A management association is an association of all owners automatically formed in accordance with the law to manage a collective building, such as an officetel, commercial building, or apartment, and to protect the rights of the owners. It is automatically established when a separate ownership relationship is established without any special establishment procedures and the need for joint management of the building arises [Article 23, Paragraph 1 of the Act on Ownership and Management of Condominium Buildings (hereinafter referred to only as the “Condominium Act”)].

Therefore, the formation of a preparatory committee for the establishment of the management association, the establishment of bylaws, the appointment of a manager, and the consent of co-owners are not requirements for the establishment of the management association. The members of the management association are co-owners, and all co-owners automatically become members in accordance with the provisions of the law regardless of their own will, and cannot refuse to become members.

Furthermore, withdrawal is not permitted while holding the status of a co-owner. The Supreme Court has ruled that “an organization composed of co-owners that conforms to the intent of Article 23, Paragraph 1 of the Act on Ownership and Management of Condominium Buildings may perform the role of a management association regardless of its form of existence or name” (Supreme Court Decision 94da27199, decided August 23, 1996).

When the sale of a multi-unit building commences and occupancy takes place, creating a need for joint management, a management association is automatically established with all unit owners, including those who were not sold at that time, as its members (Supreme Court Judgment 2003da45496 decided on November 10, 2005).

Why is the management association important to co-owners?

For co-owners, understanding the existence of the management association is not merely about knowing the law, but a process of learning how to exercise their legitimate property rights.

First, the management association serves as a strong safeguard supporting the asset value of co-owners. Since the value of individual assets increases only when the building is kept clean and safe, owners recognizing their rightful place as members of the association is a valuable starting point for protecting their assets.

Secondly, the owners' interest serves as the foundation for operating the building more transparently and rationally. Rather than acting as an obligation mandated by others, the building's operating environment can only become healthier when each and every owner takes an interest in the use of management fees and common spaces as a true owner.

Establishment of Management Bylaws and Quorum for Resolutions

In order to establish regulations for the management of the entire building, approval is required from at least three-quarters of the unit owners and at least three-quarters of the voting rights at a general meeting of the management association composed of all unit owners (Article 29, Paragraph 1 of the Condominium Act). According to the Condominium Act, all matters concerning the management of a building, excluding management regulations or matters delegated to the manager by the Condominium Act, may be determined at the general meeting of the management association (Article 31 of the Condominium Act).

In addition, the Condominium Act stipulates that both the ratio of unit owners and voting rights must be satisfied regarding the quorum for a general meeting of the management association (Articles 15, 16, 29, etc. of the Condominium Act).

In a case where the developer owns unit 52% among the exclusive portions of a multi-unit building and unit 48% has been sold, even if the developer holds ownership rights to unit 52%, the number of unit owners is only one, so a resolution of the general meeting cannot be passed by the developer alone. Furthermore, even if the unit owners of unit 48% excluding the developer reach an agreement, it is difficult to pass a resolution because, although the number of unit owners is an absolute majority, their voting rights do not reach a majority. Therefore, the developer and the other unit owners must consult with each other to decide matters regarding building management.

What happens if the owner doesn't take an interest?

If co-owners neglect their valuable right to the 'management association,' they may face difficulties in exercising their property rights effectively. First, reduced communication among owners risks lowering management efficiency. Failure to reach a smooth agreement may lead to delays in important building repairs or regulatory changes, which ultimately results in the deterioration of the building or inconvenience in daily life.

Furthermore, there is a risk that the legitimate rights of owners will be neglected due to indifference. If you do not participate with the mindset that "someone else will do it for me," you may fail to exercise your valuable voting rights at the crucial moment when the future of the building must be decided, potentially leading to a decision that differs from your wishes.

The relationship between the management association and the residents' representative council

The management association is an organization that is automatically composed of all unit owners in accordance with the Condominium Act and decides on matters concerning the management of the building, land, and ancillary facilities, and the residents' representative council is an organization composed of residents and users of the apartment complex in accordance with the Apartment Complex Management Act and decides on matters concerning the management of the apartment complex.

Therefore, theoretically, in the case of multi-unit housing, a management association under the Condominium Act and a residents' representative council under the Multi-unit Housing Management Act can exist simultaneously; however, in cases subject to the Multi-unit Housing Management Act, such as apartments, a residents' representative council is generally formed to handle building management. Case law also regards the residents' representative council as having the same status as the management association when it performs the role of the management association (Seoul Administrative Court Judgment 2006Guhap39086, decided March 16, 2007).

Ultimately, clearly recognizing the legally established status of the management association and fulfilling its role is tantamount to fully safeguarding your valuable rights as owners. Please do not forget that the management association is not merely a name existing in the legal code, but a force that actually moves the value of our building.