Most Tenant Claims Recognized
Another Loss Following Gimpo I-Park in Gyeonggi
On the 4th of last month, Chairman Chung Mong-gyu and HDC Hyundai Development Company (HDC) management greeted attendees at a press conference held at the HDC Yongsan headquarters in Seoul, where additional measures related to the Gwangju Hwajeong-dong I'Park accident recovery were announced. Photo by Moon Honam munonam@
[Asia Economy Reporter Kim Daehyun] HDC Hyundai Development Company (HDC), which caused the exterior wall collapse accident at the newly built I-Park apartment in Gwangju last year, lost the first trial in a lawsuit claiming defect repair guarantee deposits worth around 6 billion KRW against the apartment residents of a newly built and sold apartment in Daegu.
According to the court on the 28th, the Civil Division 28 of the Seoul Central District Court (Presiding Judge Yoon Dogeun) recently ruled partially in favor of the plaintiff in the first trial of the damages claim lawsuit filed by the Daegu A I-Park apartment residents' representative meeting against HDC and the Housing and Urban Guarantee Corporation (HUG) due to defects in the apartment building.
The court ruled, "HDC must pay 5,905,990,000 KRW to the residents' representative meeting." Additionally, HUG was ordered to pay about 53 million KRW separately to the residents, with HDC jointly bearing about 1.4 billion KRW of that amount. Unlike typical apartment defect lawsuits where claims rarely exceed 60%, the court virtually recognized most of the 5,988,000,000 KRW claimed by the residents.
Previously, HDC constructed and sold 13 buildings (1,296 households) of the A I-Park apartment in Dalseo-gu, Daegu in 2012, but it was revealed that poor construction was done differently from the design drawings during the construction process. Residents who suffered damages such as cracks, leaks, and lifting of bathroom and balcony tiles filed a lawsuit, stating, "Several defects still remain," and also held HUG, which issued the defect repair guarantee certificate, responsible.
The court stated, "The appraisal results show that a total of about 8,774,000,000 KRW is required to repair the remaining defects in this apartment," adding, "These defects are due to HDC's construction defects." However, considering that about 5 years and 11 months passed from the apartment's usage inspection date on January 28, 2015, to the start of the appraisal site investigation, and the possibility that defects expanded due to natural aging and residents' mismanagement, the compensation was limited to 70% of the total repair cost.
During the trial, it was confirmed that HDC constructed the floor finishing materials in the underground parking lot somewhat thinner than specified and finished the stairwell walls only with water-based paint. It was also pointed out that stairs were not installed at rooftop entrances, which are 40 cm higher than the floor. HDC argued, "There were no drawings instructing installation, the doors are usually locked so residents cannot enter, and evacuation in case of fire cannot be assumed to be only through the rooftop," but the court did not accept this argument.
Meanwhile, HDC is reportedly involved in defective construction lawsuits for more than 10 apartment complexes nationwide. In November last year, it lost the first trial in a lawsuit with the residents of B I-Park in Gimpo, Gyeonggi Province, was ordered to pay about 2.7 billion KRW, and has appealed. After facing an '8-month business suspension' crisis due to Seoul city’s disposition, HDC obtained a suspension of the effect from the Seoul Administrative Court and is currently preparing for the main lawsuit.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
