Plaintiff was aware that the sale price should be calculated as above at the time of the announcement of the tenant recruitment of the instant apartment unit. Thus, it is difficult to deem that

3. Conclusion

Therefore, the plaintiff's primary and conjunctive claims are all dismissed as it is without merit. It is so decided as per Disposition.

The presiding judge, Park Jae-sik

Judge Cho Chang-hun

Judges Shin Sung-sung