The construction company should state, in the real estate purchase contracts, the area or the proportion of the public facility allotted to each individual owner
Chinese Taipei
Case:
The construction company should state, in the real estate purchase contracts, the area or the proportion of the public facility allotted to each individual owner
Key Words:
actions that are deceptive or obviously unfair, public facilities
Reference:
Fair Trade Commission Decisions of September 6, 1995 (the 204th Commission Meeting), April 17, 1996 (the 216th Commission Meeting) and the 235th Commission Meeting; Disposition (85) Kung Yi Tzu No. 09490; Disposition (85) Kung Yi Tzu No. 850085-001; Disposition (85) Kung Yi Tzu No. 8502338-001
Industry:
Construction Investment Industry (6811)
Relevant Laws:
Article 24 of the Fair Trade Law
Summary:
1. Due to the high number of disputes over land allocation and land area during the transaction of pre-sale apartments, the Fair Trade Commission (hereinafter referred to as the Commission) has, at the end of 1994, requested construction companies to clearly define in their advertisements of pre-sale apartments, terms such as "usage area", "common area", "interior area", "privately-owned area", or other non-legal terms that are unclear to the trading counterparts; the area of the "main structure" or of the "interior area" for private use, excluding that of the ancillary structures, shall also be stated. Despite such resolution, the Commission has continued to receive complaints from the general public, claiming that construction companies were using areas allocated for public facilities to compensate for the insufficient floor areas, leading to mis-quoted floor areas or insufficient interior floor areas. After investigation by the Commission, it was found that the complaints resulted from the failure to state clearly in the contract the contents of the public facilities and their methods of allocation by both transaction parties.
2. Since the allocation of the public facilities will affect the calculation of the floor area under transaction and is an important condition for the transaction, the Commission, in order to ensure that transaction information is made public in accordance with the spirit of fair trade, has resolved in its 204th Commission Meeting, the area of public facilities or the proportion thereof allocated to each of the individual owners shall be clearly stated in the real estate purchase contract. The Commission further invited representatives from the Consumer Protection Commission, Ministry of Interior, the construction industry, professional land registration agents, and consumer groups for meetings and discussions. In its 216th Commission Meeting, the Commission has resolved that starting February 1, 1996, construction companies shall include the following in real estate purchase contracts; otherwise, the construction companies shall be deemed deceptive or obviously unfair and in violation of Article 24 of this Law. (1) list of shared items (public facilities); (2) allocation of the public facilities and its method of computation; (3) an allocation table, clearly defining the portion allocated to each individual owner. The construction company may, at its own discretion, provide such information for the general public, distribute to the individual owners, or allow the individual owners to freely access such information. In addition, based on the non-retroactive principle, the aforementioned corrective resolution shall not apply to those real estate purchase contracts entered into prior to the implementation of the resolution.
3. The Construction Investment Association has forwarded a letter to the Commission requesting clarification on several issues relating to the aforementioned resolution. After inviting representatives from the construction industry and other relevant agencies to a symposium, the Commission, in its 235th Commission Meeting, made the following supplementary explanations: (1) The aforementioned resolution may not be applicable to cases where the real estate ownership registration has been completed during the signing of the purchase contract, and where the relevant ownership documents are sufficient to provide an understanding of the allocation of public facilities. (2) The categories covered under "public facilities" shall be listed item by item. However, other added issues beyond the responsibility of the construction company, together with the provisions for handing such issues, may be included in the purchase contract. (3) The allocation table shall be show the computational results of the allocation of public facilities within the entire area. It shall at least show the different facilities allotted to each individual owner as a proportion of the entire public facility. Where applications for modifications are filed in accordance with law, leading to a change in the proportion or description of the allotted public facilities, an agreement shall be made between/among the parties concerned; provided, such agreement shall not violate the corrective measures of the aforementioned resolution.
Summarized by Lin, Hui-yun
Supervised by Hu, Kuang-yu
＠: For information of translation, click here
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