There are various forms of jointly owning real estate. In the case of jointly owning shares, the ownership is shown on the real estate registration certificate (real estate registration copy) in the form of "X out of Y" shares. If a couple jointly owns a property, for example, it may be registered with "1 out of 2 ownership" and if the land was inherited from a family member, various relatives may be registered with "1 out of 20 ownership" and so on. If one of the owners has a debt problem, their share can be seized. For example, if a debtor owns "1 out of 20 shares" of a property they inherited, that share can be seized and if a creditor applies for an auction and wins, it is possible for an unrelated person to become a joint owner of the land with "1 out of 20 shares."
In addition to share ownership, there is also a form of joint ownership where the share is not shown on the real estate registration certificate. This is the "unified registration" system. Although several people jointly own the property, the percentage of each member is not shown. Unified registration is a way in which people in business partnerships or cooperatives jointly own real estate. For example, A and B invest 300 million won each to purchase a 600 million won property and jointly own it. However, if A's creditor C cannot receive the money owed, can A and B seize the jointly registered property?
In the Supreme Court precedent [Supreme Court 대법원 2007. 11. 30.자 2005마1130 결정 (Order for payment)], it was stated that "Regarding the joint ownership of real estate that constitutes the association property, it cannot be subject to seizure or other compulsory execution for the joint ownership interest of each individual property that constitutes the association property." Therefore, C cannot directly seize the jointly registered real estate owned by A and B. Unlike in the case of owning a stake, it is also impossible to proceed with forced auction after seizure.
However, the above precedent states that "the creditor's lien may exercise the debtor's expression of intent to withdraw from the association." This means that creditor C can exercise A's withdrawal from the association instead. If the withdrawal from the association is made, the stake that A holds can be refunded. C can then seize A's stake refund right.
In a tax investigation case by the National Tax Service, the following was introduced regarding jointly registered real estate:
X, who was engaged in real estate leasing, first donated his own home to his children. This was done in preparation for a possible scenario. Then, X deliberately evaded income tax on the transfer of the real estate he owned and transferred the leased real estate. After that, X acquired a new factory building in the form of joint ownership with his children using the proceeds from the transfer of the leased property. The joint registration was intended to evade direct seizure of the stake.
The National Tax Service traced the transfer fee for the leased real estate and confirmed the financial transaction history and hidden assets. Since direct seizure of the jointly registered factory building was not possible, they filed a lawsuit to seize and recover the creditor's stake refund claim (credit). They plan to file a lawsuit to cancel the act of donation for the house given to the children.
It is not too much to say that there is no way to evade seizure of real estate. Real estate is property that is registered and managed, so all information that anyone can use is included.
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