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Apgujeong Zone 3 Members File Lawsuit Against Hyundai E&C for Transfer of Land Ownership

[비즈한국] It has been confirmed through BizHankook’s reporting that members of Apgujeong Zone 3 in Gangnam-gu, Seoul—often referred to as the biggest reconstruction project in Korea—have recently filed a lawsuit against Hyundai E&C000720 to reclaim ownership of the apartment complex land. The ownership issue has emerged as a new obstacle to the reconstruction project, as it was recently discovered that some of the land titles in Apgujeong Zone 3 are held not by the apartment residents, but by Hyundai E&C, the Seoul Metropolitan Government, and Hankook Urban Development (now HDC Hyundai Development Company294870).

According to industry sources, 77 members (50 households) of the Apgujeong Zone 3 Reconstruction Association filed a lawsuit for the registration of transfer of ownership against Hyundai E&C on the 1st. The core of their argument is that because the members have acquired the Apgujeong Zone 3 apartment land through acquisitive prescription, Hyundai E&C should transfer the land shares to them. The land currently subject to the lawsuit consists of two plots held by Hyundai E&C in the vicinity of Apgujeong Hyundai Apartment Complex 3, and the members plan to file additional lawsuits for the remaining seven plots that have not yet been fully transferred to them.

In this lawsuit, the members are claiming ownership based on acquisitive prescription due to long-term possession. Acquisitive prescription refers to the legal recognition of a factual situation as a true right when that situation has persisted for a certain period. Civil law stipulates that if one has occupied land without issue for 20 years, one acquires ownership upon registration. Supreme Court precedents hold that since a building generally cannot exist without land, the owner of the building is considered to be in possession of the land. In other words, the residents, who have occupied the land by owning the apartments for over 20 years, are asserting their right to the land ownership.

Hyundai E&C currently holds shares in nine plots of land (40,707㎡) in Apgujeong Zone 3, along with the Seoul Metropolitan Government and HDC Hyundai Development Company. Seven plots (33,203㎡) are jointly owned by Hyundai E&C, the Seoul Metropolitan Government, and HDC, while the two plots involved in this lawsuit (7,504㎡) are held exclusively by Hyundai E&C. Typically, land ownership is transferred to the apartment buyers at the time of completion; however, for some reason, ownership of these plots was never fully transferred to the residents even after the buildings were completed.

Apgujeong Zone 3 is the largest redevelopment site in the Apgujeong Apartment District. Currently, the district is pushing for reconstruction by dividing the Hyundai (1st–14th complexes), Hanyang (1st–8th complexes), and Miseong (1st–2nd complexes) apartments into six zones. Apgujeong Zone 3 comprises 3,934 apartment units—including Hyundai 1st–7th, 10th, 13th, and 14th, Daelim Acroville, Daelim Villat, and Hyundai Villat—and 224 commercial units, covering a total area of 400,000㎡. The Hyundai apartments, which make up the majority of the district, were built in the 1970s and 1980s by Hyundai E&C (1st–3rd) and Hankook Urban Development (now HDC, 4th–14th), which was formerly the housing division of Hyundai E&C.

Choi Jeong-pil, a partner lawyer at Law Firm Roel who is representing the members, stated, "Since the association holds the authority to manage and dispose of members' ownership rights following the approval of the management and disposal plan, the members must file the lawsuit themselves to reclaim land ownership. Because a lawsuit to reclaim land ownership involves changes to members' land shares, failing to file at the right time could lead to repetitive and unnecessary appraisal and licensing procedures. We initiated this lawsuit to find a solution without ignoring the problem for the sake of a speedy reconstruction." Lawyer Choi is a member of the Apgujeong Zone 3 association and specializes in real estate at Law Firm Roel.