Due to Poor Construction and Business Plans... LH Faces Consecutive Losses in Related Lawsuits

Korea Land and Housing Corporation (LH) [Image source=Yonhap News]

[Asia Economy Reporter Seongpil Jo] Korea Land and Housing Corporation (LH) has consecutively lost civil lawsuits ruled this month at the Seoul High Court and Seoul Central District Court, the largest courts in the country. The lawsuit amounts also reach several billion won. All are results of lawsuits caused by poor construction and project planning.

Defects Due to Poor Construction... 1.7 Billion Won Compensation

According to the legal community on the 2nd, the Seoul Central District Court Civil Division 36 (Chief Judge Hwang Soon-heon) ruled partially in favor of the plaintiff in a damages lawsuit filed by the residents' representative meeting of Apartment A located in Cheonan, Chungbuk against LH. The court ordered "LH to pay 1.7 billion won and delayed interest."

This lawsuit was filed because LH changed the construction differently from the design drawings or performed poor construction on the apartment. The residents' representative meeting filed a lawsuit demanding LH pay about 2.2 billion won in damages in lieu of defect repairs, citing defects such as cracks and leaks in the apartment walls occurring two years after moving in, in 2018.

The court accepted a significant part of the residents' representative meeting's claims. It stated, "It is recognized that actual leakage occurred in the apartment," and "LH, as the project owner, is responsible for compensating damages in lieu of defect repairs occurring in the apartment."

Claiming "No Payment Responsibility," Also Lost in Appeal

LH also recently lost in an unjust enrichment lawsuit filed by Korea District Heating Corporation. The Seoul High Court Civil Division 1 (Chief Judge Jeon Ji-won) ruled partially in favor of the plaintiff, ordering "LH to pay about 1.1 billion won to Korea District Heating Corporation."

Korea District Heating Corporation bore the cost of about 2.6 billion won for additional water supply pipeline construction and expansion of the water quality restoration center necessary for operating the collective energy facility supplying heat to Dongtan 2 New Town in June 2016, by paying LH. Later, Korea District Heating Corporation filed a lawsuit claiming that the original construction costs should have been paid by LH, the project implementer of Dongtan 2 New Town.

The appellate court reduced the compensation amount compared to the first trial but recognized the damages of Korea District Heating Corporation and ruled that LH has the obligation to return the unjust enrichment.

Korea Land and Housing Corporation (LH) and Daewoo Construction consortium signed a private participation project agreement and carried out public housing within the Suwon High School Residential Environment Project District.
[Image source=Prugio homepage]

Failure to Fulfill Local Government Approval Conditions... Appeal Filed

Earlier this month, LH also lost a settlement claim lawsuit filed by Daewoo Construction and others, receiving a judgment to pay 2.978 billion won. This was the result of LH proceeding with a public housing construction project within the Suwon High Residential Environment Improvement Project in Gyeonggi Province without requesting approval conditions from the local government or additional or changed project plans from private participants such as Daewoo Construction. LH filed an appeal with the Seoul Central District Court Civil Division 24 (Chief Judge Lee Seok-jae), which handled the case, disagreeing with the ruling.

Lawsuits involving LH continue. As of March, more than 40 new lawsuits were filed at the Seoul Central District Court. Among them, a considerable number are related to land development and housing construction work, like these recent lawsuits.

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