A Book of the Land for Project Cost as a Method of the Notice Principle, and its Impact on the Acquisition of the Ownership of the Land for Project Cost - A counter-plan to Supreme Court Decision 2018Do13604, Decided October 14, 2022

Abstract

Recently, the Supreme Court of Korea reached a decision under the Urban Development Act, stating that the purchaser of “Chebiji,” also known as the “Land for Project Cost,” is regarded as a creditor until ownership acquisition through registration from the project operator. This decision marks a departure from the previous notion that the rights obtained by recording the purchaser’s name on the “Chebiji Daejang,” or “Book of the Land for Project Cost” were akin to property rights, following the precedent set by the formal Land Readjustment Project Act. Conversely, the Korean Trust Law and its Enforcement Decree are the sole legislative instruments that address the Book of the Land for Project Cost. The Korean Trust Law permits a specific type of property, classified as trust property, to contest against a third party if this fact is duly indicated in a book stipulated by Enforcement Decree. Notably, the Enforcement Decree includes the Book of the Land for Project Cost. However, the act of designating it as trust property holds no practical value for the purchaser prior to gaining full ownership of the land. Consequently, there exists a risk wherein the Project Operator could engage in double-selling of the Land for Project Cost, thereby diminishing the value of the land itself. While avenues such as seeking injunctions or proposing amendments to the rules of the Urban Development Association may offer mitigation measures, they do not provide a comprehensive solution. This is because they fail to prevent third parties from attaining ownership. Considering the original legislative intent behind the Land in the Urban Development Act, a revision of Article 42 (5) of the Urban Development Act becomes imperative.