Real property

Real property, real estate, realty, or immovable property (부동산/不動産) is any subset of land that has been legally defined and the improvements to it have been made by human efforts: buildings, machinery, wells, dams, ponds, mines, canals, roads, etc.

Real property and personal property are the two main subunits of property in English Common Law.

Under the Civil Act, things (물건/物件) mean corporeal things, electricity and other manageable natural forces. Article 98. Land and things firmly affixed thereto shall be immovables (real property). Article 99 (1). All things other than immovables shall be movables (personal property). Article 99 (2).

Key words
things, real property, immovable, registration, personal property, co-ownership

2 Kinds of real property
In Korea, real property consists of land and buildings, which are considered separate real property. The relevant units used to measure ownership of land and buildings are pil-gee (필지/筆地) and dong (동/棟) (which is equivalent to one building structure), respectively. In principle, potential buyers are not allowed to acquire interests that are smaller than one pil-gee or one dong unless a building is deemed an aggregate building and the dong has been divided into several sections that are subject to independent use or ownership.

Ownership of real estate
The Korean legal system is based on the civil (codified) law similar to that of Germany, France and Japan, with some influence from the American legal system in certain areas, such as the Korean bankruptcy and rehabilitation laws.

Ownership under Korean law is based on complete ownership (similar to fee simple absolute under common law), which entitles the owner to do whatever he or she wishes to do with the property, including right to exclusive possession, use, encumber and transfer. Korean law does not recognise any other possessory real property interests such as a defeasible fee simple estate, fee tail, life estate or future interest in land. Real estate can also be owned by one or more parties in Korea. Generally, co-ownerships are held under the form of a gong-yu (공유/共有), hap-yu (합유/合有), or chong-yu (총유/總有), and in the case of any purchase of property held under a co-ownership, the purchaser should ensure that the seller has, or has otherwise secured, authority to dispose of the property or his or her interest therein.

Registration system
Korea has a dual registration system for real property, consisting of a land registry and building registry. Ownership interests must be registered under the applicable registries because land and buildings thereon are considered separate real property.

If a person wishes to acquire an ownership interest or establish a security interest, such person must register relevant documents with the appropriate registry office to perfect the transfer of title (except where it arises by operation of law) or to establish a security interest. The priority order of the security rights established on the real property will depend on the order of the registration date.

The registration system is governed by the courts and is managed by the registration division of the court administration department at the Supreme Court. The registry may be viewed on, and printed from, the website of the Supreme Court. An entry is made in the register after administrative procedures are completed. To avoid fraud or abuse, the entry procedure is guarded by certain protective measures, for example only holders of the relevant property identification number and password are allowed to enter any change in information. However, there is no strict formality, such as executing a sales or transfer deed before a notary public, to transfer title or make any other type of entry into the register unlike other jurisdictions that have adopted a stricter system. Therefore, while registration in the real property registry creates a strong presumptive evidence of valid ownership, it is not conclusive.

Choice of law
The main bodies of law governing real estate transactions are the Civil Act, the Commercial Act, the Act on the Ownership and Management of Aggregate Buildings and the Real Estate Registration Act. Depending on the nature and circumstances of the transaction, laws that govern permits, zoning and approvals, such as the Building Act and the National Land Planning Act, or laws that govern qualifications of the buyer, such as the Foreigner’s Land Acquisition Act, the Foreign Investment Promotion Act and the Foreign Exchange Act, may also apply.

In special cases, the real estate transaction may be subject to the Industrial Complex Act, the Act on Free Economic Zones, the Protection of Military Bases and Installations Act and the Farmland Act.

Under Korean laws, registration in the real property registry is strong presumptive evidence of ownership. However, there are some inherent limitations to verifying ownership under the Korean recording system and should there be any material defect in the chain of title for a certain parcel of real property, the right of the current title holder may be challenged. In order to avoid purchasing a property with a defect in the chain of title, the entire chain of title needs to be checked. Even if there is any defect in the chain of title of the property, anyone who (1) has been registered as an owner of the property for at least ten years and (2) has openly and uninterruptedly occupied such property for at least ten years in a way that a real owner would occupy its property will be deemed to have had valid title to the property under the Korean Civil Act.