Skip to main content

Ministry Of The Interior: Fines To Be Imposed On Local Governments For the Illegal Presale of House

  • PostDate:2020-11-12 14:20

On October 31, the Ministry of the Interior (MOI), alongside the Department of Consumer Protection, Executive Yuan,units of consumer protection, land, and building affairs from county/city governments conducted a large-scale joint inspection. A total of 23 presale houses construction projects spanning 6 counties and cities were inspected. As suggested by the MOI, only 1 construction project was found to be without violation. A letter was sent to the local county/city government urging construction project owners to take corrective action within the time given limit. Those failing to take corrective action within the time limit or where there is clear evidence of violation shall be punished by an administrative fine in accordance with the law, demonstrating the execution of public authority. 

Temporary sales center without an approved building permit

According to the MOI, 10 sales centers or show houses were found to violate the regulations during the inspection, and most operated in temporary buildings. These sales centers or show houses must apply for an approved building permit as required by the Building Act.

The MOI issued letters to county/city governments urging them to suspend the use of those sales centers and show houses without an approved building permit and the permits must be applied for within the given time limit. In the event of an overdue application or non-compliance after reapplying, it will be treated as a new violation, and demolition of the property will be ordered to maintain public safety.

Sales contracts do not comply with MOI regulations

According to the MOI, if a sales contract does not comply with provisions stipulated in the “Mandatory and Prohibitory Provisions in the Standard Contract for Sales of Presale House” the consumer may claim that the provisions of the agreement are invalid, and corrective actions ordered by the competent authorities within the time limit prescribed by the competent authorities is not taken, an administrative fine of NT$300,000 will be imposed as stated in the Consumer Protection Act.

During the inspection, a total of 16 construction projects were found to be using purchase contracts that did not comply with the Standard Contract. These violations include failure to specify 5% of the total price of the delivery retention money as required, negotiating with consumers with a lower price, failure to specify the height and size of the parking space, failure to start the warranty period from the date of home delivery, or failure to specify compensation for size errors. The MOI has issued letters to county/city governments demanding construction project owners take corrective action within 10 days, and an administrative fine shall be imposed if failing to comply with the protection rights of consumers.

Non-compliance of statutory duties for real estate brokers

According to the MOI; if the broking agency runs its business without employing a person with the qualification of a real estate broker; if it fails to install at least a professional broker in its agency which makes over NT$600 million; or if fails to assign a broker upon the signing of a presale house sales contract, a fine up to NT$300,000 may be imposed as required by the provisions stipulated in the Real Estate Broking Management Act.  When documents, including the brokers’ certificates, are not displayed in the business office, and corrective action is not taken after being ordered by the competent authorities, a fine up to NT$150,000 may be imposed.

The inspection found 14 brokering agencies violating the regulations, and a letter was sent to county/city governments by the MOI ordering the brokering agencies to submit an explanation within 5 days. Brokering agencies failing to explain will be subject to sanctions.

The central and local government will continue inspections through cross-ministry cooperation 

The MOI finally stated that following the inspection results, not only will it continue to follow-up on improvements, related ministries and county/city governments will also be holding cross-agency meetings, building a horizontal contact mechanism in order to refine inspections.

In addition to carrying out routine inspections on presale house construction projects by county/city governments, the MOI assigns personnel for immediate inspections upon the report of selling the appointment forms. The central government will also work with county/city governments to carry out joint inspections from time depending on the market trading situation. In respect to the selling of the appointment forms related laws and regulations will also be reviewed to strengthen management and improve the presale house market as well as maintaining orderly trading.