Controversy Over Landowners' Right to Apply for Urban Renewal Project Units... Conflicting Court Rulings

View of areas densely populated with villas and multi-family houses in Seoul / Photo by Yonhap News

[Asia Economy Reporter Noh Kyung-jo] There are calls for clarification as courts have issued conflicting rulings on whether landowners who acquired real estate after the approval of the establishment of a union in urban redevelopment projects have the right to apply for housing allocation.

According to the construction industry and legal circles on the 16th, the Seoul High Court ruled in a 'confirmation of union member status' lawsuit last September that "the representative union member and all other landowners should be considered as one union member and supplied with one housing unit." This means that even if there are 10 landowners, only one housing allocation right corresponding to the representative union member is recognized.

The court considered the legislative intent of Article 39, Paragraph 1 of the Urban Redevelopment Act, which aims to prevent disruption in redevelopment projects caused by an increase in the number of union members due to so-called 'share splitting.'

Furthermore, the court stated that if one housing unit is supplied to all simply because many acquired land after the approval of the union establishment, it would undermine the purpose of the law revision intended to block speculative forces and protect the rights of existing union members.

Regarding this, a Ministry of Land, Infrastructure and Transport official explained, "In many cases, transferring multiple real estate properties owned by one person after the approval of the union establishment is intended to raise market prices through transactions," adding, "The law also serves as a warning not to mistakenly join as a landowner."

The Seoul High Court also noted that recognizing union member status does not necessarily lead to granting the right to apply for one housing unit to that union member. This is because the law presupposes cases where landowners recognized as union members receive only shared ownership rights that do not amount to one housing unit.

The problem is that this ruling contradicts the 2020 judgment of the Gwangju High Court. At that time, the Gwangju High Court ruled in a 'cancellation of management disposition plan' lawsuit that "independent housing allocation rights are recognized for landowners other than the representative union member."

The court cited the absence of any explicit regulation depriving landowners of their housing allocation rights while recognizing their union member status. It also stated that the number of union members and the number of housing allocation recipients cannot necessarily be considered identical.

Regarding the completely opposing rulings of the high courts, the law firm Taepyungyang stated, "It has become clear that the positions of lower courts on this issue remain unsettled," adding, "Currently, an appeal is underway regarding the same issue in the Busan High Court ruling (confirmation of union member status lawsuit), so a clear judgment from the Supreme Court is expected soon."

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