In recent years, the pre-sale housing market has been booming, and frequent transactions have caused many disputes. A few days ago, the media received a complaint that some builders unconditionally delayed the delivery of the house for two years. If the buyer is unwilling to wait, builders are only willing to refund the price paid without interest, which has seriously violated the interests of the house buyers. In this regard, the Department of Land Administration of the Ministry of the Interior issued a press release on February 11, 2022, clearly setting out the responsibilities of the builders when the pre-sale houses are overdue.

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This press release cites the Ministry of the Interior’s announcement of “Mandatory Provisions to be Included in and Prohibitory Provisions of Standard Form Contract for Sale of Pre-sale House.” According to the provisions of paragraph 2 of section 12, if the builder fails to start the construction or obtain the use license after the deadline agreed by both parties in the contract, the builder shall pay the default interest for each delayed day at the rate of five ten thousandths of the total price of the house and land paid. If the builder fails to start construction or obtain a license for use within three months, it will be regarded as a breach of contract by the builder and will be dealt with in accordance with the penalties for breach of contract. The buyer not only has the right to rescind the contract to request the builder to refund the total price of the house and land paid but also has the right to request compensation from the builder for liquidated damages.

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The Ministry of the Interior further stated that the buyer could complain to the consumer service center of the county or city government or the consumer protection officer for the dispute regarding the delayed completion. It also warns that if the builder delays the delivery of the house, it has violated the standard form contract for the sale of pre-sale houses, and the county or city governments can require the builder to perform the contract according to Article 36 of the Consumer Protection Act. If the builders still fail to correct, they shall be punished by an administrative fine of up to NT$1,500,000 for each violation in accordance with Article 58 of the Consumer Protection Act.

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The above statement of the Ministry of the Interior regarding the delay in the delivery of pre-sale housing should be noted by both the buyers and sellers of pre-sale houses. We will also continue to monitor the development of issues related to pre-sale house transactions.

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（Author: Lian-Wei-Zhong, Intern Attorney）

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