The Constitutional Court ruled Article 118 provision 1 of the Program and Utilization for National Land (previously Article 21-3 provision 1 of the Utilization and Management for National Land) to be constitutional, which requires one who shall buy or sell the land in the permission district must obtain the permission of the government and further held that the land transaction contract without such permission is absolutely ineffective.
The Supreme Court, which at first held that the land transaction contract without such permission is absolutely ineffective following the Constitutional Court, changed its stance recently as to such contract is currently void.
As the evaluation of judicial precedent can be made after analyzing the legal character of the permission of the Act, the theories of the legal character are as follows: first, theoretical confirmation theory: second, theoretical permission theory : third, combination of the theoretical confirmation and permission theory: forth, theoretical licence theory.
The judicial precedent and the majority of the academia insist on the theoretical confirmation theory regarding the permission of the Act. Thus denying the effect of the contract and insists the effect of the land transaction contract without such permission to be currently void. But the theoretical permission theory is more appropriate and following the provisional validity theory which approves the effect of the obligatory right of the contract is reasonable.
Regarding Article 118 clause 6 which states that a land transaction contract without the permission doesn't come into force, there are number of opinions in the interpretation, such as absolute invalidity theory, relative invalidity theory, validity of obligatory right theory, currently void theory and so forth are posed.
The judicial precedent that insisted the currently void theory recognizes that the effect of the land transaction contract without such permission is retroactively valid starting on the date of the signing of contract, and that the currently void changes definite validity, if one gets the permission after the land transaction contract.
But if the currently void theory is adopted, the validity of the obligatory right of the land transaction contract is denied absolutely, causing difficultly in legal settlement due to cancellation fee rescission, revocation provided by law, provisional registration and preservative measure of the ownership transference registration claim, damage reparation demand of default on an obligation, and breach of trust in criminal liability would be denied.
Thus, as the permission of that Act is an administrative measure of an executive agency separate from the mutual agreement for the real estate transference and registration, the effect of the permission should be analyzed separatedly.
As the permission of the Act is the revocation condition by law, the effect of the permission is provisionally valid until the permission of the land transaction contract is decided as a definite disapproval.
Only if the effect is recognized to be provisionally valid, recognition of the cooperate motion for the permission of the land transaction contact motion, cancellation fee rescission, revocation provided by law, provisional registration and preservative measure of the ownership transference registration claim, damage reparation demand of default on an obligation, and the breach of trust in criminal liability can be used as a legal solution.
Adopting the effect of the land transaction contact without permission to be provisionally valid raises some negative issues, as the achievement of the Act's goal such as the realty speculation restraint and the effective program and utilization of the national land could become difficult to achieve. But if the Act is revised to apply the permission in fixed term, criminal punishment enforced, and render absolutely void when the application isn't filed in the fixed term by law, then the goals of the Act can be achieved sufficiently.
Thus, the legal character of the permission of the Act should be theoretic permission theory, therefore rendering the land transaction contact without the permission of the administrative agency effective. Consequently, the duty of the cooperation permission application, the security of the performance of the contract, the criminal punishment breach of trust in case of duplication of selling and buying can be secured. Furthermore, revising the Act to allow the application for permission in certain terms fixed by law, and if not filed the effect of the contract rendered void definitely, and with the criminal punishment strengthened, the goals of the Act which encourages the realty speculation restraint and the effective programing and utilization of the national land can be achieved effectively.