萬國法律事務所

Taiwan’s Ministry of Interior (MOI) has recently announced amendments to the regulations governing pre-sale housing transactions. Once the amendments take effect on May 1, 2010, the measurements and prices of main buildings, additional facilities and common areas will need to be separately identified and illustrated in pre-sale housing agreements.

The new regulations aim to prevent housing developers from including excess portions of the common areas in the property certificates with respect to the total size of the units being sold. Implementation of the new regulations will result in increased security for consumers and will also have an effect on the pre-sale housing market and bank’s housing loan facilities.

It is expected that it will take about 6 months for developers, banks, agents and other relevant parties to adopt the new regulations.

There are five important points in the new regulations:

1. Consumers will enjoy a five-day period for reviewing pre-sale housing agreements. This will provide consumers sufficient time to thoroughly review and gain an understanding of the agreement.

2. Pre-sale housing agreements must clearly identify and distinguish the measurements and prices of the main building, additional facilities and common areas in the provisions. Consumers can opt not to pay for additional facilities that are not clearly listed in a property agreement. Also, consumers should compare the current price of property in the same area in order to prevent housing developers from unreasonably raising the price of the property.

3. If there are mistakes in the measurement of the property, consumers or the developers will need to compensate for the differences in the measurement.

4. Payment will only be required to be made in accordance with the progress of the construction of the property. The time between each installment payment must exceed 20 days.

5. The property agreement will need to identify the agent for the property, either the company or the individual, as one of the parties to the agreement. This is so that agents will be jointly liable in the event that the property is misrepresented in the advertisement.

The MOI has pointed out that many housing developers have found the model contract under the new regulations to be non-legally binding. However, the MOI not only amended the “Model Contracts for Pre-Sales Housing Transactions”, but it has also amended the legally binding “Mandatory and Prohibitory Provisions of the Model Contracts for Pre-Sale Housing Transactions”. In other words, once consumers have knowledge of the mandatory and prohibitory provisions that are to be included in the contracts, consumers can later claim that the pre-sales housing contracts are invalid if the provisions of the contract contradict the regulations.