Article 99 of Civil Act defines “land and things firmly affixed thereto” as real estate. Due to its natural and physical nature, there is no need to define separately what land is. Its independence is acknowledged when a boundary is drawn with an ...
Article 99 of Civil Act defines “land and things firmly affixed thereto” as real estate. Due to its natural and physical nature, there is no need to define separately what land is. Its independence is acknowledged when a boundary is drawn with an artificial marker and registration to cadastral record is made. As for an artificial building, unlike land, its independence is not acknowledged by registration. Rather it is evaluated as legal real estate when the building which was merely part of land separates from land and becomes independent building. Therefore, unauthorized or unregistered building is, despite some limitation, considered as building under Civil Act when it becomes ‘independent building’.
The independence of a legal building is important because of some issues: when a building is considered as “an independent real estate” under current Civil Act which considers land and building “independent real estate,” or whom the ownership of a building belongs to when its owner changes or if it is completed by a contractor's material and effort without a special contract. However, since current Civil Act is silent as to what degree the building should reach so as to be acknowledged as “independent building”, in the end, we cannot but help to judge based on the standard of social norm. That is we have no choice but to courts’ construction. However, since social norm is also subjective, sometimes courts make a conflicting judgment as to a building under construction.
Since land and building are closely related in terms of space, it needs to prescribe their legality uniformly. However, current Civil Act does not provide a plan designed to maximize legal and economic utility by blocking the possibility that ownership of land and ownership of its surface building are separated and belong to different subjects of right. Therefore, in case that ownership of land and ownership of its surface building belong to different persons, it is inevitable for the conflict between the two rights to occur.
First, to own a building presupposes use and returns of land. Civil Act is forced to provide for statutory surface rights in order to resolve issues incurring between owner of land and owner of building. However, statutory surface rights have limits in solving a variety of problems related to use and returns of land because such rights are recognized only where statutory requirements are met. Therefore, case law recognizes surface rights under common law. Surface rights under common law can be evaluated as systemic tools for rational coordination and regulation of usage relations between land and buildings. However they are just a system to force unilateral sacrifice. That is, grant of surface rights under common law results in sacrifice of land owners whereas negation of surface rights leads to sacrifice of building owners. Especially the demeanor of case law in favor of the expansion of statutory surface rights almost forces unilateral sacrifice of land owner.
Second, the law provides that due to tendency to become real rights of right to lease of real estate, “When the object of a lease of land is to own a building, if building on such land has been registered by the lessee, the lease of land shall be effective against a third person even if such a lease of land has not been registered” (Article 622 Civil Act). It is positive to grant opposing power to lessee of land under land lease, a mere bond-holder where its surface right was registered in terms of the protection of lessee, but that brings about conflicts in interests against new land owners.
Third, it is not limited to conflicts between land ownership and building ownership even when land and building are treated as separate real estate. Because of the existence of building, conflicts in interests may occur between building owners and mortgagee. For example, construction of building on mortgaged land is reasonable exercise of rights of a mortgager. However where such construction interferes with the realization of right to mortgage, infringement of mortgage right may be admitted. Treatment of building as a separate real estate from land may result in decrease in collateral value of land. Where building is essential part of land, infringement of right to mortgage may not occur because the right to mortgage of land is effective on building, leading to the increase in collateral value.
Therefore, in order to resolve issues caused by dual system of land and building including regulation of Civil Act imposed against building under construction, which does not reach the concept of ‘independent building’ under social convention, land and building should be composed uniformly. Introduction of new system to change paradigm of real estate law may cause confusion. For the purpose, phased actions are needed. Land and building shall be treated uniformly, and once system is established, they shall be composed uniformly centered on land.
The order of description of this paper is as follows.
The first chapter introduces and describes the purpose of the study and the scope as well as its method.
The second chapter discusses and compares the differences between oriental legislation (Japan and China) and western legislation (Roman law, German law, and the laws of the Anglo-American) in regard to the perceptions about the real estate concept of legal consideration.
The third chapter states problems derived from the dualistic ownership system of the land and building, especially with the emphasis on the conflicts of the ownership rights on land and the building. In addition it analyzes the judicial precedents about building.
The fourth chapter discusses institutional devices and their limitations in order to solve the problems specified in chapter three.
The fifth chapter shows the idea to improve the relations between land and buildings.
The sixth Chapter summarizes this paper and shows a future direction of our Civil Act to go forward.