Some condominium owners have complained about being forced to share land use tax, which should be paid by property developers, lawmaker Ron Lam disclosed in a statement yesterday.
These affected realty buyers have sought help from the lawmaker.
Lam disclosed that these buyers have purchased newly finished realty units from an undisclosed developer. They have not yet officially registered their ownerships of the condominiums with the government.
Under this scenario, the lawmaker noted, land use tax should be borne by the developer, out of the fact that the condominiums are not yet legally owned by the buyers.
More importantly, the taxation letter was sent to the developer, signalling that the developer is solely responsible for the settlement of the tax. The lawmaker added that should legal registration be complete, owners will respectively receive taxation letters from the Financial Services Bureau (DSF), implying that no referral by the developer is necessary.
Moreover, the lawmaker highlighted that despite there being no regulations on transactions of brand-new real properties, developers forcing buyers to pay tax under contract – which he noted as a real-life scenario – is unreasonable.
Even so, Lam highlighted, this will only arise in contractual and civil obligations, rather than tax obligations.
On the other hand, the lawmaker was also told that property buyers were required by the developer to sign authorization letters, which will empower the developer to segment or segregate sections of land from the original land plot, as well as conduct any actions and sign any public or private documents.
The authorization letters also empower the developer to represent the signatories in court to the extent that the law permits, such as in court cases concerning conflicts in ownership. The developer will also be empowered to sub-authorize to third parties.
The developer also cited the Civil Code to prevent nullification of the authorization letters without the consent of the developer, according to the lawmaker.
Another scenario is that in transactions relating to brand-new real property units, terms unfair to buyers are often found, such as requiring buyers to accept “any alterations” to public areas and advertisings on external walls.
The lawmaker did not rule out the possibility that the proposed alterations are necessary, but added that sufficient explanations should be made to buyers so that they can understand the requirements. Meanwhile, costs related to the alterations should be borne by the developer.
He also reminded that unit owners gain an understanding of the documents before signing.
