If Only the Beneficial Interest in a Building on Land Is Split Up and Sold on a Distributed Ledger, Does Statutory Superficies under Customary Law Still Remain Effective Today?

The Anchor in Actual Precedent and the Question Posed by the Future Synthetic Case

Supreme Court en banc Decision 2017Da236749 rendered on July 21, 2022 (Delivery of Land) squarely addresses the following question: in a land-delivery case in which the land and an unregistered building had come under separate ownership, does statutory superficies under customary law remain in effect?

The Supreme Court's core conclusions may be summarised as follows. Article 185 of the Civil Act recognises the creation of real rights by customary law, so the effectiveness of the custom cannot be denied merely because it restricts ownership. Because land and buildings are separate pieces of real estate, there is a public-interest need to prevent the losses caused by demolition, and the custom operates as a supplementary device to which the parties' agreement takes precedence. The duration follows Article 280 (1) subparagraphs 1 and 2 and Article 281 (1) of the Civil Act, and land rent may be claimed, so safeguards protecting the landowner are also in place. No material was presented showing that the legal conviction had disappeared or that the practice had essentially changed, and the Court therefore held that the custom remains effective. The order reads: "The judgment below is reversed, and the case is remanded to Jeonju District Court." The judgment's mode of reasoning is a statement of requirements (following existing precedent).

Anchored in the legal principle of the actual judgment above, this research pair applies it to a hypothetical case. In 2031, a collateral mortgage was created over commercial land. Ownership of a newly constructed building was then kept with a trustee company, and only shares of the beneficial interest were transferred to third parties as digital beneficiary certificates. In that state, an auction of the land proceeded. The pair compares, step by step, which requirements operate unchanged in this case and at which requirements new gaps in proof arise.

Sources for this section: Supreme Court en banc Decision 2017Da236749 rendered on July 21, 2022 — official text of the decision, Korea Law Information Center

The Structure of the Issues as Set by the Issues and the Reference Provisions

The framework of the Issues as summarised in the judgment is as follows: whether the customary law under which, when land and the building on it that belonged to the same person come under different ownership through sale or otherwise, the owner of the building acquires statutory superficies unless there is a special agreement to demolish the building, still remains effective as a legal norm today (affirmative).

The reference provisions to be read together in this case are Article 185, Article 280 (1) subparagraphs 1 and 2, Article 281 (1), Article 305 and Article 366 of the Civil Act, Article 6 of the Act on Standing Timber, and Article 10 of the Provisional Registration Security Act. The first step is to separate, among the constituent elements or the requirements for the creation of a right laid down in the wording of these provisions, the part that falls within statutory interpretation from the part that falls within the finding of individual facts.

In relation to prior precedent, this judgment stands in the position of following existing precedent. It may be read alongside the reference cases: Supreme Court Decision 66Da1844 rendered on December 20, 1966 (Collection 14-3, Civil 332); Supreme Court Decision 67Da2007 rendered on January 31, 1968 (Collection 16-1, Civil 37); Supreme Court Decision 85DaKa2275 rendered on September 9, 1986 (Gong1986, 1301); Supreme Court Decision 92Da3984 rendered on October 27, 1992 (Gong1992, 3255); Supreme Court Decision 93Da26687 rendered on December 28, 1993 (Gong1994Sang, 521); Supreme Court Decision 2002Da61934 rendered on December 26, 2003 (Gong2004Sang, 209); Supreme Court Decision 2006Da54804 rendered on September 6, 2007; Supreme Court Decision 2005Da41771, 41788 rendered on February 15, 2008; and Supreme Court Decision 2013Da43345 rendered on September 12, 2013. Read together, they show how the Court maintained the outer bounds of the existing legal principle while rearranging the factual elements of the specific case.

Sources for this section: Supreme Court en banc Decision 2017Da236749 rendered on July 21, 2022 — official text of the decision, Korea Law Information Center

Analysis of the Supreme Court's Summary of Judgment and Its Key Holding

The core of the Summary of Judgment set out by the Supreme Court is as follows. [Majority Opinion] When land and the building on it that belonged to the same person come under different ownership through sale or otherwise, the owner of the building acquires statutory superficies unless there is a special agreement to demolish the building. This customary law should be regarded as still remaining effective as a legal norm today. The specific reasons are as follows. (1) Article 185 of the Civil Act provides that "Real rights cannot be created at will, except as provided by statute or customary law," and thereby recognises the creation of real rights by customary law. Once customary law recognises a limited real right in the form of statutory superficies, the landowner cannot avoid being restricted in the exercise of ownership to the extent generally recognised as necessary for the use of the building. Accordingly, the fact that recognising statutory superficies under customary law restricts the landowner's exercise of ownership to a certain extent cannot be a ground for denying that statutory superficies under customary law is established. (2) The Korean legal system treats land and the building on it as separate and independent pieces of real estate. Therefore, when land and the building on it that belonged to the same person come under different ownership through sale or otherwise, and the landowner and the building owner have made no particular agreement on the use of the site, measures are needed to preserve the value of the building to a certain extent. Statutory superficies under customary law is recognised precisely in such circumstances, out of the public-interest need to prevent the socio-economic losses caused by demolition of the building. The statutory superficies under Article 305 of the Civil Act, the statutory superficies under Article 366 of the Civil Act, the statutory superficies under Article 6 of the Act on Standing Timber, and the statutory superficies under Article 10 of the Provisional Registration Security Act are all systems established to preserve the value of buildings or standing timber when land and the building or standing timber on it that belonged to the same person come under different ownership for certain reasons. Where land and the building on it that belonged to the same person come under different ownership through sale or otherwise, case law gives priority to any agreement between the building owner and the landowner on the use of the site. Statutory superficies under customary law may therefore be regarded as recognised supplementarily only where the parties have made no agreement at all. In light of these points, it is difficult to conclude that recognising statutory superficies under customary law is inconsistent with the entire legal order, at whose apex stands the Constitution, or that its legitimacy and reasonableness cannot be acknowledged. (3) Unless there are special circumstances, the provisions of the Civil Act on superficies apply mutatis mutandis to statutory superficies under customary law. Where the parties have not separately fixed its duration, the duration is therefore the period prescribed in the subparagraphs of Article 280 (1) of the Civil Act, by virtue of Article 281 (1) of the Civil Act. Accordingly, statutory superficies for the purpose of owning a solid building lasts 30 years (Article 280 (1) subparagraph 1 of the Civil Act), and statutory superficies for the purpose of owning any other building lasts 15 years (Article 280 (1) subparagraph 2 of the Civil Act). Statutory superficies under customary law thus subsists only for a fixed period. The landowner may claim land rent from the building owner holding statutory superficies under customary law, and may sue for payment of land rent even before a judgment determining the rent. In this way, safeguards that protect and take account of the landowner are provided alongside the recognition of statutory superficies under customary law. (4) In the long period since the Supreme Court first recognised statutory superficies under customary law as a form of customary law, considerable changes may be said to have occurred in Korean society in the value of land, the concept of ownership, landowners' awareness of their rights, and so on. Even so, the public-interest need to prevent the socio-economic losses caused by demolition of buildings, and the need to protect the interests of building owners or users, are still emphasised no less. Nor can any material be found from which it could be recognised that members of society have lost their conviction in the legally binding force of the custom concerning statutory superficies under customary law, or that the practice has essentially changed. [Dissenting Opinion by Justice Kim Jae-hyung] The custom that a real right in the form of statutory superficies arises when land and the building on it that belonged to the same person come under different ownership through sale or otherwise cannot be regarded as satisfying the requirements for the formation of customary law. Even if such customary law had been formed, members of society today no longer hold a conviction in the legally binding force of that practice, and it is inconsistent with the entire legal order, at whose apex stands the Constitution. Its effectiveness as a legal norm should therefore not be recognised. Accordingly, the prior precedents that broadly recognise statutory superficies under customary law should be overruled.

In particular, the passage in the judgment that directly supports the conclusion is the following: "[Majority Opinion] When land and the building on it that belonged to the same person come under different ownership through sale or otherwise, the owner of the building acquires statutory superficies unless there is a special agreement to demolish the building. This customary law should be regarded as still remaining effective as a legal norm today."

This passage is not a mere abstract declaration. It serves as the reference point for identifying which legal premise the court below omitted, or which factual elements it overestimated or underestimated.

Sources for this section: Supreme Court en banc Decision 2017Da236749 rendered on July 21, 2022 — official text of the decision, Korea Law Information Center

Comparison Table: Decisive Factors in the Actual Judgment and the Synthetic Case

The table below sets out the decisive factors extracted from Decision 2017Da236749 and compares them side by side with the record structure of the synthetic case.

Sources for this section: Supreme Court en banc Decision 2017Da236749 rendered on July 21, 2022 — official text of the decision, Korea Law Information Center

Two Competing Legal Readings of the Synthetic Case

In the synthetic case (a hypothetical case in which, after a collateral mortgage was created over commercial land in 2031, ownership of a newly constructed building was kept with a trustee company, only shares of the beneficial interest were transferred to third parties as digital beneficiary certificates, and an auction of the land then proceeded), the first reading emphasises the outward result and the economic and functional effects, and would extend the legal principle of the existing precedent (2017Da236749) unchanged. On this view, even though the technical means or contractual form has changed, the risk the norm seeks to prevent and the legal interest it seeks to protect remain the same.

The second reading counters by invoking the strict limits of the principle of legality in criminal law (nulla poena sine lege), private autonomy, and the principle that real rights are prescribed by law (numerus clausus). It argues that the requirements of awareness, agreement and control by the acting party, which Decision 2017Da236749 presupposes, cannot be applied by analogy to an algorithm or a distributed-ledger structure. On this reasoning, it is difficult to attribute responsibility within the wording of the current provisions without legislative supplementation.

Sources for this section: Supreme Court en banc Decision 2017Da236749 rendered on July 21, 2022 — official text of the decision, Korea Law Information Center

Remaining Questions and Conditions for Re-examination

The follow-up question that remains after reading this judgment is as follows: between the public interest in preventing demolition and the restriction of land ownership, for how long will customary law remain a supplementary solution?

It is also clear when this analytical framework should be re-examined as further materials or precedents accumulate. It may be revisited if material is presented showing that the legal conviction underlying the custom has disappeared or that the practice has essentially changed.

This is a research analysis prepared by comparing, as of October 21, 2026, the original text and reference provisions of Supreme Court en banc Decision 2017Da236749 rendered on July 21, 2022, as published by the Korea Law Information Center. It does not substitute for the conduct of litigation by any particular party or for legal advice.

Sources for this section: Supreme Court en banc Decision 2017Da236749 rendered on July 21, 2022 — official text of the decision, Korea Law Information Center