The city of Seoul is expected to enter a legal dispute with the Apgujeong 3 District Reconstruction Association regarding the ownership of the land it possesses within the site of the Apgujeong Hyundai Apartments 3rd and 4th phases. The property, valued at over 350 billion won, is registered in the special planning area of the Seoul Apgujeong Apartment Zone, necessitating a legal battle with the association to protect this land.
Apgujeong District 3 is an area designated as a special planning area by the city of Seoul, covering a total area of 361,187.8 square meters, currently housing 3,946 units. It is located where the Hyundai 1st through 7th, 10th, 13th, and 14th phases were built, positioned in the middle of the 14 Apgujeong Apartment districts. The nine parcels of the disputed Hyundai 3rd and 4th phases amount to a total area of 40,706.6 square meters, with 4,655.2 square meters (11.4%) owned by the city of Seoul. Additionally, approximately 29,367.9 square meters (72.1%) is owned by Hyundai E&C and HDC Hyundai Development Company.
The current equity rate of the association is under analysis, and when combined, the total equity rate exceeds 100%. This is because Hyundai E&C and HDC Hyundai Development Company did not adequately settle land equity with the city of Seoul during the construction of the Apgujeong Apartments.
If the city of Seoul and the association enter into legal battles, there is a possibility that the reconstruction process will be delayed. It is also expected that Hyundai E&C and HDC Hyundai Development Company will not shy away from litigation to protect land ownership valued at over 2.24 trillion won. If the city is deprived of the land it received through contributed acceptance via lawsuit, there is a possibility that it may file another lawsuit against Hyundai E&C and HDC Hyundai Development Company.
On the 17th, a related official from the Property Management Division of the city of Seoul said, "There are various reasons for the lawsuits concerning the ownership of city-owned properties, so the methods of response will differ, but if the lawsuit requesting the return of land registered as city property is filed, we will have no choice but to respond defensively."
Given the city of Seoul's stance, considering that the Apgujeong District 3 Reconstruction Maintenance Project Association is preparing for a lawsuit, a large-scale litigation is anticipated. An association official noted, "We plan to file lawsuits against the city of Seoul, Hyundai E&C, and HDC Hyundai Development Company after consulting with the advisers within the association."
The nature of the properties owned by the city of Seoul is also expected to become a legal issue in the lawsuits between the city and the association. According to the National Property Management Act, national properties are broadly classified into administrative properties and general properties. Administrative properties are those used for public or communal purposes, such as roads, rivers, government buildings, and parks, and under Article 27 of the National Property Act, disposal, exchange, or transfer other than for a special purpose is strictly prohibited. Conversely, general properties exclude administrative properties and are managed under Article 41 of the National Property Act as properties that can be leased or disposed of.
Out of approximately 1,400 pyongs of land in the Apgujeong Hyundai area owned by the city of Seoul, only the area classified as administrative property is 466,527.5 square meters (approximately 86 pyongs). The rest is classified as general property for land purposes. Under civil law, possession for over 20 years is recognized as acquisitive prescription, but properties governed by the National Property Management Act are exempt from this rule. Legal experts believe that it is particularly difficult to reclaim administrative properties. A maintenance industry official stated, "If a lawsuit is filed, we will try to strategize to obtain ownership of the remaining land, excluding the land classified as administrative property." In relation to this, attorney Lee Min-ki from the Law Firm Yosu remarked, "It seems that it will be difficult to claim acquisitive prescription over the municipality's property."
Hyundai E&C and HDC Hyundai Development Company are also preparing for large-scale litigation. Each company is conducting a rights analysis on the land they own through lawyers from their legal team. This means they will look for countermeasures if a lawsuit is filed, as suddenly transferring land valued at over 2 trillion won to the reconstruction association would surely raise suspicions of misappropriation against the executives.
There is also the possibility that the lawsuit could expand to involve the city of Seoul and construction companies. If the city were to lose the land obtained through contributed acceptance in a lawsuit to the association, it might also file a subsequent lawsuit against Hyundai E&C and HDC Hyundai Development Company. An industry official stated, "There are numerous stakeholders involved, and substantial land ownership is at stake, making it quite complex," and added, "It may take several years until the court's final judgment, as we need to ascertain rights relationships that have existed for nearly 50 years and determine who genuinely holds ownership."
The city of Seoul has officially stated that there will be "no delays in the reconstruction" concerning land ownership issues in Apgujeong District 3. According to sources in the maintenance industry, it is necessary to clarify the rights relationships before the business implementation or management disposition permits are granted to progress the project. The district has about four years remaining, but the rights relationships may not be clearly resolved within this timeframe. Contrary to the city's plans, delays might occur.
Meanwhile, if the reconstruction of Apgujeong District 3 is delayed due to litigation involving the land owned by the city of Seoul, it is expected that there will be damage to the leadership of Seoul Mayor Oh Se-hoon. During his campaign as the People Power Party candidate for mayor in March 2021, he promised to deliver visible results within a year if elected; however, the city has instead become a hurdle for the reconstruction of Apgujeong, becoming a party to the lawsuit. Attorney Byun Seon-bo of the Law Firm Jium noted, "Due to the numerous contentious issues and high amounts at stake, it seems we will have to wait for the court's judgment," adding, "Similar problems have often arisen in similar areas of Gangnam, and when these issues arise during the reconstruction process, they ultimately get resolved through litigation."