Tong Hui Construction Co., Ltd.

1134th Commissioners' Meeting (2013)

Case:

Tong Hui Construction Co., Ltd. violated Article 24 of the Fair Trade Law for not providing the lists of unit proportions to the buyers when marketing presale houses

Key Word(s):

Presale house, list of unit proportions

Reference:

Fair Trade Commission Decision of July 31, 2013 (the 1134th Commissioners' Meeting); Disposition Kung Ch'u Tzu No.102114

Industry:

Real Estate Development Activities (6700)

Relevant Law(s):

Article 24 of the Fair Trade Law

Summary:

The FTC received complaints from 3 informers stating that Tong Hui Construction Co., Ltd. (hereinafter referred to as Tong Hui Co.) did not provide buyers with the lists of unit proportions when selling its presale houses. Also, the list was nowhere to be seen at the location where the presale homes were sold.

Findings of the FTC after investigation:
Tong Hui Co. and its sales agent stated that when selling the presale houses, the lists of unit proportions had been placed on the counter and accessible to potential buyers on the sales site. Meanwhile, each sales clerk had also carried a copy to show to potential house buyers and explained the size of the unit they were interested in. Besides, if any buyer asked for a copy, one taken from the counter would have been given. However, the FTC had inquired other buyers who had visited the presale site and all of them denied that Tong Hui Co. or its sales clerk had provided the said list to them for the purpose of inspection.

Grounds for disposition:

(1) Since the ownership of a presale home is not yet registered, interested parties are unable to acquire related information from a land administration office. Moreover, the area size of the main building, affiliated structures and the common property, and the percentage of the common property held by each unit owner (ownership and percentage) are taken into consideration when calculating the area size and value of the real estate to be transacted. The lists of unit proportions provides important information for house buyers to understand the area held by each unit, assess whether the distribution is fair, and examine if the area size told by the seller's sales clerks and indicated in the contract is correct. It is important trading information in the sale of presale houses and has a significant effect on potential buyers' decision making. When builders and developers fail to provide this important trading information, the conduct is considered deception to potential buyers and likely to affect trading order in violation of Article 24 of the Fair Trade Law.

(2) The 3 informers all concurred that Tong Hui Co. had never showed them lists of unit proportions held by individual unit owners and the said lists had been nowhere to be seen at the selling location. Tong Hui Co. alleged that the said lists had been placed on the counter and each sales clerk had carried a copy to show to potential buyers. However, the offender was unable to provide any evidence, such as signatures of buyers to confirm they had inspected the lists, to support its allegation. On top of this, another house buyer also expressed that Tong Hui Co. had not provide the list to him for inspection.

(3) When selling presale houses, Tong Hui Co. never provided buyers the lists of unit proportions and the said lists was never displayed at the location where the homes were sold. It was impossible for buyers to understand the area size of the main building, affiliated structures and common property and the percentage of the common property held by each unit owner, to find out whether the area distribution was fair, or to confirm if the area size of the unit they purchased was correct. All these had a significant effect on the decision of potential buyers. The conduct obviously constituted unfair competition to competitors who would show such lists as statutorily required. It was deceptive conduct able to affect trading order as specified in Article 24 of the Fair Trade Law. Hence, the FTC concluded that Tong Hui Co. had violated Article 24 of the Fair Trade Law and thus an administrative fine of NT$500,000 was imposed on Tong Hui Co.

Appendix:
Tong Hui Construction Co., Ltd.'s Uniform Invoice Number: 27963823

Summarized by Yang, Chung-Lin; Supervised by Hung, Shui-Hsing

! : For information of translation, click here

(1)	Since the ownership of a presale home is not yet registered, interested parties are unable to acquire related information from a land administration office. Moreover, the area size of the main building, affiliated structures and the common property, and the percentage of the common property held by each unit owner (ownership and percentage) are taken into consideration when calculating the area size and value of the real estate to be transacted. The lists of unit proportions provides important information for house buyers to understand the area held by each unit, assess whether the distribution is fair, and examine if the area size told by the seller's sales clerks and indicated in the contract is correct. It is important trading information in the sale of presale houses and has a significant effect on potential buyers' decision making. When builders and developers fail to provide this important trading information, the conduct is considered deception to potential buyers and likely to affect trading order in violation of Article 24 of the Fair Trade Law.
(2)	The 3 informers all concurred that Tong Hui Co. had never showed them lists of unit proportions held by individual unit owners and the said lists had been nowhere to be seen at the selling location. Tong Hui Co. alleged that the said lists had been placed on the counter and each sales clerk had carried a copy to show to potential buyers. However, the offender was unable to provide any evidence, such as signatures of buyers to confirm they had inspected the lists, to support its allegation. On top of this, another house buyer also expressed that Tong Hui Co. had not provide the list to him for inspection.
(3)	When selling presale houses, Tong Hui Co. never provided buyers the lists of unit proportions and the said lists was never displayed at the location where the homes were sold. It was impossible for buyers to understand the area size of the main building, affiliated structures and common property and the percentage of the common property held by each unit owner, to find out whether the area distribution was fair, or to confirm if the area size of the unit they purchased was correct. All these had a significant effect on the decision of potential buyers. The conduct obviously constituted unfair competition to competitors who would show such lists as statutorily required. It was deceptive conduct able to affect trading order as specified in Article 24 of the Fair Trade Law. Hence, the FTC concluded that Tong Hui Co. had violated Article 24 of the Fair Trade Law and thus an administrative fine of NT$500,000 was imposed on Tong Hui Co.