[Real Estate A to Z]
8.4㎡ in Sangbok-myeon, Yangsan-si, Gyeongnam
Minimum price drops to 3,000 won after 12 failed auctions
Lowest amount recorded since 2001
Recently, a piece of farmland in Yangsan-si, Gyeongnam, was listed for court auction at a minimum price of 3,000 won. This is the lowest amount ever recorded since auction statistics began to be compiled. The required bid deposit is only 900 won.
According to Giji Auction, a public auction data provider, on June 13, a 2.5-pyeong (8.4㎡) farmland located in Naeseok-ri, Sangbok-myeon, Yangsan-si, Gyeongnam, was put up for auction in the 9th auction division of Ulsan District Court. The total area of the property is 40㎡, but only about 4/19 of the debtor's share is being auctioned. There are five co-owners in total.
The appraised value of the property was 168,400 won. However, there were no bidders. After 12 failed auctions, the minimum bid price dropped to 3,000 won. This is the lowest amount since court auction statistics began to be compiled in 2001.
An 8.4㎡ farmland in Naeseok-ri, Sangbok-myeon, Yangsan-si, Gyeongnam. It was listed in the 9th auction division of Ulsan District Court and after 12 failed bids, the minimum price dropped to 3,000 won. Screenshot from Giji Auction.
The bid deposit is 900 won. Typically, the deposit is set at 10% of the minimum auction price. In this case, the deposit should have been set at 300 won, but after a bidder won the land for 20,000 won in the 12th auction and failed to pay the purchase price, the deposit was increased. The 13th auction is scheduled for July 9, and if it fails again, the minimum price will drop to 2,000 won. The bid deposit will then be 600 won.
Before this property came up for auction, the lowest minimum price had been recorded by a 1.8㎡ road parcel in Gahak-ri, Geumdang-myeon, Wando-gun, Jeonnam. This land was put up for auction at the Haenam Branch of Gwangju District Court in 2022, and after four failed auctions, the minimum price fell to 5,000 won in the fifth auction. It was later sold for 21,000 won. The initial appraised value of this road was 14,525 won. It was sold for 7,999 won at the third auction, but the winning bidder failed to pay, so it was put up for auction again. This property was also a "share auction," with only a quarter of the total area being sold.
However, even if someone wins the bid for this property, it is unlikely that the farmland can be used for personal purposes. Due to the nature of "share auctions," where only a portion of the ownership is acquired, the winning bidder cannot dispose of or freely use the entire property without agreement from the other co-owners. In addition, there is a possibility that there is a grave on the land, which means a right of grave site (bunmyo gijigwon) could be established. This right prohibits the owner from arbitrarily disposing of another person's grave located on their land.
Lee Juhyun, a senior researcher at Giji Auction, explained, "Due to the nature of share auctions, there are multiple owners, and the existence of a right of grave site makes it impossible to exercise exclusive property rights."
Although it is possible to resolve the ownership shares through a partition lawsuit, experts say that the likelihood of this is low due to the small size of the auction.
Kang Eunhyun, head of EH Auction Research Institute, said, "It is possible to auction the entire 40㎡ of land through a partition lawsuit and then distribute the proceeds according to ownership shares, but the minimum price is so low that it is realistically difficult." He added, "It is worth noting that you could buy 2.5 pyeong of land for 3,000 won, which is about the price of a cup of coffee."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
