PROPERTY LAW, CIVIL CODE AMENDED

03/01/2009

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On 12 January 2009 the Legislative Yuan enacted amendments to the "General Provisions" and "Ownership" chapters of the Civil Code Part III—Rights in Rem, and to related sections of the Enforcement Act of the Rights in Rem Part of the Civil Code.  The main points of the amendments are as follows:

         

	Ÿ	New provisions on customary property rights: New provisions introduce "custom" into the scope of sources of rights in rem.
	Ÿ	Resolution of disputes between neighbors through lawsuit: New provisions stipulate that a landowner who has a need for drainage, utility service lines, or access across adjacent land, in the event that the owner of the adjacent land objects, may resolve such a dispute through bringing a lawsuit to the court.
	Ÿ	Release of collateral after partition of common ownership: In order to legal relationships, and to protect the interests of other co-owners, new provisions stipulate that if the holder of collateral agrees to the method of partition of property held in common, or is a participant in litigation for such partition, the relevant mortgage or pledge will be transferred to only that portion of the partitioned property that is allotted to the mortgagor or pledger.
	Ÿ	Diversification of causes of action, and of methods of partition, for partition of common ownership: Under new provisions, if the co-owners of property held in common have entered into a contract for partition of the property, but the statute of limitations for exercising a claim under the contract has extinguished, and any of the co-owners refuses performance, then any of the co-owners may file a petition with the court for a judgment partitioning the property.  Other new provisions envisage multiple ways in which the court may partition common property; these include distributing the original property among part of the co-owners, and distributing part of the original property among the co-owners while selling the remainder and distributing the proceeds among the co-owners.
	Ÿ	Court's role in management of common property: In order to prevent abuse in situations where majority decision was originally adopted as the method of management of common property, and to protect the interests of all co-owners, new provisions stipulate that if management by majority decision leads to a manifestly unfair outcome, or if due to a change of circumstances such management method cannot be maintained without causing great difficulty, petition may be made to the court to change the management method.
	Ÿ	Express provisions define the portions of condominium property held individually and the portions held in common, the relative proportions thereof, and their inseparable relationship with the underlying land: In order to provide a comprehensive legal framework for property rights, new provisions set out principles for the condominium form of ownership, in which certain portions of a building are the subject of individual ownership.
	Ÿ	Effects on a transferee of the co-owner's share in a joint property with respect to the co-owner's rights and duties arising out of legislation, regulations or contracts: New provisions expressly provide that those rights and duties of co-owners that arise out of legislation or regulations are binding on the transferees of such co-owners; while in order to uphold the security of transactions, those rights and duties arising out of contractual provisions are binding on specific transferees only if such transferees were aware of such rights and duties, or could have been aware of them.
	Ÿ	Other changes include the following:
		1.	Expand the scope of obtaining real property rights before registration: add general provisions to stipulate circumstances (including not only inheritance, compulsory enforcement, eminent domain, and court judgments) where obtaining real-estate property right prior to registration of the transfer must complete such registration before disposing of the real property;
		2.	New provisions stipulate that if a building constructed on a plot of land exceeds the plot's boundaries, the owner of adjacent land that is encroached upon has the right to request that the landowner purchase fragmentary portions of the encroached land that result from the construction, and that the courts have discretionary powers in such cases;
		3.	The maximum duration of a non-partition agreement for real property held in common is increased to 30 years;
		4.	The maximum reward for the finder of lost property is revised to three-tenths of the property's value.  Only a bona fide finder who has made no concealment may claim such a reward;
		5.	New provisions define simplified procedures for the collection of lost property; and
		6.	New provisions in the Enforcement Act provide transitional arrangements for the new Civil Code provision that rights in the common portions and underlying land of a condominium building may not be transferred separately from the associated rights in an individually owned portion, and expressly provide for the retroactive effect of specific Civil Code articles.