Hello, this is Lawyer Bae Gi-hyung from Cheongchul Law Firm.

Recently, the Supreme Court made a notable ruling regarding the enforceability of the contents of a trust agreement recorded in the registry.

This ruling pertains to a specific situation in which the ‘subject responsible for the management fees of a collective building is designated as the trustor’ in the trust agreement included in the trust registry. However, it seems likely to have a significant impact on future practices, as it may be applied to most cases involving the enforceability of the trust registry.

[Question] Can the contents of the trust agreement included in the trust registry be asserted and opposed against a third party?

[Answer] Even if the contents of the trust agreement are recorded and become part of the registration record, they cannot be opposed to a third party.

The crux of the Supreme Court ruling on February 13, 2025, in case 2022Da233164 was whether “a clause in the trust agreement that the trustor is responsible for costs has enforceability against a third party (the management unit)”. The trustee argued that “since it is clearly stipulated in the trust agreement that the trustor has the obligation to bear the costs, I have no responsibility to pay.” However, the dispute arose over whether such a claim could indeed be made.

The facts of the case are as follows:

Regarding this, the Supreme Court ruling on February 13, 2025, in case 2022Da233164 stated that “Article 4, Paragraph 1 of the Trust Act, completely amended by Law No. 10924 on July 25, 2011, and enforced on July 26, 2012, stipulates, ‘As for property rights that can be registered, the registration of the trust can oppose that the property belongs to the trust property to a third party.’ The purpose of this regulation is that when a property is registered in trust, it can oppose to third parties that the property constitutes trust property independently from the trustee’s other properties. Therefore, unless there are special circumstances, even if the content of the trust agreement is recorded in the trust registry as part of the registration document under Article 81, Paragraph 3 of the Real Estate Registration Act, it cannot be opposed to a third party except for matters concerning the composition of trust property as stated above.”

In other words, just because the trust has been registered, the contractual content that exceeds ‘the attribution of trust property’ (e.g., who bears the management fees) cannot be opposed to a third party.

This ruling clarified that “the enforceability of the trust registration under the Trust Act is limited to issues of property attribution.” In other words, even if the trustee and the trustor promise any burden relationship during the operation of the trust property, it has become difficult to assert it against third parties (such as the management unit).

Until this ruling, the Supreme Court had continued to determine that the contents of the trust agreement recorded in the trust registry could be opposed to third parties (as seen in the Supreme Court ruling on February 17, 2022, case 2019Da300095 (main action), 2019Da300101 (counteraction), etc.), but it seems that case law has practically changed with this ruling.

Ultimately, the Supreme Court's clear position is that even if it is written in the trust agreement that “the trustor shall bear the management fees,” and that content is recorded in the trust registry, it does not constitute a ground for exemption from liability against a third party. Therefore, it can be very risky to engage in transactions concerning trust real estate under the premise that the entire content of the trust agreement can simply be claimed against third parties. Similarly, in various legal disputes surrounding real estate trusts, there is a high likelihood that different conclusions about the liabilities of trustees based on the contents of the trust agreement will be reached, so parties experiencing or anticipating legal disputes should carefully examine the legal principles of this new Supreme Court ruling.

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