Background
Our client, a telecommunications company, owns a building in a city in Gangwon Province. The neighboring land was bought in 2018 for about KRW 2.65 billion by a residential developer, which on the day it took title in June 2022 placed the land in trust with a trust company to build serviced residences. A boundary survey then showed that our client's building encroached on part of the land. The developer sued for KRW 600,000,000: KRW 50,000,000 in unjust enrichment, KRW 200,000,000 for halted construction, and KRW 350,000,000 for redesign and the purchase of adjacent land.
What Was at Stake
The real questions were whether the developer had any right to the land at all, and whether the losses it claimed were actually caused by our client's building.
How Changchun Helped
Law Firm Changchun contested the claim, and the court ruled in our client's favor on each point. Once land is placed in trust, ownership passes fully to the trustee, so the developer could not sue as owner. A claim for the rental value of the land belongs to the trustee, and the developer offered no concrete proof of its construction losses, which in any event were special damages our client could not have foreseen. Finally, the developer's own correspondence showed that it bought the adjacent land because of a different neighbor's encroachment.
Outcome
In August 2024, the first-instance court dismissed the claim in full and ordered the developer to bear the litigation costs.
An encroachment does not automatically translate into large damages. Examining who holds the rights and what actually caused the loss can defeat an inflated claim. (Outcomes depend on the facts of each case.)