Chang Qun Construction Co., Ltd.

1309th Commissioners' Meeting (2016)

Case:

Chang Qun Construction violated the Fair Trade Law by posting false advertisements to market the "Jin Xi Yu Pin" housing project

Keyword(s):

Floor plan, statutory balcony space, interior space, false advertising

Fair Trade Commission Decision of December 7, 2016 (the 1309th Commissioners' Meeting); Disposition Kung Ch'u Tzu No. 105134

Industry:

Real Estate Development Activities (6700)

Relevant Law(s):

Article 21(1) of the Fair Trade Law

Summary:

1. The FTC found out on Mar. 15, 2016 that Chang Qun Construction Co., Ltd. (hereinafter referred to as Chang Qun Construction) indicated some of the balcony space as part of the master bathroom in the A2 unit floor plan included in the advertisement it posted for the �in Xi Yu Pin�� housing project in Taishan District, New Taipei City. It was false advertising and the FTC therefore launched an investigation.
2. Findings of the FTC after investigation:
   The said housing project was built and marketed by Chang Qun Construction. The company admitted that, besides the A2 unit floor plan, it had also drawn up the floor plans for A1, B1 and B2 units and the space planning was the same as what was indicated in the A2 unit floor plan. That is, some of the statutory balcony space was used as part of the interior. Meanwhile, according to the New Taipei City Government, if the housing project was engineered according to the aforesaid floor plans to include statutory balcony space as part of the interior, it would be in violation of Article 25 of the Building Act and the builder could be fined or the parts illegally constructed could be torn down in accordance with Paragraph 1 of Article 86 of the same Act.
3. Grounds for disposition:
   In general, the structures depicted in real estate advertisements and the usage of the land they are on can be an important factor in consumers�� decision on whether they would make purchases. What consumers understand is that they can use the properties in accordance with the usages specified in such advertisements. In other words, consumers have no way of knowing the usages described in the advertisements are actually in violation of related laws and regulations. If they knew the structures and their usages as advertised might be inconsistent with the structures and usages approved and there existed the risk for them to get fined or receive orders to tear down the illegal parts, have them reconstructed, or stop using such parts or restore them to the original conditions, they would not decide to make the purchases. The inclusion of balcony space as part of the interior on the floor plans for the housing project was inconsistent with the usage approved by the competent authority and the result of the practice was able to cause consumers to have erroneous perceptions about the content and usage of space or make wrong decisions. Consequently, market competition and market order would lose their functions, competitors would lose customers and unfair competition would be created. It was in violation of Paragraph 1 of Article 21 of the Fair Trade Law. Therefore, the FTC cited the first section of Article 41 of the Fair Trade Law and imposed an administrative fine of NT$1 million on Chang Qun Construction

Appendix:
Chang Qun Construction Co., Ltd.� Uniform Invoice Number: 97387606

Summarized by:Lai, Chien-Sheng; Supervised by: Tsao, Hui-Wen