Supreme Court: "Public Certificates Also Considered Transfer-Prohibited Resident Savings Certificates Under the Housing Act"

Supreme Court, Seocho-dong, Seoul.

[Asia Economy Reporter Choi Seok-jin, Legal Affairs Specialist] The Supreme Court has ruled that the public authentication certificate linked to the bank where the Housing Subscription Comprehensive Savings account is opened is also considered an "occupant savings certificate," which is prohibited from transfer under the Housing Act.

In the past, when housing subscription was mainly done through on-site applications, it was common to transfer the subscription passbook itself. However, with the current widespread use of online applications, most cases require a public authentication certificate to apply for housing subscription, reflecting the reality in this ruling.

The Supreme Court's 2nd Division (Presiding Justice Min Yoo-sook) announced on the 19th that it overturned the original sentence of two years imprisonment in the appeal trial of Mr. A, who was indicted on charges of fraud, forgery of private documents, and violations of the Housing Act and Electronic Signature Act, and remanded the case to the Seoul Southern District Court.

According to the court, from June 2018 to around March 2020, Mr. A secured occupant savings certificates such as subscription passbooks or public authentication certificates from newlywed couples, multi-child families, and homeless persons who met the special apartment supply subscription requirements but could not apply due to economic reasons, and resold them for hundreds of millions of won to others seeking apartment allocations.

During this process, Mr. A also arbitrarily forged documents securing rights, such as pregnancy confirmation certificates or employment certificates in the names of the passbook transferors.

The first and second trials recognized most of Mr. A's charges as guilty and sentenced him to two years imprisonment.

However, they partially acquitted him of the Housing Act violation, ruling that items such as the front photo of the public authentication certificate and subscription passbook, subscription details, and account opening confirmation could not be considered as "occupant savings certificates."

Article 65 (Prohibition of Disruption of Supply Order) Paragraph 1 of the Housing Act states, "No one shall transfer or receive transfer, mediate transfer or receipt of any of the certificates or statuses listed below for the purpose of receiving or enabling others to receive housing constructed or supplied under this Act, nor advertise for such transfer or mediation. No one shall receive or enable others to receive certificates, statuses, or housing constructed or supplied under this Act by false or other fraudulent means," and in Item 2, it designates "occupant savings certificates under Article 56" as prohibited from transfer.

Article 56 (Occupant Savings) Paragraph 2 of the same Act defines "occupant savings" in Paragraph 1 as the Housing Subscription Comprehensive Savings subscribed to receive national or private housing supply.

The Supreme Court pointed out that the second trial's judgment was incorrect.

The court first stated, "The 'transfer of occupant savings certificates, etc.' prohibited as a disruption of housing supply order under Article 65 Paragraph 1 Item 2 of the Housing Act conceptually means an act that ultimately changes the legal or factual ownership of occupant savings certificates."

It further noted, "In the past, housing subscriptions were mainly done through on-site applications, so it was common to transfer the subscription passbook itself, which is the occupant savings certificate, to transfer the right to receive housing supply. However, recently, online applications have become widespread, and in most cases, a public authentication certificate linked to the bank where the Housing Subscription Comprehensive Savings account is opened is required to apply for housing subscription."

It added, "In banking practice, electronic passbooks have replaced physical passbooks, and physical subscription passbooks are often not issued from the start. Consequently, the method of transferring the right to receive housing supply has changed to exchanging 'public authentication certificates, security card numbers, passwords,' etc."

The court ruled, "In the reality where online applications are common, the act of transferring a public authentication certificate by a Housing Subscription Comprehensive Savings subscriber to a third party is an act that legally or factually changes the ultimate ownership of the occupant savings certificate and is included in the 'transfer of occupant savings certificates' prohibited by the Housing Act."

It also added, "Interpreting the transfer or receipt of public authentication certificates as included in the 'transfer or receipt of occupant savings certificates, etc.' under the Housing Act aligns with the legislative intent to prevent arbitrary transfer of the right to receive housing supply to third parties and to maintain a supply order focused on genuine demand."

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