Supreme Court rules SH Corp must refund illegal housing fees

The Supreme Court ruled that Seoul Housing & Communities Corp. must refund portions of housing sale prices collected from relocation beneficiaries that illegally included basic living facility installation costs.

In a civil judgment delivered April 2 in case 2025Da219649, the high court determined that clauses in special supply contracts requiring displaced residents to pay for roads, water and drainage systems violate the mandatory provisions of the Act on Acquisition of and Compensation for Land for Public Works. The law stipulates that project implementers, not residents, must bear the cost of installing these standard facilities as part of relocation measures.

The court held that any amount paid by beneficiaries covering these facility costs constitutes unjust enrichment and must be returned. Judges clarified that calculating sale prices for the special supply portion, limited to 265 square meters per household, based on appraised market values rather than land development costs is impermissible, even if the agency relied on internal guidelines using appraisal standards.

The proper method requires deducting facility installation costs from the land development cost to determine the legitimate price for the capped area. However, for any housing area supplied beyond the 265-square-meter limit, calculating the price based on appraised market value remains valid and should be included in the legitimate total.

This decision affirms a lower court judgment which ordered the public housing agency to repay the excess funds collected from a specific beneficiary who had been charged based on the higher appraisal standard.