I was deceived by a false sales advertisement for “construction by a famous construction company”… Court: “Full deposit must be paid”

When I requested ‘contract termination’, both the housing association and the developer avoided responsibility.
“Contract entered into by mistake due to false advertising… down payment must be returned”

Subscribers who complained that they had signed up for private rental apartments after seeing false and exaggerated advertisements claiming that they had signed a construction contract with a famous construction company brand won the trial.

According to the legal community on the 22nd, the Suwon District Court ruled in favor of the plaintiff on the 26th of last month in a lawsuit filed by two members of a local housing association against the association and the developer seeking refund of the down payment.

The court ruled, "Because the union and the developer worked together to recruit contractors through false advertising, it can be seen as a case of deception or mistake. Therefore, the contract can be canceled or invalidated. Even if the contracting party is the union, it can be confirmed that the developer also acts as a party in the contract text."

The sales deposit is paid in full or in part as a penalty upon termination of the contract, and in principle cannot be refunded. However, the court ruled that the contract must be returned because the contract was entered into by mistake due to false and exaggerated advertising.

Previously, in October last year, two subscribers signed a preliminary tenant contract with Association A on the condition of paying a rental deposit of about 200 million won and a down payment of 55 million won.

At the time, the union encouraged subscribers to join by explaining that a famous construction company brand was in charge of construction. For the down payment, an advance deposit method was proposed instead of the existing two-month deposit method. If you deposit in advance, a portion of the down payment is returned.

However, the construction company advertised by the union later posted a warning notice on its website stating, “We have not entered into any agreements or agreements regarding construction in relation to the new rental housing project.”

Subscribers who heard about this filed for contract termination, but the union postponed contract termination without disclosing the exact reason. The developer also avoided responsibility by claiming that it was “not an actual party to the contract” even though it was designated as the entity receiving the deposit.

In this regard, attorney Kim Tae-hwan of Daeryun Law Firm, who represented the plaintiff, pointed out, “The defendants delayed the return of the deposit on the grounds that they were not parties to the contract, making it difficult to clearly hold them legally accountable and dispersing the parties to the contract.”

He continued, "The defendants recruited subscribers with favorable sales conditions, but in reality, a construction company had not been selected and land for the site had not been secured. The defendants were responsible for restoring the original condition due to withdrawal of subscription, so they had to return the entire down payment and litigation costs, etc."

Reporter Kim Mi-ji (unknown@kyeonggi.com)

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I was deceived by a false sales advertisement for "construction by a famous construction company"... Court: “Full down payment must be made” (Shortcut)