Basic Principles of Unit Owners and Voting Rights under the Condominium Act

Under the Act on Ownership and Management of Condominium Buildings (hereinafter referred to simply as the “Condominium Act”), voting rights refer to the right to participate in resolutions at a general meeting of the management association, and all unit owners possess voting rights. The Condominium Act stipulates that, unless otherwise determined by the bylaws, each unit owner shall possess voting rights in proportion to the ratios set forth in Article 12 (Article 37, Paragraph 1).

Voting rights can be determined differently from the share ratio by the bylaws, so they may be set as “one voting right per exclusive part regardless of area” within a scope that does not violate equity.

A co-owner refers to a person who holds co-ownership rights to an exclusive portion and is typically registered as a co-owner in the registry (Article 2, Paragraph 2), but the Supreme Court has ruled that “a purchaser who has paid the full purchase price but has not received the registration of transfer of ownership due to circumstances on the seller's side may also become a member of the management association and exercise voting rights.”

Therefore, a purchaser who has not fully paid the purchase price will not be able to become a member of the management association or exercise voting rights as a co-owner. Under the Trust Act, a trust agreement is a contract based on an agreement between a settlor and a trustee that allows the trustee to manage and dispose of specific property rights; thus, if a co-owner has entrusted the ownership rights of the exclusive portion to the trustee, the voting rights shall be held by the trustee.

Requirements and Scope of Exercise of Voting Rights by a Possessor

A person occupying an exclusive portion with the consent of a co-owner may attend a general meeting of the management association regarding the management of common areas, a general meeting of the management association for the appointment of a manager, a general meeting of the management association to decide not to undergo an accounting audit, and a general meeting of the management association for the election of a management committee, and exercise the voting rights of a co-owner (Article 16, Paragraph 2; Article 24, Paragraph 4; Article 26-2, Paragraph 2; Article 26-4, Paragraph 5).

The phrase “a person occupying an exclusive portion with the consent of the co-owner” refers to the party who entered into a contract with the co-owner, and it should not be interpreted to include third parties such as the tenant’s spouse or direct lineal ascendants and descendants.

Such “exercise of voting rights by a possessor” means that a possessor can attend a meeting and exercise the voting rights of a co-owner without being separately granted proxy authority regarding the exercise of voting rights by the co-owner.

Provisions on the exercise of rights by proxy and voting rights of jointly owned property

On the other hand, “exercise of voting rights by an agent” is recognized as one of the methods of exercising voting rights by a co-owner (Article 38, Paragraph 2), and an agent may exercise voting rights only after being granted power of attorney by the co-owner. In this case, the agent must submit a written document proving the power of attorney to the chairperson before exercising the voting rights.

The “exercise of voting rights by proxy” under Article 38, Paragraph 2 of the Condominium Act means that a co-owner may exercise their voting rights through a proxy even if they do not attend the general meeting of the management association in person. While the bylaws may restrict the persons who can serve as proxy to a certain scope (e.g., relatives, occupants, other co-owners, etc.), if there is no provision regarding this, anyone may serve as a proxy regardless of whether they are a relative or a co-owner.

Article 37, Paragraph 2 of the Condominium Act, which requires that one of the co-owners to exercise voting rights at the general meeting of the management association be designated when a single exclusive part is shared by multiple people, is a mandatory provision.