Real Estate Practice Group
Court Recognizes Independent Member Status and Allotment Rights for Bu…
2026-02-06
Court Recognizes Independent Member Status and Allotment Rights for Buyer Despite Seller's Temporary Multi-Property Ownership
1. Fact Summary and Background
The clients (Plaintiffs) purchased real estate located within the "C" Urban Environment Maintenance Project District i
n Seoul and completed the registration of ownership transfer.
However, a conflict arose because the seller (D) had purchased another property
within the same district immediately after selling the first property to the clients.
As a result, the seller (D) became a "multi-property owner" for a brief period of two days
before the clients finalized their ownership registration.
Based on the Act on the Improvement of Urban Areas and Residential Environments,
the Defendant (the Reconstruction Association) applied
the restriction that multiple owners shall be treated as a single member.
Consequently, the Association established a Management Disposal Plan
that granted only one joint allotment right to the clients and the seller collectively.
The clients faced the risk of losing their individual right to an apartment unit
due to circumstances beyond their control and sought legal assistance from LK Partners.
2. Key Legal Issues
The core issue of this case was the interpretation of Article 39, Paragraph 1, Item 3
of the Urban Improvement Act, which restricts membership status when multiple persons come
to own properties previously owned by a single person after the authorization of the association's establishment.
•The Association’s Argument: Following the literal text of the law, since the seller owned multiple properties
after the association was established, the buyers must be treated as a single member together with the seller.
•LK Partners’ Argument: The legislative intent of this provision is to prevent an artificial increase
in the number of members that could undermine project feasibility. We argued
that since the total number of eligible members had not increased compared to the time of the association’s establishment,
it was unjust to infringe upon the clients' property rights based on the "accidental circumstance" of the seller's temporary additional purchase.
3. Execution and Achievement
The court fully accepted LK Partners' legal reasoning and ruled in favor of the clients.
•Court's Ruling: If the number of persons entitled to allotment has not changed from
the time of the association’s establishment, the restriction
on membership status under the Urban Improvement Act should not be applied.
•Final Result: The court canceled the part of the Management Disposal Plan that designated
the clients and the seller as joint beneficiaries for a single unit.
This successfully restored the clients' status as sole beneficiaries entitled to independent allotment rights.
•Significance of the Case: This case is a meaningful precedent
that prevents bona fide buyers from being unfairly deprived of their rights through
a rigid interpretation of membership restriction laws. It clarifies
that the "number of members at the time of establishment"
should be the substantial standard for determining allotment rights.







