Hello, this is Cheongchul Law Firm.

What if the officetel or urban-living unit you purchased turns out to differ from the design drawings after completion, or if the resale-permission explanation you received at signing was untrue? "Just changing your mind" rarely supports rescission, but active misrepresentation by the developer or a material breach of disclosure duty can give you legal grounds to challenge the contract. This article walks through the key issues in pre-sale contract rescission and termination.

[Contents]

1. Misrepresented resale restrictions — when fraud-based rescission applies

2. Construction differing from the design — disclosure-duty violations

3. Can you terminate by forfeiting only the deposit after paying intermediate payments?

4. Core issues and evidence in pre-sale disputes

5. How Cheongchul Law Firm handles pre-sale contract disputes

1. Misrepresented resale restrictions — when fraud-based rescission applies

If you were told at signing that "resale is allowed" but the unit was in fact subject to resale restrictions, you may consider rescinding the pre-sale contract on the ground of fraud (i.e., deception). Courts, however, treat a buyer's mere subjective expectation that "resale would be easy" as insufficient.

To establish fraud-based rescission, the court will examine the following factors together.

• Whether the buyer's confirmation document referenced the relevant statute — if the resale-restriction law was listed in the confirmation, "I didn't know" arguments weaken.

• Whether the sales agent made an active false statement — mere omission is not enough; an affirmative representation that "no restriction applies" is required.

• Whether the buyer expressly indicated a resale purpose — the buyer must have made the resale intent clear to the developer to establish causation.

2. Construction differing from the design — disclosure-duty violations

A column intruding into your unit, a large ventilation duct or exhaust fan on the rooftop terrace, or common-use facilities encroaching on your private area can all become disputes. But "minor inconvenience" alone usually does not support rescission or damages.

(a) When a disclosure-duty violation is recognized

Where a column or common ventilation duct has a material impact on use, traffic flow, aesthetics, or value of the private area, the developer's disclosure duty becomes a live issue. Frequently litigated examples in officetels and urban-living units include:

• Common-use exhaust fan on the rooftop terrace — noise, aesthetics, usage restrictions

• Large columns inside the private unit — furniture layout and flow obstruction

• Common-use facilities encroaching the private area — leakage and maintenance liability

(b) What needs to be proved

Sales catalogs, model-house photos, advertising materials, and copies of design drawings should objectively show the gap between what was represented and what was actually built. Purely subjective complaints rarely succeed in court.

3. Can you terminate by forfeiting only the deposit after paying intermediate payments?

Under Article 565 of the Korean Civil Code, where the deposit is treated as earnest money, a party may rescind the contract by forfeiting the deposit before either party commences performance. Once performance has commenced, however, mere deposit forfeiture is usually no longer sufficient.

Typical acts treated as "commencement of performance" include:

• Payment of intermediate installments — once the buyer pays the interim payment

• Disbursement of the loan — when the pre-sale loan has actually been drawn and remitted to the developer

• Steps toward title transfer — registration or name-transfer procedures already in motion

In officetel pre-sale contracts in particular, intermediate-payment status and loan-disbursement status are decisive turning points. If you are considering termination, ideally seek legal review before performance has commenced.

4. Core issues and evidence in pre-sale disputes

Pre-sale disputes turn on how objectively you can prove "what was represented and how reality differed." Have the following ready in advance:

• Original pre-sale contract and confirmation documents

• Sales catalogs, advertisements, and model-house photos

• Text messages and recordings with the sales agent

• On-site photos after completion (column, ventilation, common-use facilities)

• Intermediate-payment receipts and loan-disbursement records

5. How Cheongchul Law Firm handles pre-sale contract disputes

Cheongchul Law Firm has represented numerous buyers in officetel and urban-living-unit pre-sale disputes, handling fraud-based rescission, disclosure-duty damages, and earnest-money termination. If you are considering rescission or termination of a pre-sale contract, it is most effective to consult an attorney before performance has commenced.

If you are facing a pre-sale dispute, please contact Cheongchul Law Firm.

This article is provided for general informational purposes only and does not constitute legal advice on any specific matter. Individual cases turn on their facts, so please consult an attorney for case-specific advice.