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2018-11-05 09:00
Stop, listen and watch out, read the contract carefully for your protection
Property trade involves a variety of applicable laws and professional knowledge, which makes it difficult for the public to understand. Furthermore, this is vital to the property rights of individuals. For the protection of the rights of the public in property trades, the Ministry of Interior is urging the public to read the clauses of the agreements thoroughly at the time of entering into the buy-sell agreement on property trades and try to follow the sample version of the agreement provided by the ministry as far as possible, particularly the method of payment for each installment and the kinds of documents to provide.

According to certain recent news reports, the property was quickly transferred to the account of the buyer after the buyer has paid only a small portion of the proceeds for the property, which is a form of fraud. The Ministry of Interior suggested that the key issue of this scam is that the criminals manipulated the public due to their ignorance about the transaction process and not getting used to reading the agreements thoroughly. They then delicately designed a buy-sell agreement to entice the sellers to sign the agreement and fall prey to the scam. The questionable part of this buy-sell agreement is that: it is stated in the agreement that after the full settlement of tax payment, the buyer could proceed to transfer the property to the title of the buyer. At this point, the seller would receive only a small portion of the proceeds for the property, which has already been transferred under the name of the buyer. Another problem is that the time from the transfer of property to the title of the buyer and the scheduled time for the settlement of the final payment by the buyer is far too long that the seller is unable to trace the buyer for the payment when the problem surfaced. The administrative procedure is also a part of the problem, as related documents will be forwarded to the buyer for processing the property title transfer registration after the real estate attorney has signed the agreement, to the effect that professional firms cannot offer help in screening the transaction procedure that caused property loss on the side of the seller.

To avoid this kind of fraud, the Ministry of Interior is suggesting to the public to pay attention to the following when selling property:

1. It is necessary to read the contents of the agreement thoroughly and the review period of the agreement: in this case, the main problem is that the agreement cannot protect the rights of the seller. The public is advised to use the standardized version of buy-sell agreements prepared by the Ministry of Interior and read the contents thoroughly to avoid property loss.

2. The public is advised to choose a real estate agent or real estate attorney that they trusted: in this case, the owner sold the property without an intermediary and the buyer demanded to use a real estate attorney of their choice. Since the difference of property price could be significant and the influence will be critical, property owners are advised to appoint a real estate agent that they know or trust, or adopt the system of dual-real estate attorney, to screen out the transaction procedure between the buyer and the seller through professional firms to protect their own respective rights.

3. The public is advised to take a performance guarantee: For the protection of the proceeds in the transaction and the timely delivery of the property, the property trade market currently refers the transactions to an impartial third party institution for processing under a performance account for handling the transaction of proceeds and effecting payment. At the same time, the impartial third party institution also monitors the settlement of payments and the transfer of the property title. Sellers are advised to request the buyers to undertake a performance guarantee.

The Ministry of Interior reminds the public of the standardized version of the buy-sell agreement provided by the ministry. In general, a property trade usually contains 4 stages of payment between the buyer and the seller: 1. Down payment at the time of signing the agreement: a small portion of the total proceeds should be effected at the time of signing the agreement; 2. Second payment at the time of documentation: Both the buyer and the seller should prepare all documents necessary for the transfer of the property title and registration, and forward all documents and certificates to the real estate attorney or lawyers of both sides, and make the second payment; 3. Third payment after tax payment: this payment should be settled after all taxes and dues and land value increment taxes are paid; 4. Payment due on delivery: after the transfer of property title and registration, the buyer will be issued the property title certificate, and shall effect the final payment after the clean handover of the property. The condition of payment during respective stages may vary. The seller shall determine the percentage of each payment with caution on a case-by-case basis and explicitly state the tasks to be accomplished and the amount of payment at each stage. Before collecting the proceeds for the property, do not agree to proceed to the property title transfer.

Finally, the Ministry of Interior suggested choosing the real estate service intermediary and read the contents of the buy-sell agreement carefully at the time of the property trade. Information on legitimate real estate brokers and real estate attorneys, and the sample version of the standard agreement provided by the Ministry of Interior, and important information for consumers in property trade are available at the global website of the Ministry of Interior at https://www.land.moi.gov.tw/chhtml/index.asp, or, the property information platform at http://pip.moi.gov.tw/V2/Default.aspx for download.

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Ministry of the Interior. Republic of China(Taiwan)
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Tel: 1996 Hotline of Interior Affairs(+886-2-8195-8151)
Address: No.5, Xuzhou Rd., Zhongzheng District, Taipei City 10055, Taiwan (R.O.C.)
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