Executive Yuan Approves 3 Mechanisms to Strengthen Performance Guarantees to Prevent Unfinished Pre-Sale Homes
To prevent pre-sale homes from becoming unfinished projects, Taiwan's Executive Yuan has approved three measures to enhance performance guarantees. A key rule is that payments made by buyers must, in principle, be deposited directly into a trust account and can only be used for construction costs and taxes.
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- 📰 Published: May 14, 2026 at 22:26
- 🔍 Collected: May 14, 2026 at 22:32 (5 min after Published)
- 🤖 AI Analyzed: May 14, 2026 at 23:22 (49 min after Collected)
Central News Agency
(CNA, Taipei, 14th, Reporter Lai Yu-zhen) To prevent pre-sale homes from becoming "rotten-tail buildings" (unfinished projects), the Executive Yuan today approved three measures proposed by the Ministry of the Interior to strengthen performance guarantee mechanisms. These include stipulating that funds paid by buyers should, in principle, be directly deposited by the buyer into a dedicated account and can only be used to pay for construction costs and related taxes, and that peer-to-peer joint guarantees include the obligation to "continue construction until completion and handover."
Last year, incidents of unfinished buildings occurred in Chiayi, Taoyuan, and Taichung. Consequently, the Ministry of the Interior proposed draft amendments to Points 7-1 and 10-1 of the "Mandatory and Prohibitory Provisions of the Standard Form Contract for Pre-sale Home Purchases." Deputy Premier Cheng Li-chun, presiding over the 98th meeting of the Executive Yuan's Consumer Protection Committee today, approved the ministry's draft amendments and requested the ministry to announce them in accordance with the law.
In a press release after the meeting, the Executive Yuan stated that the Ministry of the Interior's draft amendments aim to strengthen the "performance guarantee mechanism" for pre-sale homes to prevent unfinished projects from harming consumers' home-buying rights. The three enhanced mechanisms are: First, for "real estate development trusts" and "price trusts," the focus of the amendment is on the payment method of buyers' funds and usage restrictions. It stipulates that funds paid by buyers should, in principle, be deposited directly by the buyer into a dedicated account and can only be used to pay for construction costs and taxes, ensuring the funds are earmarked for their specific purpose.
Second, regarding the guarantee of price repayment, the Executive Yuan said the draft clearly stipulates that the scope of the guarantee liability is "the price paid by the buyer that is actually deposited into the dedicated account." Third, for peer-to-peer joint guarantees, the obligation of the guaranteeing company to "continue construction until completion and handover" is emphasized to reduce the risk of unfinished projects.
In addition, the Executive Yuan stated that to comply with the "Renewable Energy Development Act," the draft also requires that developers must detail the installation specifics and management and maintenance responsibilities of solar photovoltaic power generation equipment in the contract.
Deputy Premier Cheng instructed that since pre-sale home transactions involve large sums of money and long construction periods, affecting the rights of a broad group of homebuyers, the amendment uses diverse performance guarantee mechanisms to ensure "earmarked funds" or "continued construction to completion and handover." At the same time, in response to the trend of environmental sustainability, the contract regulations add information about solar photovoltaic power generation equipment, which can also help consumers understand future management and maintenance responsibilities from the initial stage of home purchase, reducing information gaps.
Cheng reminded the Ministry of the Interior to announce the new regulations in accordance with the law, promote the revised content through multiple channels, and, when "registering" pre-sale home contracts, to thoroughly review relevant materials to ensure that operators implement the "performance guarantee mechanism" to protect the rights of homebuyers. (Editor: Lin Hsing-meng) 1150514
(CNA, Taipei, 14th, Reporter Lai Yu-zhen) To prevent pre-sale homes from becoming "rotten-tail buildings" (unfinished projects), the Executive Yuan today approved three measures proposed by the Ministry of the Interior to strengthen performance guarantee mechanisms. These include stipulating that funds paid by buyers should, in principle, be directly deposited by the buyer into a dedicated account and can only be used to pay for construction costs and related taxes, and that peer-to-peer joint guarantees include the obligation to "continue construction until completion and handover."
Last year, incidents of unfinished buildings occurred in Chiayi, Taoyuan, and Taichung. Consequently, the Ministry of the Interior proposed draft amendments to Points 7-1 and 10-1 of the "Mandatory and Prohibitory Provisions of the Standard Form Contract for Pre-sale Home Purchases." Deputy Premier Cheng Li-chun, presiding over the 98th meeting of the Executive Yuan's Consumer Protection Committee today, approved the ministry's draft amendments and requested the ministry to announce them in accordance with the law.
In a press release after the meeting, the Executive Yuan stated that the Ministry of the Interior's draft amendments aim to strengthen the "performance guarantee mechanism" for pre-sale homes to prevent unfinished projects from harming consumers' home-buying rights. The three enhanced mechanisms are: First, for "real estate development trusts" and "price trusts," the focus of the amendment is on the payment method of buyers' funds and usage restrictions. It stipulates that funds paid by buyers should, in principle, be deposited directly by the buyer into a dedicated account and can only be used to pay for construction costs and taxes, ensuring the funds are earmarked for their specific purpose.
Second, regarding the guarantee of price repayment, the Executive Yuan said the draft clearly stipulates that the scope of the guarantee liability is "the price paid by the buyer that is actually deposited into the dedicated account." Third, for peer-to-peer joint guarantees, the obligation of the guaranteeing company to "continue construction until completion and handover" is emphasized to reduce the risk of unfinished projects.
In addition, the Executive Yuan stated that to comply with the "Renewable Energy Development Act," the draft also requires that developers must detail the installation specifics and management and maintenance responsibilities of solar photovoltaic power generation equipment in the contract.
Deputy Premier Cheng instructed that since pre-sale home transactions involve large sums of money and long construction periods, affecting the rights of a broad group of homebuyers, the amendment uses diverse performance guarantee mechanisms to ensure "earmarked funds" or "continued construction to completion and handover." At the same time, in response to the trend of environmental sustainability, the contract regulations add information about solar photovoltaic power generation equipment, which can also help consumers understand future management and maintenance responsibilities from the initial stage of home purchase, reducing information gaps.
Cheng reminded the Ministry of the Interior to announce the new regulations in accordance with the law, promote the revised content through multiple channels, and, when "registering" pre-sale home contracts, to thoroughly review relevant materials to ensure that operators implement the "performance guarantee mechanism" to protect the rights of homebuyers. (Editor: Lin Hsing-meng) 1150514