萬國法律事務所

In October 2012, Taiwan’s Ministry of Interior promulgated an amendment to the “Mandatory and Prohibitory Matters to be Included in the Sale and Purchase Agreement of Already-built Real Property” (“Amendment”) in accordance with the authorization made under Article 17 of Taiwan’s Consumer Protection Act (there is another set of stipulations applicable to pre-construction real property as compared to already-built real property herein).

Under Article 17 of Taiwan’s Consumers Protection Act, where provision/s of standard contracts are found to be in violation of the aforementioned mandatory/prohibitory matters in standard contracts as promulgated by relevant central authority, such provision/s shall be null and void; and automatically replaced by the relevant stipulations of such mandatory/prohibitory matters.

Per the Amendment, the mandatory items that must be included in the sale and purchase agreements for already-built real property are, among others, a contract review/deliberation period (five days at minimum); a stipulation that liquidated damages borne by the purchaser may not exceed 15% of the total sale and purchase price; and seller’s warranty obligations with respect to relevant rights in connection with the subject real property.

Prohibited items that must not be included in the sale and purchase agreement of already-built real property are a stipulation that the purchaser must return the sale and purchase agreement; an exclusion of seller’s warranty obligations under Taiwan’s Civil Code after its delivery of the real property; a stipulation that relevant advertisements and statements regarding the property are only for reference; referring terms similar to the actual ownership spaces of the real property in the agreement (e.g., beneficial spaces; sale spaces; use spaces); applicable annual interests rate exceeding 20% per annum; purchaser abandons his review/deliberation period of the contract; and any provision in violation of other mandatory or prohibitory stipulations under Taiwan law.

The Amendment will become effective on May 1, 2013 per the Ministry of Interior’s order.