A court issued a settlement recommendation ordering Hyundai E&C to return ownership of some parcels of the Hyundai Apartments in Apgujeong-dong, Gangnam District, Seoul, to the original owners, the actual apartment owners. A settlement recommendation is a decision in which the court, to resolve a case, recommends that both parties settle (reach an agreement) under certain terms. If the parties do not file an objection within two weeks, it has the same effect as a finalized judgment, and compulsory execution is possible if it is violated. If an objection is filed, the lawsuit resumes.
According to the maintenance industry and legal circles on the 17th, the day before, the Seoul Central District Court decided that two parcels among the parcels of the Hyundai Apartments phases 3 and 4 in Apgujeong District 3 held by Hyundai E&C should be transferred to the original owners unconditionally. Earlier, 125 owners of phases 3 and 4 filed a lawsuit to regain ownership of these parcels, and the court sided with them. By market value, it is land worth about 125 billion won.
Apgujeong District 3 is an area designated by Seoul City as a special planning district, with a total area of 360,187.8㎡ and 3,946 households at present. It is where Hyundai phases 1 through 7, 10, 13, and 14 are located, and sits in the middle among the six Apgujeong apartment districts. Of these, nine parcels (total area 40,706.6㎡) of the Hyundai phases 3 and 4 apartments are held by Seoul City, Hyundai E&C, and HDC Hyundai Development Company. The problem arose because, during the registration process, ownership of only the buildings was transferred to the people who purchased the apartments, while ownership of the land was not transferred.
In apartment complexes and other multi-family housing, co-owners share equity in the site and the building at certain ratios. And when all these shares are combined, the ratio of the entire building and land must be 100%. However, as Hyundai E&C and Seoul City developed this area, they did not properly transfer land ownership to apartment buyers, causing the share ratio to exceed 100%, and as a result, since the development of the Apgujeong apartment district in the 1970s to the present, Seoul City and construction companies have remained registered as land owners. Considering the equity ratio and market value of the land held by Seoul City and the construction company, it is about 2.6 trillion won.
A maintenance industry official said, "If the settlement recommendation is finalized, it will serve as a guiding precedent in additional lawsuits to reclaim land worth more than 2 trillion won going forward." A Hyundai E&C official said, "We have received the litigation result and are formulating the company's position on whether to accept the settlement recommendation."
Meanwhile, Seoul City, Hyundai E&C, HDC Hyundai Development Company, and the Apgujeong District 3 reconstruction association have established and are operating a task force (TF) to resolve this issue.