a. Party Represented by Barun Law

We represented the plaintiff which was a housing reconstruction association (hereinafter referred to as the "association") established for the purpose of carrying out a housing reconstruction project in accordance with the Urban and Residential Environment Improvement Act, and the defendant was the owner of a building straddling the redevelopment area.

b. Background of the Case

The association exercised its right to claim a sale for the building straddling the project area, requesting the execution of a title transfer registration procedure for the property and delivery of the real estate on the basis of the constitution of the sale contract.

c. Litigation Details

In the first trial, the court dismissed the association's claim without making a concrete judgment, stating that "land or buildings in an area not part of a residential complex within the redevelopment area that are subject to sale claims should be understood to mean land or buildings wholly included within the redevelopment area," following previous legal principles (Seoul Eastern District Court Decision 2011Gahap8636, dated July 12, 2013, and the appeal decision of the Seoul High Court Decision 2013Na51003, dated December 17, 2014; Seoul Central District Court Decision 2008Na14472, dated November 18, 2008, and the Supreme Court Decision 2008Da96574, dated April 23, 2009). We represented the association from the appeal stage.

2. Judgment

The court, based on our arguments, ruled, "While it is undisputed that land or buildings entirely outside the redevelopment area cannot be subject to a sale claim under Articles 39 and 16(3) of the old Urban Renewal Act, it is not reasonable to interpret the phrase 'land or buildings not within a residential complex included in the redevelopment area' to mean that only land or buildings 'wholly' included in the redevelopment area qualify. in cases where a building or land straddles the boundary of the redevelopment area, this constitutes a third category, different from cases where the whole is included or excluded unless demolished or divided, considering that the old Urban Renewal Act defines the 'land or building owner' who can become a member of a housing reconstruction project as the owner of land or buildings located 'within the redevelopment area' and the owner of housing located 'outside the redevelopment area, 'it seems that the old Urban Renewal Act did not intend to legislate for this third case. Taking all these points into account, the court may individually assess whether a sale claim can be exercised in such cases by considering factors such as the redevelopment area's location and function, the proportion of the building or land within the redevelopment area, and the circumstances leading to only part of the property being included." As a result, the court overturned the first decision and upheld the association's claims in full.

3. Our Argument and Role

We emphasized that the existing legal principles could not be mechanically applied to this case.

Through an appraisal, it was confirmed that only 14 square meters, or approximately 4 pyeong (about 0.03% of the total redevelopment area), of the contested building was outside the redevelopment area.

We also pointed out that the land in question had already been designated as part of the city's planned road network before the association's promotion committee was established. The association had no involvement in this designation, and it was not feasible to push for a change in the redevelopment area. The land also functioned as a key road for both the redevelopment project and adjacent development projects, meaning that failure to secure the land would hinder the provision of essential infrastructure.

We further explained that despite the poor infrastructure, the project proceeded as a reconstruction project due to the existence of the "single-family house reconstruction project" under the old Urban Renewal Act. Although this program had been abolished in 2012, 12 years ago, due to its overlap with redevelopment projects, since ongoing projects based on previously established basic plans were allowed to continue, the association was forced to continue the redevelopment project formally as a "single-family house reconstruction project."


4. Significance of the Judgment

Lower courts had traditionally taken a cautious stance regarding sale claims involving properties that straddle the boundary of a redevelopment area, emphasizing that recognizing sale claims for portions of properties within the redevelopment area could force owners to partially demolish buildings and suffer significant economic losses, essentially coercing them into selling the remaining portions of their property and infringing on their property rights.

▶ However, strict adherence to this legal principle, even in cases where the portion outside the redevelopment area is minimal or where that portion is necessary for the provision of essential infrastructure, has sometimes hindered the progress of redevelopment projects.

▶ This judgment is significant in that it recognized an exception to this principle, establishing that the court can individually assess factors such as the proportion of the property within the redevelopment area, its location, function, and other circumstances when deciding whether to grant a sale claim, thus addressing some of the unreasonable aspects of previous decisions in redevelopment projects.

□  Attorneys in charge: Kim So-Youn, Kim Yong-Woo and Kim Chae-Young