Defect Repairing Cost and Its Bond on Apartment Building in Relation to Lawsuit Parties

An appropriateness of defect repairing cost for apartment is being challenged in Korea. The problem is that there is no detailed prescriptions or specifications about the defect repairing cost other than calculating standard of the defect repairing bond in the applicable laws. There is also not even a proper base in establishing the standard itself. In order to specify the standard of defect repairing bond and to make it serve as a realistic system, it is necessary to discuss how much is the actual scale of the defect repairing cost and how it is reasonable to establish the calculation system of defect repairing bondin the apartment buildings. The researchers have proposed a ratio of about 1.5% to the current standard of 3% of the construction cost as per the analysis of actual data in the previous study. However, it is necessary to supplement this scale considering the facts that the scale of lawsuit for defect is huge and the recent trend of litigation for the defect repairing has changed. Therefore, this study approaches the relationship between defect repairing cost and bond at a new point of view by analyzing the existing cases again. The builder for apartment construction makes agreement with the developer, therefore the builder has responsibility of defect repairing. It also becomes an auxiliary party in the lawsuit for defect in the resulting construction. In this study, we have categorized all the parties involved in the construction and defect repairing cost. Type A is the case where the litigant has a construction capacity rank of 1-10, Type B of rank 11-30, type C refers to the construction capacity rank other than type A and Type B, and for the case where the lawsuit party is not a builder but a guarantee company, it is categorized as type D.And then, the differences in the defect repairing cost rates in each category were reviewed. This review was conducted because the builders at upper group are generally excellent in terms of technology and quality, but it is not known in detail that how much they are good in counteracting the defect. The result of the case analysis by type showed that the rate of the defect repairing cost by the builder of upper rank was relatively low. In addition, the minimum repairing cost ratio was relatively small between the types, but the maximum repair cost showed great differences between the types. On the other hand, only two cases showed excess of 3% of the defect repairing bond rate among the total of 49 cases. This big difference might have caused large defect cost bond rate in the type A and Type B. The results of this study suggest the following points. First, 47 cases out of 49 cases showed the defect repair bond rates below 3%, which speaks that the current standard is not being practiced. Second, considering the fact that average defect repair bond rate is lowest and the maximum and minimum deviation of defect repair cost rate is also the lowest in the type B, the type B offers the lowest defect repair cost bond among other types of lawsuit cases.