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No More Slag-powder Houses After Revision of Presold House Contracts

Source:Department of Consumer Protection

To comply with the amendment of "Regulations for the Implementation of Cadastral Surveys", to legalize the registration of the attached building areas, to prevent "slag-powder houses" from endangering the safety of consumers and to ensure the rights of presold house buyers, the Department of Consumer Protection, Executive Yuan(hereinafter referred to as the DCP) has reviewed the mandatory or prohibitory provisions in the "Standardized Contract for Presold Houses” (parts of drafted amendments) submitted by the Ministry of the Interior, and the reviewed "Standardized Contract for Presold Houses” has also been reported to and reviewed and approved by the Executive Yuan’s Consumer Protection Committee (the CPC). The revised contract shall be implemented soon after the promulgation by the Ministry of the Interior.

The key points of this amendment are as follows:

I. Registration of the attached building areas

Since January 1, 2018, the surveyed and mapped "balcony" has been the only attached building area that can be applied for registration into the construction license.

II. Commonly shared items

All parking spaces without an independent certificate (possibly the statutory parking spaces, the self-added parking spaces or the subsided additional parking spaces) will be included in the commonly shared items.

III. Amendment to the performance guarantee of the prepaid transactions

(I) The name of “performance guarantee mechanism” is amended to “performance guarantee of the prepaid transactions” to comply with the requirements of Article 17, paragraph 2, subparagraph 3 of the Consumer Protection Act.

(II) The classification of “performance guarantee methods agreed by the Ministry of the Interior” and "other alternative performance guarantee methods" was deleted and five performance guarantees are listed, including "Real Estate Development Trust", "Guarantee of Price Return", "Price Trust", “Joint Guarantee by Peers in the Same Trade” and “Association-sponsored Joint Guarantee Agreement”.

(III) The name of "Joint guarantee by the Association" is amended to "Association-sponsored Joint Guarantee Agreement".

IV. Addition of provisions to prohibit the reuse of slag powder in presold houses

(I) The seller shall ensure that the construction of the presold house does not contain slag powder which is detrimental to structural safety or human health and safety.

(II) If slag powder that is detrimental to the safety of the building structure or to the safety and health of the human body is used in the presold houses, the buyer may notify the financial institution to stop paying the loaned money to the seller.

V. Addition of the methods to defray the connection cost for "tap water", "electricity" and "natural gas"

(I) The inner pipe or outer pipe is defined by the base area of "presold houses".

(II) "Tap water" and "electricity" section: The "seller" shall be responsible for all the costs, no matter whether the inner pipe or the outer pipe is installed.

(III) "Natural gas" section:

1. The inner pipe fee is borne by the “seller”.

2. The buyer and the seller shall negotiate how to defray the cost of outer pipes. If it is not negotiated, the “seller” shall bear the cost.

VI. Addition of structure warranty items

Added to the warranty for the presold houses are such structure items as foundations, load-bearing walls, floor plans, roofs and so on, for which the seller shall guarantee for 15 years.

The DCP reminds consumers that as the presold houses are transacted at a very high amount, they should read the contents of the contract very carefully before its signing so as to avoid disputes and infringement on their own rights and interests. If any part of the contract does not meet the mandatory or prohibitory provisions in the “Standardized Contract for Presold Houses”, the consumer should ask the builder and its agency company to modify the contract or refuse to sign the contract so as to protect his or her own rights and interests.

The DCP also urges the builder and its agency company to provide the contract whose contents meet the mandatory or prohibitory provisions in the “Standardized Contract for Presold Houses”. If the contents of the contract do not meet the requirements of the proceeding provisions and if such contents are not rectified before the deadline as prescribed by the competent authorities, penalties will be imposed in accordance with Article 56-1 of the Consumer Protection Act.