3 Pillars for Preventing Condominium Disputes

Building-specific management groups, partial common area management groups, and complex management groups

According to the “Act on Ownership and Management of Condominium Buildings,” when a co-ownership relationship is established for a building, a management association (hereinafter referred to as the “Building Management Association”) composed of all co-owners is automatically established without a separate establishment procedure (Article 23, Paragraph 1).

Meanwhile, there are cases where there are 'partially common areas' that are clearly provided exclusively for the common use of some co-owners. In such cases, separate bylaws may be established for the management of the said partially common areas, and a separate management association (hereinafter referred to as the Partially Common Area Management Association) may be established (Article 23, Paragraph 2; Article 28, Paragraph 2).

Therefore, a building management association and a partial common area management association can coexist within a single building. A typical example is a mixed-use building consisting of commercial units and apartments, where commercial unit owners form a separate management association to manage the common areas of the commercial units.

The management of these partial common areas is strictly a joint undertaking by those co-owners. For this reason, the law stipulates that a management association may be formed consisting solely of some co-owners. However, the establishment of such a management association for partial common areas is not legally mandatory and is left to the voluntary choice of the relevant co-owners.

In that case, how is it determined whether a part of a multi-unit building is a 'partially common area'?

According to Supreme Court precedents, the overall structure of the condominium, the location and purpose of the relevant common area, its current usage status, entries in the land registry or building register, and whether there is a separate agreement among the co-owners are generally used as comprehensive criteria. Through this, it is determined whether the area is provided for the common use of all co-owners or only some of them (see Supreme Court Judgment 2006da56565 decided July 12, 2007).

In cases where partial common areas are recognized in specific matters, the Partial Common Area Management Association may independently decide on matters concerning the management of said partial common areas. However, matters concerning the entire common area, or matters concerning partial common areas that affect the interests of all co-owners, must be decided by a resolution of the general meeting of the building management association (Articles 14, 15, and 16). Furthermore, in cases where there are multiple buildings within a complex and the owners share the land or ancillary facilities within the complex, a 'complex management association' may be formed separately from the building management association (Article 51, Paragraph 1).

In this case, if the building management association and the complex manager overlap, the building management association is responsible for building management, while the complex management association is responsible for the management of land or ancillary facilities within the complex, which can be inefficient in practice. To address this, the Condominium Act includes Article 51, Paragraph 3. This provision allows the complex management association to take over and carry out all or part of the business of the building-specific management association if there is a resolution by the general meeting of management associations with at least three-quarters of the unit owners and voting rights for each building.

Therefore, if each building satisfies the above resolution requirements and the complex management association jointly manages not only shared land or ancillary facilities but the entire complex, the complex management association becomes a single integrated organization.

Subsequently, the complex management association may take the lead in electing a manager, establishing bylaws, and holding general meetings. At this time, the requirements for resolutions only need to be met for the 'entire complex,' not for each individual building. For example, if the complex management association establishes general bylaws, they are legally established if approved by at least three-quarters of the total unit owners and voting rights of the entire complex.

 As such, the various forms of management association structures stipulated by the Condominium Act are legal mechanisms designed to resolve the complexity of interests within the complex and maximize management efficiency.

Therefore, owners and management entities of mixed-use buildings or large-scale collective buildings must carefully examine which management system is most suitable for the structure of their complex. Furthermore, to prevent procedural defects that may arise during the process of integrating or separating management authority, strictly adhering to the resolution requirements stipulated by law will be the sure first step in preventing disputes and protecting the value of the building.