Taiwan pre-sale housing: Legal risks in construction delays

Purchasing pre-sale housing offers benefits such as flexible payment schedules and customizable layouts, but it also introduces specific legal risks regarding construction delays and contract terminations.

Standard contracts typically include clauses regarding construction start dates and the acquisition of occupancy permits. If a developer fails to meet these deadlines, they may be liable for daily interest or, in cases of delays exceeding three months, may be considered in breach of contract, allowing buyers to terminate the agreement. However, developers often contest these claims in court by citing justifiable reasons for delays, such as weather conditions, government inspections, or design changes requested by the buyer.

Even when a contract is successfully terminated, buyers may face practical difficulties. If a buyer has already obtained property ownership, courts may apply the principle of simultaneous performance, requiring the buyer to return the property to the developer before receiving a full refund of paid funds. Due to these complexities in litigation and enforcement, legal experts recommend that consumers seek professional counsel when dealing with pre-sale housing disputes.