萬國法律事務所

The authority will enact a standard contract (template) (“Standard Contract”) to regulate the down payment (deposits) paid in real estate transactions, which provides that the rights and obligations of a buyer, seller and estate agent.

In practice, a real estate agent will usually request the buyer to pay a deposit in a relative insignificant amount in order to get a chance to proceed negotiation of the purchase and in case where the seller refuse to start negotiation, the estate agent will refund such deposit to the buyer. Given the escalation of the market price in the recent real estate market, many disputes have arisen. Some sellers refuse to negotiate the sale as soon as the price goes up. On the other hand, in case where the buyer refuses to buy the property the deposit will forfeit.

Such practice is seen to be in violation of the fair trade or prejudice to the consumers’ rights nor inconsistent with the Civil Code. According to the Civil Code, the seller shall refund to the buyer the down payment (deposit) received and in addition pay the buyer a compensation equivalent to one time of such down payment (deposit) in case where the seller refuse to sell the property.

Once the Standard Contract is promulgated and become effective, the violator will be imposed a fine ranging from NTD 60,000 to NTD 1,500,000 for any violation. Moreover, Fair Trade Commission may pass a guideline to impose a more severe penalty.