In the advertisements of pre-built apartments, construction companies made use of terms such as "usage area" and "interior area" to represent the construction area, and violated the Fair Trade Law
Chinese Taipei
Case:
In the advertisements of pre-built apartments, construction companies made use of terms such as "usage area" and "interior area" to represent the construction area, and violated the Fair Trade Law
Key Words:
usage area, common area; false, untrue, or misleading advertisements
Reference:
Fair Trade Commission Decision of August 3, 1994 (the 147th Commission Meeting); Disposition of (84) Kung San Tzu
Industry:
Real Estate Industry (6040)
Relevant Laws:
Article 21 of the Fair Trade Law
Summary:
1. Whether an advertisement is considered false, untrue, or misleading shall be determined by the understanding of the advertisement's intended audience. In the advertisements of pre-built apartments, construction companies made use of terms such as "usage area", "common (facilities) area", and "interior area", all of which are terms not legally defined; when devising and using such terms in the advertisements, construction companies should try to avoid misleading the intended audience. In addition, apart from labeling the "usage area", "common (facilities) area" and "interior area", the construction companies also included the terms "floor plans" and "furniture arrangement reference plans" in their advertisements; these plans were to serve as references for the prospective buyers when planning for the use of the available room areas. Although these pictures were to inform the prospective buyers of the interior space allocations and not to make representations of the available floor space, it was easy for the general public to associate the advertised floor area with the pictures when looking at the "usage area", "common (facilities) area" and "interior area" together with the main components of the pictures on the advertisements. This caused the general public to misunderstand that the "usage area" was limited to the area inside the main entrance of the building as shown in the pictures, including the area for the layout of the furniture and the ancillary structures such as the balcony.
2. Taking into account the long-standing practice of the real estate industry, the need to safeguard of consumers' interest, and the need to make public information about transactions; the Fair Trade Commission, at its 147th Commission Meeting, reached the following resolution: In advertisements of pre-built apartments where a construction company uses terms such as "usage area", "common area", "interior area" and "private-owned area", or other terms not legally defined and which are unclear to the trading counterpart, and where such terms are not clearly explained in the advertisements, causing the trading counterpart to misunderstand the area involved, such advertisements are deemed to be misleading and in violation of Article 21 of the Law. However, where the construction company has stated any of the following in the advertisement of pre-built apartments, such advertisement shall not be considered misleading: (1) Where the construction company has, in a noticeable area of the advertisement (such as near the words "usage area", "common area", "interior area", and "private-owned area"), stated the meaning of such terms, using words whose size is not smaller than the size of the words used to indicate the floor area, to prevent the trading counterpart from being misunderstood. (2) Where the construction company has, in the advertisement for pre-built apartments, stated the area of the "main structure" or of the "interior area" that the general public can freely use, does not include the area of ancillary structures such as the balcony, utility area, flower planters, and open balcony. Since the above practices are common to the construction industry, the Commission, in its authority for administration guidance, has guided the construction companies to make corrections in order to maintain trading order, to protect the interests of the consumers and to improve the transparency of transaction information. Besides notifying those companies that have been reported to be in violation of the Fair Trade Law and requesting corrective action, the Commission has also supervised the construction industry to establish and complete implementation of corrective measures by Nov. 1, 1994. If, after this date, any construction company is found to place identical or similar advertisements as those dismissed above, such company shall be penalized by the Commission in accordance with Article 41 of the Law.
Summarized by Liu, Chao-chen
Supervised by Hsu, Chao-ying
＠: For information of translation, click here
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