Chapter  2. Improving Rental Housing Relationship

Article 5
The Consumer Protection Act applies if leases are in a consumer relationship. For leases not in a consumer relationship, the competent authority in the central government may prescribe terms that leases shall and shall not include.
Clauses that leases shall include, referred to in the previous Paragraph, may contain:
1. The major contractual rights or obligations.
2. The effects of contract breach.
3. The right to terminate and the legal effects.
4. Other major matters related to contract performance.
Clauses that leases shall not include, referred to in the first Paragraph, may contain:
1. Limitation or waiver of liabilities or obligations of a lease party.
2. Restriction or deprivation of rights that a lease party otherwise may exercise, or imposition of extra duties or obligation on a lease party.
3. Other obviously unfair stipulations.
In leases not in a consumer relationship, terms are of no effect if violating the prescription by the competent authorities referred to in the first Paragraph. Terms that such leases should include but fail to include still constitute part of the lease. This rule applies in oral agreement as well.
Where any lease terms, or part of the terms thereof are held to be null or void, or do not constitute part of the contract, then if removal of such terms does not affect the contract formation, the remaining part of the contract shall still be valid. But if it is obviously unconscionable to one party, then the entire contract shall be null and void.

Article 6
The rent of rental housing is mutually agreed upon by the lessor and the lessee, and Article 97 of the Land Act is not applicable.

Article 7
The amount of security deposits shall not surpass the equivalent of two months’ rent.
When leases expire and the lessee return the rental housing and pay back debts arising from leases, the lessors shall return the security deposits after deducting any unpaid debt.

Article 8
The lessor shall be bound to deliver to the lessee the rental building leased in a condition fit for the stipulated residential use. The lessor shall also be liable to keep it up in such a condition as to be fit for such uses during the lease period.
The lessor shall, before signing leases, explain to the lessee the extent to which the lessor is responsible for repairs and provide the lessor’s contact information for when repair is necessary.
When the lessor has agreed to be responsible for repairing a certain part but fails to make such repairs within the appropriate period fixed by the lessee, the lessee can make the repairs and require the lessor to reimburse the expense or deduct the expense from the agreed rent.
The lessee cannot stop the lessor from making necessary repairs to rental housing leased.

Article 9
The lessee cannot sublease the rental housing in whole or in part without prior written consent by the lessor.
The sub-lessor should provide the sub-lessee with the written consent document when signing the sublease and stipulate in the sublease the agreement between the sub-lessor and lessor regarding the lease object, period, and causes of contract termination.
The sub-lessor shall inform the lessor in writing within 30 days of signing subleases.

Article 10
The lessor may terminate the lease before expiry if one of the following conditions holds during the lease period, and the lessee may not demand any compensation:
1. The lessee damages the rental housing or auxiliary facilities and fails to make repair or pay proper compensation.
2. After notification, the total rental or fees in arrears amount to two months’ rent.
3. The lessee subleases the rental housing to another person without the lessor’s prior written consent.
4. The lessor terminates the lease to reconstruct the building.
5. Other statutorily permitted causes for termination of leases before expiry.
A lessor who terminates the lease before expiry according the previous Paragraph should inform the lessee in writing along with related evidence within the following prescription period:
1. Pursuant to the first to third or the fifth Sub-Paragraph of the previous Paragraph, 30 days before termination.
2. Pursuant to the fourth Sub-Paragraph of the previous Paragraph, 3 months before termination.

Article 11
During the lease period, if any of the following scenarios occurs, making continued residence at rental housing difficult, the lessee may terminate the lease before expiry and the lessor may not demand any compensation:
1. Illness and accidents make long-term treatment necessary.
2. Rental housing is ill-fitted for dwelling and needs repair, but the lessor fails to repair within a reasonable period fixed by the lessee.
3. If, in consequence of circumstances for which the lessee is not responsible, the rental housing is partially destroyed and the remaining part is uninhabitable.
4. Third parties exercise their rights on the rental housing, so that the lessee cannot use it pursuant to the lease.
The successor of a deceased lessee may terminate the lease.
The lessee (pursuant to Paragraph 1) or the successor of a lessee (pursuant to the previous Paragraph) should inform the lessor in writing along with related evidence 30 days before termination.

Article 12
When the lease expires, both parties shall jointly inspect the space and fixtures of the rental housing to check for wear, tear and damage. If one party does not join the inspection after the other party has fixed a reasonable period, the inspection is presumed to be completed.
Things remaining at the rental housing after inspection are presumed abandoned by the lessee, after the lessor has fixed a reasonable period and requested that the lessee take them back, unless otherwise stipulated in a contract between the two lease parties. The expense for removing the remaining things incurred by the lessor can be deducted from the security deposit. If the security deposit is insufficient for the reimbursement, the lessor can demand that the lessee pay.

Article 13
The advertisement of rental housing posted by the lessor should match the facts.
Where “operation officers of media” that post rental housing advertisements know or should have known that the advertised area, building age, floor and legal uses do not match the facts, they shall be jointly and severally liable to lessees for their reliance damages. Such liabilities cannot be limited or waived by any agreement in advance.
The information referred to in the previous Paragraph may be verified by sources such as public information provided by the government and (certified) copies of building registration certificates provided by the advertiser.
The advertiser referred to in Paragraphs 1 and 2 that is a rental housing service business should spell out its name.

Article 14
To improve rental housing relationships, the competent authorities may establish rental housing professional service mechanisms, develop rental housing service industries, encourage research in rental housing systems, and provide dispute resolution and consultation.
The competent authorities may assist or reward other agencies, institutions, and rental housing-related associations to carry out the tasks referred to in the previous Paragraph. Detailed regulation regarding whom and how to assist and reward may be stipulated by the competent authority in the central government.
Associations that serve the interests of people of lower social and economic status as defined in the Housing Act should be prioritized when assigning tasks prescribed in the first Paragraph.

Article 15
The competent authorities, in order to protect the rights and interests of the lease parties, may assist in starting non-profit associations of which the lessors or lessees are members. Such non-profit associations should provide professional consultation, educational training or assistance in dispute resolution.
Non-profit associations referred to in the previous Paragraph should actively inquire whether lease parties need language translation and hire interpreters if need be.
The competent authorities may reward non-profit associations for carrying out the tasks referred to in the first Paragraph. Reward rules may be stipulated by the competent authority in the central government.

Article 16
When a rental housing dispute occurs, the lessor and the lessee may apply to the municipal governments or the county (city) governments for mediation without paying a mediation fee.

Article 17
Individual owners of residential units who commission their residential units to the RHMB or lease their housing to the RHSB for subleasing, where the contract covenants residential uses for more than one year, may receive income tax benefits for the rents pursuant to the following conditions:
1. The amount of rental income which does not exceed six thousand NT dollars per residential unit each month is exempt from income tax.
2. In case the amount of rental income exceeds six thousand NT dollars per residential unit each month, if the owner of residential units cannot produce evidence of necessary loss and expenses for tax deduction, income tax on rental income shall be calculated based on the following formula:
(A) 53% of the rental income per residential unit per month between six thousand NT dollars and twenty thousand NT dollars is subject to income tax.
(B) If the rental income per residential unit per month exceeds twenty thousand NT dollars, the tax reduction for the rental income above the threshold should be calculated based on the standards prescribed in the Income Tax Act and related regulations.
Income tax exemption in the preceding Paragraph shall be limited to five years. The Executive Yuan may extend the tax exemption period at most once based on the actual situation six months before the period expires.

Article 18
The municipal governments and the county (city) governments may reduce the land value tax and housing tax on rental housing which fulfills the requirements of the preceding Article.
The self-governance ordinance on the period, scope, standard, and procedures for tax reduction in the preceding Paragraph shall be prescribed by the competent authorities in municipalities and counties (cities), and shall be reported to the Ministry of Finance for future reference.
Tax reduction referred to in the first Paragraph shall be limited to five years. The Executive Yuan may extend the tax reduction period at most once based on the actual situation six months before the period expires.