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Lands, Buildings, and Houses
1.Safety of Trading Real Estate
2.What the buyers in prearranged house trade should know
3.What the buyers should know when purchasing finished houses
Consumption Information
Safety of Trading Real Estate
Real estate trades are involved in many relevant laws and complicated affairs, which cannot be entirely understood by people but can seriously affect personal ownerships of property seriously. For protecting the safety of real estate trades and consumers’ interests,
- The Basic Principle of Real Estate Trade
- Spot investigation
The buyers should do spot investigation in advance nomatter they are in trade of real estates, lands, houses, or even prearranged house sales. They should inquire clearly the area of the target estates, and various local situations, and explore the truth by asking neighbourhood if necessary.
- Understanding why the house is sold
In spite of the prearranged houses and general new houses sold by construction companies, consumers should find out why the used houses are sold, in order to avoid buing uncomfortable houses, such as “hounted houses” or the houses where murders, etc. took place. The buyers may ask the house host or other people in order to know the truth.
- Don’t covet small advantages
A real estate trade is a great event in life. The buyers should be careful not to make the purchasement a matter for regret during their life times, which were due to their desiring pretty advantages initially. Consumers had better buy idal houses by paying reasonable prices, instead of substituting great regretful losses for small advantages used as baits by deceivers.
- Don’t jump to a conclusion when making decisions
Don’t let rehousing companies or salsmen push you to make decisions in hurry, because it will be very difficult to cancel the contract once you have made the decisions. Don’t make decisions under pressures or without careful considerations, because missing a trading opportunity is not necessary a loss.
- Choose the in customer service staff carefully
The trading process of real estates is involved in a lot of laws and regulations. The buyers had better trust professionals to provide relevant services if having no time to explore the complicated legal system deeply. You can protect your interests by choosing those professionals with outstanding performance, such as excellent rehousing companies, brokerages, assessment companies or professional agencies of land and building registrations.
What the buyers in prearranged house trade should know
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Building permits
Construction companies can apply to building administrations under various local governments for starting construction work, and report the completion of construction work to them only after they have got the building permits. After their construction works pass the inspections of building administration offices, the construction companies may take the next step to apply for use licenses, by which the establishment of infrastructures of water and electricity is approved, and construction companies may proceed to deal with building registrationsfor reserve and apply for documents for title of building ameliorators.
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Acquisition of ownership of land
Construction companies sometimes engage in their construction work on their own lands, but sometimes cobuild with landowners on the latter’s lands. In the cobuilding cases, hourse buyers had better sign trading contracts of lands with landlords and another trading contracts of houses with construction companies. By doing so buyers can protect their ownerships of lands if one day constuction companies have cobuilding disputes with landowners.
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Tax burden
The allocation of tax burdens should be stipulated in trading contracts of houses or buildings. Such tax burdens include increment tax on land-value, contract tax, notarial service charges, tax on land-value, house tax, stamp tax, the connecting fees of water, electricity and gas lines, registration fees of property rights, and scrivener fees, etc. In spite of those regulated by laws and regulations (for example, the contract tax should be paid by house buyers, while the incremental taxes on land-value are imposed on house sellers), other tax allocations should be stipulated clearly in contracts, in order to prevent the occurrence of disputes in future.
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Clear indication and notes in trading contracts
The content of a trading contract should specify the location of the target land, the specified series number of the land, the area of the building basis, and percentage or units that each party is holding, and the address of the house. The copy of the seller’s construction permit with picture of the layout and the plane of the house or building should be attached in the contract as well, in order to make the content of the contract clear.
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Understanding the area and price per unit (ping) of the house
In Taiwan, the area of a house is usually counted with the number of native calculating units called “Ping”. The number of pings overing the area of the house counted by construction companies usually includes the area inside the house, the area of the balcony, and the area of public facility. Buyers should take the proportion in which the number of pings covering public facilities and balconies is to the total pings of the house. Some construction companies only provide the privately owned area and the area of public facilities. The so-called privately owned area includes the area inside the house, the area of the balcony, and the individually shared part of the area covering the one for the elevators, the staircases, and the aisles. The area of public facilities includes the areas of the basements and jutting structures on the roofs. Therefore, the buyers should notice that actually they can not use all of the prively owned area, since they usually have a misunderstanding that the price per ping is quite cheap, but in fact is very high after the area of public facilities is decucted from the total area they purchased. In addition, Fair Trade Commission made a resolution in the 216th committee on November 29, 1994, that both parties of trading contracts of houses should stipulate the itmes contained in public facilities, the way to allocate the cost of public facilities, and the list of proportion of total housing area that each houseold owns. The committee resolution has come in effect since Feburary 1st, 1996, which requires that the construction companies should do business according to the resolution, otherwise they are regarded as violating Article 24 of Fair Trade Law.
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The Partition and Layout
The partition and layout inside the house are important for residents to have comfortable and convenient lives. The buyers should notice the ventilation and the lightening of the houses too.
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Undestand the way of payment and the credit line of the loan
Many construction companies encourage people to buy houses by posting attractive advertisements. The buyer should fully understand whether the way of payment is appropriate, and how much the credit line is.
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Materials and equipments
When selling houses, many construction companies often provide printed delicated documents of explanation describing the number of pings, doors and windows, lavatories and bathrooms, contruction materials of facilities of water and electricity. Buyers should notice if the specifications of construction materials, brands, and classes, etc., have been stipulated in the trading contracts, in order to prevent construction companies from selling houses of poor quality and so causing disputes when delivering houses.
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The dates when construction work begins, completes, and houses are delivered
What the house buyers concern most is the date of house delivery. The dates when construction work begins, the deadline of completion of construction work, and the dates of house delivery should be stipulated carefully in contracts, in order to protect the buyers’ interests.
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Management and maintenance after completion
After completing the construction work in some communities, the construction companies will proceed to assist in establishing resident committees, to which the residents of the communities should make monthly payment of management expenses. The buyers should understand in advance and meet such requirements, in order to keep the communities clean.
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Contract violation
It takes about one to three years to engage in a prearranged house trade, of which the process stars from signing the trading contract and ends at actual house delivery. Therefore the buyers should pay more attention to the provisions relevant to contract violation carefully when making the trading contract with construction companies, in order to avoid suffering great losses due to the provisions of contract violation when the buyer want to cancel the contracts because they find defectness or serious problems of the houses they purchased one day.
What the buyers should know when purchasing finished houses:
- Equitable and reasonable prices
Used houses are personally traded in small quantity, so the price is not easy to determine. Both parties should evalute whether the price is reasonable or equitable by referring to successful trading cases in neithborhood. Rehousing business is very popular now. Some rehousing companies often deceive house buyers by raising the offering prices to unreasonably high and thus forming misleading house prices in real estate market when selling used houses. Therefore it is very important for house buyers to choose credible rehousing companies. For making consumers able to tell the actors who provide rehousing services, the Fair Trade Commission under Executive Yuan made a resolution in the 24th commttee on September 6th, 1995, that the rehousing company joining an alliance of another enterprise should specify on its advertisements, brands, and business cards that it is a “franchise store”, to provide consumers the reference to choose rehousing companies.
- Clear ownership of property rights
Before making the initial payment to prove the their willingness of purchasement, the buyers should apply to land administrative authorities for copies of the registration of lands and buildings (houses), and check relevant information to the ownerships, areas (number of pings), pledges, or even seizures. In addition, the buyers have to go to government agencies of public works to check the blueprints of city plan, in order to make it clear whether the houses they want to purchase are located on parks, roads, or other places used for public facilities.
- Accurate housing areas
Inspite of the area of main buildings, th areas of accessory buildings and the places for public use should be recorded in the registration of the ownerships of houses too, such as balconies, flat-tops, public facilities or jutting objects on the roofs. However, the house sellers or rehousing companies usually exaggerate the number of pings to give buyers the impression that the price per pings seems to be very low. Therefore, beforeing making the initial payment, the buyers shoud examine the documents of titles very carefully and count the precise areas of the houses, in order to prevent any disputes after signing the contracts in future.
- Defects of the delivered houses
Buyers should examine the houses with cool and rational attitudes. Is there any leaking trace on the wall? How is the circumstance around the houses? If you want to buy a house, you’d better give yourself more time to check the house and make comparison with other contracting houses in various aspects. By doing so you may prevent yourself from suffering losses that you carelessly pay the initial payments to prove your willingness of purchasement but afterwards find some defects of the houses or the houses do not meet your demands.
- Signing the trading contracts
The buyers should sign the trading contracts with the owners. If the counter party is agents who take responsibility for procuration of signature, the buyers should notice if the agents carry documentary authorizations of agent with them, in which the area or the numbers of pings of the houses, the prices, and the existing conditions and facilities should be stipulated clearly.
- Tax expenses
Both parties should note down the allocation of liabilities of tax payment in trading contracts, such as contract taxes, increment taxes on land-value, house taxes, connecting fees of water, electricity and gas lines, and notarial service charges, etc., in order to get rid of any possible dispute in future.
- The way of payment
The way of payment should be stipulated in contracts. Generally speaking, the process of making payments can be divided into four phases: (1) The buyer makes the first part of the total price when signing the contract. (2) The buyer makes the second payment when the seller has been already to collect all necessary documents for registering the transference of ownership, and handed in relevant documents, forms and certificates to the scriveners or the lawyers that both parties specified. (3) The third payment is made after all relevant taxes, fees, and incremental taxes have been paid. (4) The final payment is made after both parties complete the registration of transferring ownerships, the buyers acquire the documents of titles, and the house delivery is made clear and certain.
- Standard contracts
The provisions of various contracts of sales on commission drafted by general rehousing companies are somehow not equitable. Therefore the primary owners who want to entrust those companies to sell their houses may require the rehousing companies to refer to the “ Model for the Contract of House sales on Commission”, which was promulgated by Ministry of Interiors (MOI) on June, 14th, 1997 (and revised by MOI on August, 19th, 1998). The content of a trading contract is the basis for both parties to decide the allocation of their rights and duties in the trade. The contract will come into effect immediately once both parties make their signatures on it.
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