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2018-09-17 09:00
The enactment of the Rental Housing Act institutionalized general leasing and tenancy management service for trouble-free accommodation
The “Rental Housing Market Development and Regulation Act” (hereinafter referred to as the “Rental Housing Act”) became effective on June 27 2018. According to the Ministry of Interior, a system of professional rental housing and tenancy management service, known as the “rental housing service sector,” has been established for vitalizing the market of rental housing. Likewise, the three major safety mechanisms of “professional licensing system,” “scope of professional liability” and “mechanism for responding to damage” are also in place. Through the professional tenancy management under the law, assistance could be given to landlords in handling cumbersome rental housing management and clarifying the rights and obligations between landlords and tenants. With the professional and hearty service of the industry, both the landlords and tenants could have peace of mind in the rental housing arrangements.

Registration and accession to the industry association from tomorrow onward will be necessary for providing rental housing service

According to the Ministry of Interior, rental housing service includes “general leasing” and “tenancy management service.” The former refers to the leasing of premises from the landlords and sub-lease to the tenants under proper management. The latter refers to the professional tenancy management of the premises leased from the landlords to the appointment of the landlords. At the same time, a professional licensing system has also been established for qualifying practitioners in rental housing management. The service covers the handover of the leased premises from the professional manager to the tenants, collection of rent and security deposits, routine maintenance and repair, and coordination and settlement of disputes.

The rental housing service industry and related business shall be subject to the approval of the competent authority from the day the Rental Housing Act has come into full force. Business like “H706011 rental housing management” and “H706021 general leasing of rental housing” shall be reviewed for approval in advance, followed by the application for the approval of operations and the completion of business registration, payment of performance bond, staffing of rental housing management personnel, accession to the industry association at the locality of the premises, and acquisition of the registration license before proceeding to operation.

The amount of performance bond shall be calculated on the basis of the location of the business and the size of operations. Accordingly, the amount of NT$150,000 is set for each location and an additional NT$100,000 is required for each additional location with 250 business contracts or more in the operation. If there are more than 100 locations, an additional NT$100,000 is payable for each location beyond 100. If there is no industry association established in a specific district or region, accession to the business association of the locality in the first place is required.

Three facets of safety mechanism for trouble-free rental housing management

The system of the general leasing and tenancy management system entailed three major safety mechanisms of the “professional licensing system,” “scope of professional liability” and “mechanism for responding to damage” for the proper protection of rental housing service, emphasized the Ministry of Interior.

In the aspect of “professional licensing system,” the Rental Housing Act requires the institution of the system of licensing for the rental housing management personnel to ensure the professional standing of the tenancy management service. Accordingly, all prospective practitioners should receive 30 hours of training and pass the qualifying examination organized by the National Federation of Rental Housing Service Association of the ROC (hereinafter referred to as the “National Federation”) and licensed with the certificate of professional rental housing manager through registration before proceeding to the engagement in business operation.

For the protection of the right of business for those who are in business before the enactment of the Rental Housing Act, they have 2 years of grace period in continuing their operation. However, their operation shall still be bound by relevant requirements under the Rental Housing Act. Further to the personnel who have been qualified with licensing for the engagement in the business of rental housing service, the rental housing service sector could also employ the aforementioned personnel as rental housing managers within a period of two years after the Rental Housing Act has come into full force.

In the aspect of the “scope of professional liability”, the Rental Housing Act specifies the professional liability of the rental housing service sector in performance for upgrading the quality and reliability of the general leasing and tenancy management service, which includes: no exaggeration in advertising, written agreements and receipts for service charge, and other important documents shall be affixed with the signatures of the professional rental housing management personnel, the “agreement on appointment of management” used by the tenancy management service providers, and the “General Leasing Agreement” and the “Subleasing Agreement” used by the general lessee of the industry, which should be conforming to the particulars for inscription (points of agreement) and exclusions (points of agreements) set forth by the Ministry of Interior. The content of the advertising on rental premises posted at the websites of the rental housing service providers shall contain information on the whole truth of the floor area, age of the building, storey, and legitimate use of the premises.

In the aspect of “responding to damage”, the Rental Housing Act explicitly states that the parties concerned may claim for any damage by requesting the National Federation for appropriation of the funds from the performance bond tendered by the firms of the industry as compensation for the protection of the rights and privileges of the parties concerned in rental housing service.

The government has spared no effort in speeding up the development of the rental housing service sector and its professional associations. Accordingly, the Ministry of Economic Affairs have already introduced the new business items of “Rental Housing Tenancy Management Service” and “Rental Housing General Leasing Service” for registration, and also the categories of organizations for the “rental housing service sector”. Those in the real estate industry who are interested in rental housing management business of general leasing and tenancy management service may form into a group of at least 5 companies and apply for the registration as a professional association in the district or regions after proper business registration after the Rental Housing Act has come into full force. Likewise, 3 or more professional association for a municipality may apply for the organization of the National Federation of the professional associations. Until the formal establishment of the National Federation, the collection and keeping of performance bonds, the training and examination of professional rental housing managers and other related business shall be governed by the Rental Housing Act through the appointment of a third party.

According to the Ministry of Interior, the general leasing and tenancy management service system has been adopted by social housing for the moment, and will be extended to regular rental housing in the future with a view to upgrading the overall quality of rental housing management service and protecting the rights and privileges of the people in residence. Those who are in business at the moment or interested in the business of general leasing and tenancy management service are advised to join the industry as soon as possible. This will help to develop a situation where the landlords, tenants, and service providers are winners. For further information, visit the official website of the Department of Land Administration of the Ministry of Interior for the section of “Rental Housing Act” at https://www.land.moi.gov.tw/chhtml/hotnewsall.asp?cid=1589

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The Ministry of Interior hosted a press conference on the professional general leasing and tenancy management service system of the “Rental Housing Service Sector”.The Ministry of Interior hosted a press conference on the professional general leasing and tenancy management service system of the “Rental Housing Service Sector”.
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