Apartment and Commercial Building 'Defect Repair' Claim Period Set to 5 Years... Constitutional Court Unanimously Upholds Constitutionality

Constitutional Court: "Legislative Purpose Justified to Prevent Increase in Disputes Over Defects"

Chief Justice Yoo Nam-seok of the Constitutional Court, along with other constitutional justices, entered and took their seats in the Grand Bench of the Constitutional Court in Jongno-gu, Seoul, on the afternoon of the 27th of last month.
[Image source=Yonhap News]

[Asia Economy Reporter Heo Kyung-jun] The Constitutional Court has made its first ruling that the legal provision limiting the period to claim damages for defects occurring in the common areas of collective buildings such as apartments or commercial buildings to within 5 years from the date of the usage inspection is constitutional.

On the 3rd, the Constitutional Court announced that it unanimously ruled constitutional in the case of a constitutional complaint filed by the residents' representative council of Apartment A against Article 9-2, Paragraph 1 of the Act on Collective Buildings.

Article 9-2, Paragraph 1 of the Act on Collective Buildings stipulates that the rights of individual owners regarding warranty liability must be exercised within a prescribed period. Paragraph 2 of the same article sets the statute of limitations period as follows: 10 years for defects in major structural parts and ground construction, and 5 years for defects other than these.

Korea Land and Housing Corporation (LH) constructed and sold Apartment A in Buk-gu, Busan. The apartment received its usage inspection in November 2009, and among the units, 344 were leased as public rental housing. After the mandatory 5-year rental period expired, starting from January 2015, the units were sold through a sale conversion method.

Subsequently, due to improper construction, changes during construction, or poor workmanship during the apartment's construction process, defects such as cracks and leaks occurred in both exclusive and common areas. The residents transferred authority to the residents' representative council to file a damages lawsuit on their behalf. In June 2016, the residents' representative council filed a lawsuit against LH for repayment.

The first trial acknowledged the occurrence of defects in parts of the building but ruled against the plaintiffs, stating that the statute of limitations (5 years from the usage inspection date) had expired and the claim for damages had extinguished. The second trial upheld the first trial's judgment, and the ruling was finalized. During the appeal process, the residents' representative council requested a constitutional review of the law, but after it was dismissed, they filed a constitutional complaint.

The Constitutional Court stated, "Setting a statute of limitations of 5 years or less from the date of usage inspection or approval for warranty claims related to relatively minor defects other than major structural parts and ground construction defects in common areas is intended to prevent an increase and prolongation of disputes over defects in collective buildings and to resolve legal instability early. The legislative purpose is legitimate, and the limitation on the exercise period of rights is an appropriate means to achieve the legislative purpose."

Furthermore, the court ruled, "If the statute of limitations for defects in common areas were to proceed individually, developers and others would bear warranty liability for an excessively long period. In the case of rental housing converted to sale, there is also an institutional mechanism allowing tenants to request repair and maintenance of common areas from landlords, so setting the starting point of the statute of limitations for defects in common areas as the date of usage inspection is not unreasonable."

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