萬國法律事務所

In order to accommodate changing needs in the lease market and to advance fairness and reasonableness in lease contracts, as authorization by Article 17 of the Consumer Protection Act, the Ministry of the Interior (“MOI”) announced a draft of Mandatory and Prohibitory Provisions for Standard Form Lease Contracts (“Regulations”) on October 13, 2015. The draft Regulations were published to the general public for comments during the term ending on October 26, 2015.

Based on the draft Regulations, matters such as the method of sharing utilities charges and the compensation due for leasee’s failure to return the leased property per lease terms must be specified in leases. Additionally, it will not be permissible to state in a lease contract that a lessee shall not file for lease expenses or that after the handover a lessor is exempted from liability due to defects in the leased property.

The above draft Regulations were announced and are based on provisions of the Consumer Protection Act. As such, after officially becoming effective, the Regulations will only mandatorily apply to leases entered into between traders or lessors that operate in the leasing business and consumers. The Regulations will not mandatorily apply to leases entered into between general natural persons.

The MOI stated that lessors/lessees may request that the Lease Contract Template announced by and to-be-modified by the MOI be referred to for leases entered into between general natural persons.

It is not known when will the finalized Regulations might be officially announced and or take effect.