Zue Shin Real Estate violated the Fair Trade Law for failing to fully disclose trade information, and therefore mislead its trading counterparts
Chinese Taipei
Case:
Zue Shin Real Estate violated the Fair Trade Law for failing to fully disclose trade information, and therefore mislead its trading counterparts
Key Word:
advantageous position, concealment of important facts, mediation fee
Reference:
Fair Trade Commission Decision of May 12, 1999 (the 392nd Commission Meeting); Disposition (88) Kung Ch'u Tzu No. 053
Industry:
Real Estate Agents (6812)
Relevant Law:
Article 24 of the Fair Trade Law
Summary:
When the complainant contacted the
respondent to discuss matters relating to the purchase of apartment, the
respondent demanded that the complainant pay it a “mediation fee” if it
desired preferential treatment in price negotiations. Not knowing the nature
of the mediation fee, the complainant inquired as to whether the fee was
equivalent in nature to a deposit. The respondent replied that the amount
was not a deposit, and would be refunded immediately should the complainant
decide not to make the purchase.
The complainant, unable to raise the necessary capital for the purchase,
called the respondent by phone the next day and informed the respondent of
his decision not to make the purchase. However, the respondent told the
complainant that the amount was a deposit, and the amount would be forfeited
should the complainant decide not to make the purchase.
The complainant then claimed that the respondent had failed to disclose
information related to the Ministry of the Interior’s standard “offer”
form [as an alternative to signing the contract], and had not honestly
explained the nature of the mediation fee.
In terms of the access to relevant information during the process of negotiation, the position between real estate agents and purchasers are often asymmetrical. For a real estate agent to use its advantageous position to demand a mediation fee, but fail to fully disclose information that would enable the consumer to choose another method of trade (such as using an “offer” form), is deemed by the Fair Trade Commission (the Commission) to be an patently unfair act capable of affecting trading order under Article 24 of the Fair Trade Law (FTL).
Although both parties made conflicting
statements in which the respondent insisted that it had disclosed the
relevant information regarding the “offer” form to the complainant but
the complainant asserted otherwise, further investigation by the Commission
indicated that the respondent, after the investigation was completed, could
only cite a limited number of cases where it had used the “offer” form.
During the investigation, the respondent claimed that due to the long period
of time that had since transpired, it could not provide cases to show that
the “offer” forms were used. In addition, the respondent was unable to
provide convincing evidence to dispute the complainant’s claim that it did
not provide the “offer” form to the complainant. Thus, it was difficult
to believe that the respondent had indeed informed the complainant about the
option to use the “offer” form.
In sum, it was determined that the respondent, when requesting payment of
the mediation fee, did not inform the complainant of the option to use the
“offer” form instead [of signing a contract]. The respondent’s
concealment of important trading information was a deceptive act used to
mislead the complainant to trade with the respondent, which had violated
Article 24 of the FTL. Penalty was thus imposed pursuant to the fore part of
Article 41 of the FTL.
With regard to the complaint that the respondent did not inform the
complainant of the nature of the mediation fee, it was deemed not to violate
the Fair Trade Law since the respondent had given the complainant a receipt
with for the mediation fee that clearly stated the rights and obligations
pertaining thereto, and such a receipt had been signed by the complainant.
Summarized by Liang, Ya-ch'in
Supervised by Hu, Kuang-yu
Appendix:
Zue Shin Real Estate Co., Ltd.'s Uniform Invoice Number: 88836722