Developing Trusts and Their Jurisprudences: Real Estate Trusts in Korea
Seoul National Univ. School of Law
Prof. Hyeok-Joon RHO

Among various types of trusts, this paper is focusing upon real estate trusts in Korea.
Compared to pecuniary trusts, the other major area of the commercial trust, real estate trusts
tended to invite more disputes and lawsuits in Korea: while the financial institutions engaged
in structured financing via trust vehicle tended to cautiously contact regulatory authorities
and legal professions, real estate developers using trust structure often proceeded with legal
uncertainty. Especially a large land development projects are vulnerable to legal claim fromvarious parties including landowners or investors. Those disputes, while unfortunate to theparties concerned, have been providing rich sources to refine Korean trust jurisprudence.
Further, the real estate trusts account for 34.2% of the total assets transferred to trustee andmore land development projects have become based upon trust structure. Following up thejurisprudence on real estate trust is essential to correctly understand the Korean trust law.
This paper is divided into three parts. Chapter II provides bird’s eye on the Korea’s realestate trust. By way of introducing trust types, performances of real estate trustee and major
regulations over real estate trust in Korea, readers will get to understand the usage and major
legal issues of real estate trust. Against this backdrop, the following chapters review major
jurisprudence on real estate trust, issues over outside the trust and inside the trust,
respectively. Issues over outside the trust are mostly associated with the protection of settlor’screditors. Under the separation of assets and the complete ownership by the trustee, settlor’s
creditors may not enforce their rights against trust properties. However, the inability ofsettlor’s creditors often seems unreasonable and the Korean statutes and case laws havedeveloped various theories tackling the status of settlor’s creditors. The topics in Chapter III
include ① the cancelation by settlor’s creditors of fraudulent trust, ② the priority among
settlor’s creditors who have unsecured, secured by mortgage or secured by Trust for Security
Purpose, respectively, and ③ the status of tax authority as the creditor of the settlor.
On the other hand, the issues over inside the trust in this paper are concerned with thereimbursement of expenses made by the trustee. The chapter IV has two sections: in the firstsection, the possibility and the range of reimbursement against trust property will be exploredespecially where a loan from trustee’s own account to trust account has been made; in thesecond section, a further reimbursement against a beneficiary will be dealt with.

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Professor Hyeok-Joon RHO

Prof. Hyeok-Joon RHO got his Ph.D. at Seoul National University, Seoul, Korea. Before
he joined Seoul National University School of Law in 2007, he had worked as a practitioner:
as a judge of the Seoul Southern District Court for two years and as a senior associate lawyerof the law firm “Woo & Yun” for two years. He also worked in the U.K. law firm Clifford
Chance LLP under the international lawyers exchange program between Korea and the U.K.
In addition to his doctoral study in Seoul, he made various academic visits to law schools
outside Korea: at Bucerius Law School in Germany as Humboldt research fellow, at Nagoya
University School of Law in Japan as visiting professor and at Harvard Law School in theU.S. as visiting scholar.
He has worked and published extensively on corporate law and trust law. The list of his
selected papers includes “New Squeeze-out Devices as a Part of Corporate Law Reform inKorea” (in English), “Invigorating Shareholder Derivatives Actions in South Korea” (coauthored in English), and “The Stock Corporation and the Business Trust: A Comparison inTerms of Asset Partitioning” (in Korean. Awarded as Best Paper of 2013 by the Korean
Securities Law Association)