Court: "Real estate cannot be expropriated without establishing and announcing a funding plan"

"'Violation of Proportionality Principle' and 'Procedural Defects' Exist"
… Court Rules in Favor of Real Estate Owner

Seoul Administrative Court, Seocho-gu, Seoul. / Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Kim Daehyun] A court has ruled that the disposition by Jongno District Office in Seoul to incorporate an unregistered building used as a cafe and gallery into a park is illegal.

According to the legal community on the 25th, the Seoul Administrative Court Administrative Division 1 (Presiding Judge Kang Donghyuk) recently ruled in favor of the plaintiff in the first trial of a lawsuit filed by property owner Mr. A against Jongno District Office, seeking cancellation of the approval disposition for the urban planning facility project implementation plan.

Previously, Mr. A owned an unregistered property located within a park zone in Samcheong-dong, Jongno-gu, Seoul, and leased the building as a cafe and exhibition space.

Ahead of the implementation of the Urban Park Sunset System in 2020, Jongno District Office announced its intention to expropriate Mr. A’s property and create a park, following Seoul City’s directive to "prepare and approve an implementation plan for long-term unexecuted urban park land designated as urban planning facilities (parks)." The Urban Park Sunset System is a policy that nullifies the designation of land as park facilities if development projects are not carried out within 20 years of designation.

During the trial, Mr. A argued that "the restriction on private property rights is excessive compared to the public interest gained from park creation, violating the principle of proportionality." He also claimed that "there were procedural defects such as not clearly disclosing or attaching detailed plan layouts, financial plans, reports, and drawings of newly installed public facilities during the approval announcement."

The first trial ruled in favor of Mr. A. The court judged that the contribution to the public interest from the approval disposition was minimal and that there was a significant imbalance between public and private interests. The court stated, "Mr. A’s property accounts for only 0.07% of the total park area," and added, "expropriating it to create an additional very small park is inefficient, and even if created, its utilization would be extremely limited."

The court also accepted the claim of 'procedural defects.' It added, "There is no evidence to confirm that during the approval announcement process, the financial plan necessary for project implementation or copies of related documents such as construction design drawings were made available for public inspection for 14 days."

Jongno District Office has appealed the first trial ruling.