Reporting Illegal Transfers of Apartment Sale Rights... Reward Payment at the Discretion of Local Governments

The Supreme Court has ruled that the payment of rewards for reporting illegal transfers of apartment sale rights under the Housing Act is at the discretion of local governments. On December 11, the Supreme Court's Special Division 1 (Presiding Justice Shin Sookhee) overturned the lower court's decision and remanded the case to the Suwon High Court in the appeal filed by Mr. A against the Governor of Gyeonggi Province regarding the rejection of his application for a reporting reward (2021Du57025).

[Facts]

In November 2015, Mr. A reported 1,141 cases of illegal transfers of apartment sale rights in the Seoul metropolitan area to Gyeonggi Province, Seoul City, and Incheon City. As a result of the investigation, criminal penalties were finalized for 52 of these cases. In June 2019, Mr. A applied to the Governor of Gyeonggi Province for a reporting reward of 85 million won for the 52 cases, based on the Housing Act. However, in July of the same year, Gyeonggi Province refused to pay, citing the following reasons: △ the payment of reporting rewards is at the discretion of the city or provincial governor, △ difficulties in securing the budget, and △ concerns about excessive rewards being paid to a single individual.

[Lower Court Ruling]

The first and second instance courts ruled in favor of Mr. A, stating that there was no significant public interest reason to refuse payment of the reporting reward.

[Supreme Court Ruling]

The Supreme Court reached a different conclusion. The Court stated, "The reward system under the Housing Act is a type of incentive designed to suppress violations and enhance the effectiveness of regulations through voluntary citizen monitoring. Accordingly, the decision to pay a reward constitutes a beneficial administrative act that provides economic benefit." The Supreme Court further explained, "Considering the structure, form, and wording of the relevant laws, as well as the purpose and nature of the reporting reward system, the payment of rewards under the Housing Act is a discretionary act, with the city or provincial governor being granted the authority to decide whether or not to pay."

An Jaemyoung, Legal Times Reporter

※This article is based on content supplied by Law Times.