Newsletter
CHANGE OF REGISTERED PRO-PRIETOR IN INFRASTRUCTURE PROJECTS
According to the Building Code and related rulings issued by the Ministry of the Interior, an application to change the registered proprietor of a building or other structure must be made jointly by the original proprietor and the new proprietor. However, if a financing institution funding an infrastructure project exercises its step-in right under Article 52 Paragraph 3 of the Act for Promotion of Private Participation in Infra-structure Projects (APPPIP), it may itself tem-porarily take over a project company's role in a project, or may select another entity that com-plies with the relevant legal requirements to take over the project. There has been doubt as to whether an entity taking over a project in this way may directly register itself as the proprietor if the original project company is unwilling to cooperate in registering the change of proprietor.
The Construction and Planning Agency of the Ministry of the Interior addressed this issue in an interpretation dated 26 September 2006. The CPA stated that the legislative purpose of Article 52 of the APPPIP, in providing a mechanism for lenders' step-in right, is to uphold the public in-terest by creating an opportunity to revive failing projects before the arranging authority termi-nates a concession contract. To ensure the con-tinued construction or operation of an infra-structure project, the lenders' exercise of the step-in right should have the legal effect of causing the successor entity's taking over of the rights and obligations under the concession con-tract. Therefore, under Article 52 Paragraph 3 of the APPPIP, after the arranging authority con-firms the completion of the due procedures for the take-over of the project by either the lenders or another entity designated by the lenders, , then the entity taking over the project may apply di-rectly to be registered as the proprietor of the structure concerned, without needing to make the application jointly with the original proprietor.