The Effect of Inherited Property Division and the Protection of Third Persons
Authors:   The Korean Society Of Family Law, Oh Chong-Kun 
Published: August 2023

There are divided views regarding when a co-inheritor acquires real rights over an immovable, as inherited property, according to division agreement or division judgment. The one view suggests that upon the division agreement or division judgment, he acquires them without registration. This view applies Article 187 of the Civil Act to the acquisition of real rights based on inheritance property division. The another view applies Article 186 of the Civil Act, and therefore holds that registration is necessary for the acquisition of real rights. Both arguments are theoretically plausible. However, our Civil Act adopts the principle that the acquisition of real rights over an immovable require registration(Article 186), while not recognizing bona fide acquisition over an immovable. Therefore, for the sake of secure transactions, real rights acquisition without registration (Article 187) should be limited as much as possible. From this perspective, the second view is more reasonable. When the effect of inheritance property division is retroactive to the commencement of the inheritance (see Article 1015 of the Civil Act), it may prejudice third persons who acquired rights over the inheritance property before the division. Therefore, Article 1015 includes a proviso limiting retroactive effect by stating that “the rights of third persons shall not be prejudiced thereby.” The prevailing doctrine and case law have not clearly explained the meaning of the proviso in Article 1015 and define the scope of protected third parties as “those who acquired rights over the inheritance property before the division and met the requirements for effectiveness”. However, the meaning of the proviso in Article 1015 should be interpreted as follows: while the effect of inheritance property division retroactively applies among the coinheritors, it does not apply retroactively in relation to third persons. By interpreting the proviso in Article 1015 in this way, the scope of protected “rights of third persons” and unprotected “rights of third persons” can be automatically derived, and that criteria to distinguish between the two, as suggested by prevailing doctrine and case law, are no more necessary. Recent case law states that if there is an adjudicated division of inherited immovable, the real rights in the inheritance property are transferred to a co-inheritor even without registration, pursuant to Article 187 of the Civil Act, while the rights acquired by a third person acting in good faith before the registration over the inherited immovable are protected. This view is also supported by prevailing doctrine. However, the reasoning presented in case law and prevailing doctrine lacks persuasive force. Particularly, conclusions such as recognizing the public confidence of registration would be unacceptable under our Civil Act, because our Civil Act does not recognize bona fide acquisition over an immovable. Instead, it is more reasonable to assert that even in the case of an adjudicated division of inherited immovable, registration is required for the transfer of real rights in accordance with Article 186, and the protection of third persons is sufficient thereby.