Cheongchul Law Firm (Attorney in Charge: Park Jong-han) has achieved a Supreme Court reversal (full victory) ruling regarding the validity of contracts entered into by regional housing cooperatives.

• Housing cooperatives related to apartment construction are broadly divided into two categories: redevelopment and reconstruction cooperatives based on the Urban and Residential Environment Improvement Act (hereinafter referred to as “Urban Improvement Act”), and housing cooperatives based on the Housing Act. Among these, the housing cooperatives based on the Housing Act include ‘regional housing cooperatives’, ‘workplace housing cooperatives’, and ‘remodeling housing cooperatives’. Currently, the most actively established type of cooperative is the ‘regional housing cooperative’.

• So far, lower court precedents have inconsistently judged the validity of contracts entered into without the approval of the general assembly of the regional housing cooperative for ‘contracts that impose burdens on members outside of budgeted items’. In contrast to the uniform ruling that such contracts are null and void if the essential resolutions of the general assembly are not passed in the case of cooperatives under the Urban Improvement Act, some lower courts have considered those contracts valid even if they did not go through the general assembly, while others have ruled them void without such approval, showing varying attitudes across different lower courts.

• Recently, the Supreme Court took the position that in the case of regional housing cooperatives under the Housing Act, ‘contracts that impose burdens on members outside of budgeted items’ are essential resolutions of the general assembly, thus requiring an assembly resolution, thereby unifying the attitudes of the lower court precedents.

The Supreme Court reversal ruling achieved by Cheongchul Law Firm (full victory) is a leading case that clearly states that contracts entered into by regional housing cooperatives under the Housing Act must go through essential cooperative general assembly resolutions. Furthermore, it holds significant meaning that such a result was achieved against a major law firm.

The Supreme Court fully accepted Cheongchul's opinion and issued a ruling to overturn and remand the original judgment (the second trial).