Poor Design and Construction of Mixed-Use Apartment Complex
Lost Lawsuit Claiming 2.4 Billion KRW for Defect Repairs
Hundreds of Other Cases Filed Nationwide

Korea Land and Housing Corporation (LH) Gwacheon Uiwang Project Headquarters. / Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Seongpil Jo] Korea Land and Housing Corporation (LH) has been ordered to pay 2.4 billion KRW in defect repair costs due to poor design and construction of a mixed-use residential complex apartment in Seoul. Amid damage to the company's image caused by employees' speculation allegations in new towns, ongoing lawsuits filed in court are expected to increase the 'litigation risk.'

According to the legal community on the 12th, the Seoul High Court Civil Division 7 (Chief Judge Jongho Kim) ruled partially in favor of the plaintiff in a defect repair cost claim lawsuit filed by the residents' representative meeting of the A mixed-use residential complex apartment located in Mapo-gu, Seoul, against LH as the project owner, ordering "the defendant to pay the plaintiff approximately 2.3987 billion KRW." If the ruling is finalized, LH will have to compensate the residents' representative meeting for the defect repair costs along with delayed interest. LH is reportedly reviewing whether to appeal.

The residents' representative meeting filed a lawsuit demanding payment of over 3.7 billion KRW from LH in 2016, just five years after moving in, citing reasons such as sprinkler leakage within units. They claimed that LH either failed to construct parts according to the design drawings or performed poor or altered construction, resulting in defects such as cracks and leaks in the apartment's common and exclusive areas.

The first trial court stated, "It is reasonable to see that corrosion and leakage defects occurred in the sprinkler piping due to design errors," recognizing LH's 75% responsibility and ordering compensation of approximately 2.3514 billion KRW. However, the court rejected the claim for defect repair costs related to the non-installation of a root barrier sheet above the underground parking lot, stating, "Failure to construct this does not constitute a defect." The appellate court upheld this first trial judgment and additionally accepted about 39.7 million KRW of newly claimed defect repair costs by the residents' representative meeting in the appeal.

LH is facing continuous legal disputes beyond this lawsuit. According to the court, over 40 lawsuits involving LH have already been filed this year at the Seoul Central District Court alone. Excluding recess and holidays, this amounts to roughly one lawsuit filed per day. Including ongoing trials and expanding to courts nationwide, the number of lawsuits involving LH is estimated to reach hundreds.

It is also known that a significant number of lawsuits where LH is the defendant are ongoing. Among the plaintiffs are large construction companies contracted by LH to carry out construction. A legal community official said, "Legal disputes with large construction companies tend to involve relatively large sums, and if LH loses, it could face enormous costs." LH is scheduled to receive a ruling on a claim lawsuit for settlement payments filed by Daewoo Construction and GS Construction at the Seoul Central District Court on the 7th of next month.

This content was produced with the assistance of AI translation services.