The Warranty Liability under the Act on Ownership and Management of Condominium Buildings and Fairness in Rental Housing Conversion

The warranty liability provisions under the Act on Ownership and Management of Condominium Buildings (hereinafter “the Act”) are, in principle, intended to protect the rights of sectional owners by imposing a certain scope of liability for defects on the project owner of newly constructed buildings. However, there is ambiguity as to whether the same warranty liability rules apply even in cases where a conversion to sale units takes place after a certain period of lease without the initial intent to sell. The Supreme Court ruling subject to this study examines in detail the applicability of the Act's warranty liability rules to rental housing converted into sale units. Notably, the ruling acknowledges the application of the pre-amended version of the Act in the same housing complex, and recognizes different scopes of liability for defects depending on the timing and legal basis, even within the same complex and under identical circumstances. This conclusion may risk undermining legal stability and the coherence of the legal system, as it introduces inconsistencies and unpredictability. Consequently, the judgment implies that a legislative amendment is necessary to clarify whether the Act's warranty liability rules apply to rental housing converted into sale units. Furthermore, it suggests the need for legislative and institutional revisions to ensure legal stability and predictability in future rulings.