A complaint alleging Chu T'ung Construction Co., Ltd. made false and misleading presentations with respect to the appearance of a building in an advertisement for pre-sold homes in violation of the law
Case:
A complaint alleging Chu T'ung Construction Co., Ltd. made false and misleading presentations with respect to the appearance of a building in an advertisement for pre-sold homes in violation of the law
KeyWords:
traditional European design, residential building, false advertising, pre-sold homes
Reference:
Fair Trade Commission Decision of November 4, 2000 (the 469th Commissioners' Meeting); Letter (89) K'ung T'san Tzu No. 8905601-006 and Disposition (89) K'ung Ch'u Tzu No. 181
Industry:
Home Building Engineering Industry (4601)
Relevant Laws:
Article 21 of the Fair Trade Law
Summary:
1. In January 1998, the complainants purchased homes in a building built by Chu T'ung Construction Co., Ltd. In its advertisement, the company emphasized that the building would have a traditional European design, a children's playground, and a park. It also stated that the front and sides of the external walls of the building's roof would have a European style design in the colors gray and black, and that the roof would be totally flat and covered. But the roof of the building built was in the color amber, it had no distinctive design, and was uncovered; its decorative stripes, windows, water tank, wall holes for air conditioning units, balconies, and front doors were in different colors; and other buildings had been built on the site originally designated for the children's playground and park. Hence the advertisement contained false advertising.
2. After investigation the Fair Trade Commission (the Commission) found as follows: The complaint alleged that the sides of the building's roof did not have a traditional European design in the color black; that its second, third, eighth, and ninth floors did not have raised cement decorative stripes in the color gray; that its odd numbered floors did not have a semi-circular edge; and that its driveway was not semi-circular. The Commission found as follows: The building's appearance did not have a traditional European design as advertised; six square glass panes - three above and three below - were located between each flight of stairs; the concrete platforms for air conditioning units had been replaced by the builder at no charge with higher priced cast iron racks; and the water tank on the roof had a semi-circular barrier wall, safety railing, raised cement decorative striped edge in the color gray, a sealed re-bar concrete design, and raised cement decorative stripes in the color gray on the upper portion. Although other buildings had been built on the building site adjacent to the building, a spot had been left for the purpose of building the children's playground and park.
3. Disposition and Grounds The complainants alleged that the appearance of the building was inconsistent with what was stated in the advertisement. The company stated before the Commission that the words "European design residential building" in the advertisement mainly emphasized the castle style parapet wall, but considering that such a wall would be easily soiled or damaged, it decided against building the parapet wall. The company cited a clause in the home purchase contract stating that "the company reserves the right to make revisions to the appearance of the building." But when deciding whether to make a purchase, the prospective buyers had only the seller's advertisement as a basis for making their decisions. Also, neither a building permit nor a use permit had been applied for and issued for the appearance of the building shown in the advertisement. The Commission found that the actual building built was clearly inconsistent with what was stated in the advertisement, that the company did engage in false advertising, and that the above clause did not relieve any of its responsibilities for such conduct. Hence the Commission found that the company's advertisement did falsely and misleadingly present the appearance of the building. The complainants alleged that there were six square glass panes - three above and three below - located between each flight of stairs. But the Commission found that the company did not engage in false advertising, and that the material and style used in the air conditioning unit holes and the water tank were inconsistent with the advertisement. Even if some of the material used were inconsistent with the advertisement, the company had used more expensive material for aesthetic and safety reasons and its doing so did not hamper the principal design of the building shown in the advertisement. Because of the compensatory measures adopted by the company and because it did not receive any additional economic interest, the Commission found that the company's conduct did not necessitate adjudging and disposition under the Fair Trade Law. The complainants alleged that other buildings had been built on the site originally designated for the children's playground and the park. The Commission found that, through an inspection of the site and of Taoyuan County's records, a spot had been left. Hence the Commission found that the advertisement was not inconsistent. The complainants alleged that their homes had only a single balcony. The Commission found that their homes originally had two balconies but that the complainants had agreed to changes to the building interiors and this results in the single balconies. Also, the unlawful building of balconies would fall under the regulatory scope of the Building Law. Hence the Commission found that the Fair Trade Law had not been violated.
Appendix:
Chu T'ung Construction Co., Ltd.'s Uniform
Invoice Number: 86272711 Summarized by Mei-hua Lai;
Supervised by Jack T. H. Wu