Home→Guidelines→Real Estate Sales Practice Regulations - Regulations Governing Housing Advertisements


:::

Real Estate Sales Practice Regulations - Regulations Governing Housing Advertisements
 Guidelines

I. Background

The high dollar value of real estate transaction usually means that most consumers will only engage in such transactions for a limited number of times. This follows that most consumers lack the experience in purchasing real estates. This lack of experience is amplified by the scarcity of consumer information. These conditions allow builders / agents to conduct business transactions through unfair trade practices. Practices prominent in these areas are dominated by false, deceptive and untrue advertisement which mislead consumers. These types of advertising are seriously affecting the market trading order.

The Fair Trade Commission, in the effort to maintain market trading order of the real estate sector and the protection of consumers' rights and interests, has established a set of well-defined guideline for the regulation of real estate advertising. The guideline will correct builder / agent practices, to prevent them from adopting traditional [unscrupulous] distribution / marketing approaches or unknowingly, violate the Fair Trade Act.

In Taiwan, housing units are traditionally and generally sold in advance, prior to the start of the construction. This follows that consumers heavily rely on the advertising available in making the decision to buy. To address this, the Fair Trade Commission has established a set of regulation "Real Estate Distribution Practices - Regulation of Advertising in Real Estate". This regulation is set up after the Commission consulted decisions and real estate advertising regulations of Japan and Korea. The regulation, in addition to be a reference for staff members and Commissioners of the Fair Trade Commission, is available to the general public.
Explanations of cases are based on issues within the applicability of the Fair Trade Act. The legal relationship between the parties involved in the real estate transaction is subject to the relevant authorities in charge.

II. Advertisers of real estate are required to take account of the following:

    1. Definition
      Industrial factory buildings refer to buildings constructed on industrial land as classified under the city zoning plan, or land excluded from city planning in "Category D", to be used for the construction of industrial purposes.
    2. Aim of regulation
      Advertising of industrial factory building shall not mislead the public to believe an industrial factory building for a house, an office or a shopping mall.
    3. Advertising should include the following items
      Advertising of industrial factory building shall clearly specify that the construction site (area) is restricted to its usage as an industrial site under the city zoning plan or "Category D" construction land and to include statements or illustrations that the building constructed is to have functions related to industrial use. For example, the advertisement should clearly specify, "Investor and Constructor / Construction Company; Building (or Purpose) Permit No. Category of Land / Industrial Zone (or "Category D" Construction land); End- use of Building / Factory."
    4. Advertising should not include the following items
      Advertising of industrial factory building are not to use words such as living room, bedroom (master bedroom), play room, study, drawing room, shop, mall, underground street, supermarket, stall or boutique to mislead consumers to believe that the building can be used for residential or commercial purposes. In addition, misleading pictures which deceive consumers to believe the units are for residential or commercial purposes are not to be included on the advertisement.
    5. In the case where the advertisement for industrial use factory building states, "Interior design and decoration: first floor store front inlaid with marble; the second floor above has living room, dining room, bedroom,...,bathroom;..." or is illustrated with pictures, floor plan and floor plans of furniture which are similar to the wording, or makes parallel comparison with a residential unit, an office or a shopping mall all contribute to mislead and deceive the public to believe that the units can be used for residential or commercial purposes.
    6. Case studies
      A violator of the Fair Trade Act made claims that the required wordings: "Category of Land/ Industrial Zone" have been included in to advertisements and contract documents in addition to informing consumers that "the site is in the industrial zone" and "the building is constructed for factory use." The violator did not intend to mislead and deceive the consumers. However, the advertisement also states "An incredible relaxed and comfortable lifestyle where your family can breathe freely. Prestigious high-ceiling leisure hall (drawing room). Add a duplex to the back of the building as guest room or children's play room."
      These descriptions did not specify the purpose of this building as a "factory" for industrial use. In addition, consumers have been misled to believe the industrial factory to be a residential community. Moreover pictures of living room, dining room and bedroom are also used in the advertisement. Though the annotation "Illustrations: Reference only" was attached, the advertiser did not carry out the duty to inform the consumer that the construction site is on industrial land. To sum up, the advertisement in dispute misled the consumers to take the industrial factory for a residential house and to conduct the transaction based on such advertisement. Therefore, this advertisement was decided by the Commission to be a false, untrue and misleading presentation as to the content and purpose of the product.
      (excerpted from FTC Decision No. 036,1992, Dated Dec. 29, 1992)
    1. Definition
      Civil housing refers to residential units built according to the regulations of civil residents. This type of construction is funded by the builder / constructor on privately-owned land according to the incentives provided in the regulations.
    2. Aim of regulation
      Advertising of civil housing units should not mislead the public to believe that the units are directly funded and constructed by the government.
    3. Items to be included in advertising
      Advertising of civil housing units should clearly identify the constructor investing in and building the units; the date and the ordinal number of the official document of the incentives approved by the authority in charge; the procedure and limitations regarding the application for purchase, preferential conditions and the number of consumers who can enjoy such conditions.
    4. Advertising should not include the following items
      Advertising of civil housing units should not conceal the name of constructor investing and building the units or makes use of the governmental fame.(for example, by claming specific governmental organization as a sponsor or a joint constructor). The advertising should not mislead consumers to believe that there is no minimum qualification requirement for purchase. If the civil housing is only partially initiated by the government's incentive program, then advertisements should not mislead consumers to believe otherwise.
    5. Case studies
      A case investigated by this Commission involved civil housing units. According to regulations for civil housing, constructors / builders of these units are required to submit terms and conditions relating to purchase as well as the building permit to the civil housing authority of district government for approval prior to sales.
      Contents of marketing advertisements, in addition to specifying the ordinal number of the official documents, be identical to those submitted for official approval. In this case, referring to a letter from Keelung Municipal Government of August 4, 1992, Gi Fu Jai Zu' No. 6150; the advertiser is still waiting for official approval when the advertising campaign started. Advertisements included "... in the approval process by the Residential and Zoning Bureau." This claim is obviously false and untrue and has misled consumers to believe that the civil housing is invested and built with government incentives. In addition, if purchasers of the civil housing units need preferential loans, the construction company should compile a name list, attached with the relevant documents for submission to the district government for approval before filing an application to the Land Bank for a civil housing loan.

      The Fair Trade Commission, based on the advertisement and the lending terms in the advertisement made the decision that the contents are misleading consumers.
      (excerpted from FTC Decision No. 039, 1992, Dated Nov. 11, 1992)

    1. Advertising should include the following items
      Advertising of buildings shall clearly specify or identify, by words or illustrations, location of the construction site. In the case where the sales location for the building differs from the actual construction site, advertising should clearly indicate the actual location of the site. For example, an advertisement read "Construction site: Taichung City, junction of Wen-Xin Road and Gong-Yi Road". However, the actual location is two blocks away from Wen-Xin Road (Ta- Kwang Street is between Wen-Xin Road and the construction site) and three blocks away from Gong-Yi Road (Ta-Dun 11th Street and Ta-Dun 12th Street are between Gong-Yi Road).
      Another example is that the address, printed on the advertisement, is merely the location of the sales center. An advertisement stated, "Location / In front of Tung Hai University, Chung Kang Road", which is the location of the sales center. The actual location of the construction site is in Taichung Hsien. This advertisement is deceptive and misleading to consumers.
    2. Advertising should not include the following items
      In the case where the location of the construction site is at a distance from a certain landmark such as a school or park, the words "next to" or "close neighbor" should not be used in advertising. For example, if the location of the building is 500m away from a particular site, it cannot be described as "in close proximity with" that particular site in the advertisement.
    3. Case studies
      A violator of the Fair Trade Act concealed the actual location of the construction site for sale and presented the address as" in front of Dong-Hai University, at the junction of Chong-Sans Road and Guo-Ji Street" both in words and pictures of the advertisement. The public, seeing such advertisement, would be easily misled to believe that the building is located in the neighborhood of "Dong-Hai University, at the junction of Change-Sans Road and Guo-Ji Street". However, after on-site investigation by members of the Fair Trade Commission found that the address, "in front of Tung-Hai University, at the junction of Chong-Sans Road and Guo-Ji Street", printed on the advertisement is merely the location of sales center and the actual location of the construction site is 4km from the sales center. In this case it is obvious that the falsely advertised location was used to gain more opportunities for business transaction. Therefore, the advertiser is decided by the Commission to have violated paragraph 1, Article 21 of the Fair Trade Act. The location of a construction site is crucial in real estate transactions, having great influence on the price and sales volume.

      Due to the higher dollar amount of real estate transactions than general commodities, in general, a consumer would go to the sales center and ask for details in person. The constructor thus have the opportunity to correct the deception and the untruth relating to the advertisement. However, such correction can not exempt the advertisement from being considered as a false, untrue and misleading one. Although the violator displayed a copy of construction license and the picture of the location of the construction site at the sales center, the advertisement would still be deemed as false, untrue and misleading.
      (excerpted from FTC Decision No. 007, 1994, Dated Jan. 24, 994)

    1. Advertising of housing describing its traffic condition in terms of distance, shall calculate such distance on the basis of the actual length of the roads rather than assuming the distance between two points to be straight lines. For example, if the advertisement states "200m from the station", the 200m shall be the distance of the roads from a particular site (construction site) to the station, including the length of underground passages and pedestrian flyovers.
    2. While describing the traffic condition or the distance in terms of the time spent by walking or by car in an advertisement, such time should be calculated under normal traffic condition; and the time of waiting for traffic light may be excluded. As for the basis of calculation, the walking speed may not exceed 80m per minute and the driving speed shall not exceed the speed limit. For example, if the advertisement states "Only 10 minutes' walking distance to the station," the distance of the roads from a particular site (construction site) to the station, including the length of underground passages and pedestrian flyovers, shall not exceed 800m. If the advertisement states "Only 10 minutes' driving distance to the station," the time spent driving form a particular site (construction site) to the station, including the length of underground passages and pedestrian flyovers in ordinary traffic condition, excluding waiting time at traffic lights, shall not exceed 10 minutes.
    3. While describing the traffic condition or the distance in terms of roads under construction (i.e. a second freeway) or facilities (i.e. the MTR system) in an advertisement, the fact that such roads or facilities are still under construction shall be stated. For example, "Only 10 minutes' walking distance to the MTR station - completion in December 2000".

      1. Advertising of construction sites should clearly specify the areas of the main building, adjoining building and identify all areas to be shared by all buildings. Terms such as "Actual Size", "Size for Public Facilities", "Benefits", "Size Sold" or any other non legally binding terms used in describing or indicating the size of a site should not be used. In the case these terms are used, advertisements should clearly indicate in the advertisements (e.g. next to "[Usable] Size" or "Size for Public Facilities"), printed in characters not smaller than those printed for size of the unit. For example, in the case the advertisement of a building reads, "Size: 30 pings; Public facilities: 4 pings" should include "Size includes: main area, balcony / terrace and flower bed; Public facilities include: elevator(s), hall-way, basement, water tank(s), room for mechanics, ground level lobby as well as any other public space to be shared by all residents. (1 ping is approx. 3 square feet)
      2. Any terms referring to sized used in advertising buildings are required to follow regulations of Land Registration.

      1. The advertisement shall not describe or illustrate the space for a balcony in the plan approved in construction permits or permits for use as a part of living room (or bedroom).
      2. The advertisement shall not describe or illustrate the space for a terrace in the plan approved in construction permits or permits for use as a part of the store.
      3. The advertisement shall not describe or illustrate the space for a beam or a column in the plan approved in construction permits or permits for use as a space for furniture.
      1. An advertiser has advertised (as in the published floor plan of Section B 2nd-5th floors) that Section B, 2nd-5th floors, Apartments 1-4 have a semi-circular balcony outside the master bedroom. According to the violator, the design was later discarded because it contradicted an architectural regulation which requires the total area of balconies per floor not to exceed one eighth of the total floor area. The investigation conducted by the FTC verified that the master bedrooms have indeed no adjacent balconies. Therefore, the advertisement published by the violator is deemed false, untrue, and misleading.
        After the amendment of the floor plan, the violator was awarded Construction Permit No. 0043 by the Bureau of Buildings and Construction, Keelung Municipal Government on February 15, 1992. However, the advertisement remained unrevised as of May 1992, when the violator entered a transaction contract with the claimant. Although it is argued that the approved floor plan was available to the other party for reference and therefore the advertiser did not advertise in a manner that is false, untrue, or misleading, the FTC made a decision that the advertisement is false and misleading.
        (Excerpted from 1995 FTC Decision No. 001, dated June 1, 1995)
      2. The design of a building approved by the Bureau of Buildings and Construction, Taipei County Government, Permit No. (Panchiao) 232 in 1993, contains a design for covered-sidewalks. The ground-floor plan provided by the advertiser also contains designs for storefronts, mandatory covered-sidewalks, garage elevators, and staircases. However, the ground-floor plan in the advertisement not only failed to specify the area reserved for mandatory covered-sidewalks, the plan also showed that the same area was divided into apartments/storefronts A1 through C3. Moreover, the layout of Apartment C3 on the same page of the advertisement contained bathroom, toilet, and living room designs, with a footnote which read "(above) C3, ground-floor 6.08 pings; 7th floor 7.89 pings". As a result, the general public, when viewing the advertisement as a whole, cannot be expected to recognize the design of the mandatory covered-sidewalk and can easily mistake the area, layout, purpose of C3 units as the same as the layout plan containing bathroom, toilet, and living room designs. Therefore, it is decided that the advertisement published by the violator contained statements that are false, untrue, and misleading. It is argued that the covered-sidewalks were drawn with dotted lines in the ground- floor floor plan. However, such sidewalks are the important part of the building, which accounts for 48.36% of the measurement of the ground floor, and 60% of the ownership. It is not difficult to print the words of "covered-sidewalks" at the relevant sections in the advertisement. The FTC made a decision that the advertiser has violated the Fair Trade Act.
        (Excerpted from 1994 FTC Decision No. 104 , dated Oct. 10, 1994)
      3. The violator did not show that a beam juts out at the connecting point between the window sill and the wall column in the poster of the furnishing plan. However, according to floor plans, a beam juts out in the master bedroom of Unit F on 8th Floor, which does not match the furnishing plan. The advertisement is decided by the Commission to be false and untrue. The violator stated: "Under normal construction circumstances, there are bound to be columns." However, the seller concealed the beam in Unit F on the 8th floor, and illustrated the space with furniture in the floor plan, which misleads consumers to believe that there are no beams jutting out in the master bedroom of Unit E and F on 3-12 floor. This is decided by the Commission to be misleading regarding the content and usage of the building.
        (Excerpted from 1993 FTC Decision No. 019, dated May, 3, 1993)

      1. If the advertisement indicates "the entrance on the ground floor will be equipped with computer card key," "the elevator will be the brand of Ta-Tung Odes, Mitsubishi, Hitachi or Toshiba," then the entrance at ground floor must be equipped with computer card key, and the elevator will be one of the said four brands.
      2. If the advertisement indicates "aluminum windows with the "!A" sign ("Standard Approved Mark") such as Chong-Hwa or Li-Bar will be used," the aluminum windows used, although not limited to the brands of Chong-Hwa or Li-Bar, will be others recognized by the "!A" sign.

      1. The surrounding of a building such as, walking trail, swimming pool, gym, garden, pagoda and so forth and public facilities such as, school, park, sporting field, government organizations and so forth advertised shall be the same as that of the completed construction project.
      2. Advertising which include public facilities under construction should clearly specific the incompleteness of the facilities, for example, to include on the advertising, "Adjacent to planned site for park."
      3. In the case the surrounding of a building is privately owned or is inaccessible to the general public, this shall also be clearly indicated in the advertisement.

      1. Advertisements are not to indicate that the building has been reviewed by the authorities in charge of municipal, provincial (city) (bureau) construction and has the construction permit before the actual recipient of the construction permit or the permit to use. For example, the advertisement of a building undergoing the application procedure but has not yet received the building permit states that "Construction Permit No. / Kong Jen Zu No.".
      2. Advertising of a building are not to make use of the fame of government organizations or certain famous persons. For example, a public listing corporation advertised, "Construction supervised by the Security and Exchange Commission".
      1. A violator of the Fair Trade Act painted a 19-storied building on the advertisement. In addition, brochures are printed with "4th floor--18th floor", "19th floor", "4th floor--12th floor", "13th floor", "14th floor--18th floor", "4th floor- -19th floor". Both of these advertising materials by words and illustrations do not reflect the design of 7-storied building with 1 underground level approved by "Construction permit: 84 Kong Jen Chu Kuan Zu No. 0338 of Tao Yuan County". However, the actual construction permit was granted on April 27, 1993 with the serial number Kong Jen License No. 7198 of Tao Yuan County.
        Therefore, the advertisement in question was false, untrue and misleading the public to consider that constructors had already obtained all the necessary rights for land-use, leading consumers to believe authorities have already reviewed the construction plans. In addition, consumers may be deceived about their rights for the land or mistake the date of actual delivery of the building.
        (Excerpted from 1993 FTC Decision No. 023, May 10, 1993)
      2. An advertiser advertised, "First class construction, supervised by the Security and Exchange Commission, quality guaranteed". The advertiser provided certificates of business registration to prove that the constructor of the building is indeed a first class constructor. In addition, the advertiser is also a public listing corporation, approved and supervised by the Security and Exchange Commission. However, the Security and Exchange Commission is in charge of subscription, publication, solicitation and other relating services, and has nothing to do with the quality of the building. Therefore, the advertiser is making use of the fame of governmental organization which mislead consumers to believe that the buildings are "supervised by the Security and Exchange Commission" and "quality guaranteed."
        (Excerpted from 1994 FTC Decision No. 061, June 24, 1994)




一個鐘的符號做為選項的開頭Privacy Policy一個鐘的符號做為選項的開頭Security Policy
Fair Trade Commission, Executive Yuan, R.O.C
Address:12-14 F, No. 2-2 Jinan Rd., Sec. 1, Jhongjheng (Zhongzheng) District,
Taipei City 100, Taiwan (R.O.C.)
Tel:886-2-23517588
E-mail: ftcpub@ftc.gov.tw
Best browse in 800*600 pixel with IE6.0 or above

(Last Modified：2005/12/10 15:03:45 )