Deceptive acts engaged in by Chie Mao Construction Co., Ltd. that were sufficient to adversely affect the trading order
Chinese Taipei
Case:
Deceptive acts engaged in by Chie Mao Construction Co., Ltd. that were sufficient to adversely affect the trading order
Key Words:
public facilities, guidance and correction
Reference:
Fair Trade Commission Decision of September 23, 1998 (359th Commission Meeting); Disposition Ref. (87) Kung Ch'u Tzu No. 211
Industry:
Real Estate Development Industry (6811)
Relevant Laws:
Article 24 of the Fair Trade Law
Summary:
According to the complaint, in September 1997 the complainant subscribed an apartment unit in the "Ch'eng Lung Big Town" project that was being built by Chie Mao Construction Co., Ltd. (respondent). He signed a purchase contract that did not specify (his unit's) share or the number of pings (1 ping = 36ft2) with respect to common areas. Moreover, the respondent did not fulfill its duty of full disclosure to the complainant (that the share of common area was included in the ping count), resulting in a loss in the ping count. Thus, it was alleged that the respondent was suspected of having violated the Fair Trade Law (FTL).
FTL Article 24 provides that unless otherwise provided for in this Law, an enterprise shall not conduct any other deceptive or obviously unfair acts that are sufficient to affect trading order. The term "deceptive acts" refers to misleading acts by the enterprise such as deceit and concealment of important information in order to lead its trading counterparts either to do business with the enterprise or cause its competitors to lose the business opportunity. The Fair Trade Commission (FTC) considers the distribution of common areas to each unit an important trading condition in real property transactions. If the builder deliberately withheld such information in the contract, it would be suspected of having violated FTL Article 24, which prohibits deceptive acts. Therefore, the FTC during its 216th Commission Meeting decided that from 1 February 1996, Real Estate Developers shall stipulate in the purchase contract all common area included and the share computation method, or such developer may be found in violation of FTL Article 24. The FTC's 235th Commission Meeting supplemented that "if upon signing of the purchase contract, the subject real property's title has been recorded, and the title deed clearly shows the share of common area of each unit, the above may not apply."
In this case, the FTC found that the subject contract was signed on 16 September 1997, at which time the title to the subject real property had yet to be recorded. There was no title deed for reference as to the distribution of the common area to each unit. Therefore, regarding the share of common area, the FTC's principles of guidance and correction shall apply. In addition, the subject contract did not contain provisions regarding the common area covered or the share computation method. The respondent intentionally concealed this information. Such act constituted a deceptive act sufficient to adversely affect the trading order in violation of FTL Article 24. The respondent was disciplined in accordance with FTL Article 41.
Summarized by Wu Pi-ju
Supervised by Hu Kung-yu
Appendix:
Respondent's Uniform Invoice No.: 86349444