Chapter III The Public Auction Procedure of an Impartial Third Party
Section 1 An Entrusted Auction
An agreement concerning an entrusted auction should be made in writing, and it should at least indicate the following:
2.The order of priority of the mortgage;
3.The kind of executive title;
4.Expenses in obtaining the executive title;
5.The actual amount of the debt;
6.The target of the entrusted auction;
7.The method of auction;
After being entrusted to handle the auction of real estate, an impartial third party should request the real estate registration agency to make a note under "Other Registration Matters" in the ownership part of the registration book that "the real estate is being auctioned by an impartial third party".
In case an entrusted auction is terminated or something occurs that makes the auction no longer necessary, the impartial third party should advise the real estate registration agency within seven days thereafter to remove the above-mentioned note.
Section 2 Fixing the Floor Price
An impartial third party should set up a Real Estate Auction Floor Price Appraisal Committee, which should comprise more than five members. The Committee would determine the floor price of real estate which has been entrusted for auction, and the floor price so determined would be reported to the Board of Managing Directors or Directors for information.
More than two-thirds of the members of the Floor Price Appraisal Committee mentioned above should be architects, real estate appraisers or those who have actually engaged in real estate appraisal for more than five years, and real estate brokers.
When entrusted to handle the auction of real estate, an impartial third party should appraise the floor prices of land and building separately in accordance with the floor price appraisal regulations approved by the Board of Directors.
Having determined the floor price of real estate following the procedure indicated in the above-mentioned Article, an impartial third party should advise the mortgagor, debtor, and creditor of the floor price, and afford them an opportunity to express their opinions.
Should the mortgagor, debtor or creditor disagree with the floor price, he (or she) should present his (or her) views, together with the relevant proof, to the impartial third party within seven days after being advised of the floor price.
After receiving the above-mentioned views, the Real Estate Auction Floor Price Appraisal Committee should reappraise the floor price based on the proof and opinions received. If the views and proof are considered valid, the Committee should revise the floor price accordingly. However, if they are considered invalid, the floor price becomes final. Those who had expressed the disagreement would be duly informed.
Prior to the appraisal of the floor price of real estate, an impartial third party should make a field visit to the real estate, take pictures, and make an inspection record concerning the utilization of the real estate.
The inspection record mentioned above should indicate the following:
1.in the case of auctioning land: How the land is utilized; if there are working subjects or farm crops, and if so, their owners;
2.the occupier or user of a building: if it is occupied or used by someone other than the mortgagor or debtor; the name of the occupier or user and the reasons thereof.
Section 3 Auction Proclamation
In auctioning real estate, an impartial third person should publicize the following in the internet, proclaim them at the head office or the branch concerned till the auction date, and publish them in a nation-wide newspaper for more than three consecutive days:
1.The location, kind, actual condition, occupying and utilizing situations, and other relevant matters of that real estate;
2.The date, time, place, and method of auction;
3.The floor price of the auction;
4.The deadline for paying the price; if the payment is to be made in installments, the amount of down payment, the number of installments, and the deadline for payments;
5.The qualifications or conditions, if any, of buying the real estate;
6.The place, date and time of perusing the relevant data of the real estate;
7.The amount of deposit to be paid and the means of payment;
8.Should the winning bidder fail to make the full payment before the deadline, how the deposit would be handled.
The mortgagor, debtor, and creditor should also be advised of the above-mentioned contents of the proclamation.
The date of auction should not be less than seven days and more than 14 days after the proclamation.
Section 4 Auction
The auction of real estate can be conducted by bidding or outcry or through the Internet.
Before an auction is made through internet, an impartial third party should prepare the relevant operating regulations and submit them to the Board of Directors and then to the governing body for approval; only thereafter can such auctions be made.
The winning bid should be awarded to a bidder whose bid is the highest and also exceeds the floor price.
In case an auction is carried out through bidding, bidders should put their sealed bidding documents into a tender box installed by an impartial hird party.
The bidding documents mentioned above should indicate the following:
1.The name or title, age, identification document number or unified serial number and address of the bidder;
2.The real estate lot number;
3.The actual bid.
A bid would be considered invalid if it has not been submitted in the manner set out in the above-mentioned Article, the bidder has not paid the full amount of the deposit as required, or the bid is below the floor price.
In case an auction is made through bidding, the person in charge of the auction should open the sealed bids in front of the public after the bid submission has been completed.
If more than one bidder offer the same highest price, bidders will be given another chance to outbid each other. However, if none of them were willing to up their bid, the winner would be determined by drawing lots.
In order to carry out an auction through outcry, an impartial third party should set up a place suitable for such an auction. The setting up of the place and the rules concerning the outcry should be submitted by the impartial third party to the governing body for reference.
The person in charge of the auction as mentioned above should announce every bid loudly three times. If there is no higher bid offered thereafter, he (or she) should indicate that the bid is awarded by clapping a board or through other suitable means.
The winning bid should be considered null and void if the bidder has failed to make the full payment prior to the deadline as set out in the proclamation or has not made the down payment in full under the installment plan.
Should the above-mentioned situation occur, an impartial third party should inquire all bidders whose bids exceeded the floor price whether they would be willing to purchase the real estate based on the original prices they had offered and to make responses within seven days after receiving the inquiry. The bidder who had offered the highest price and is willing to buy wins the bid. The provision set out in Article 21, Paragraph 2 above is also applicable in this case.
An impartial third party should advise the mortgagor, debtor, and creditor the result of the bidding by indicating the following:
1.The winning price;
2.The land appreciation tax to be paid;
3.The auction expenses and the expenses in obtaining the executive title (calculated based on the lawsuit expense certificate issued by the court) to be paid;
4.The amount of money to be paid as calculated based on the principal, interest, and default charge shown in the executive title;
5.The amount to be paid to the mortgagee.
The mortgagor, debtor, or creditor may express his (or her) opinion regarding Paragraph 1, Subparagraphs 4 and 5 mentioned above within seven days after being advised thereof. In case a disagreement is expressed, the impartial third party should make recalculations based on the views and proof received. If these views and proof are considered valid, the amount should be recalculated accordingly. However, if they are considered invalid, the amounts would be final. The one who had expressed the disagreement would be duly advised.
If there is no disagreement, the impartial third party should distribute the money in accordance with the order set out in Paragraph 1, Subparagraphs 2 to 4 mentioned above, so as to clear the mortgage of the creditor. Any residual should be returned to the mortgagor.
Section 5 Reauction
Should any of the following occur in the auction of real estate, an impartial third party could make two more auctions after obtaining the consent of the creditor:
1.No bid has been submitted;
2.Bids have been submitted, but they have been considered invalid;
3.No winning bid has been determined after following the procedure set out in Article 23, Paragraph 2.
In case a reauction is made as indicated above, the floor price could suitably be adjusted downward, and each adjustment should not exceed 20% of the previous floor price.
If the reauctions indicated in the above Article are not successful, an impartial third party should not proceed with any further reauction. However, with the consent of the mortgagor, another reauction could be made.
In case another reauction is made by an impartial third party in accordance with the preceding Paragraph, the floor price could suitably be adjusted downward, and the adjustment should not exceed 20% of the previous floor price.
The date of a reauction should not be less than 15 days and more than 30 days after the previous auction (or reauction).
Section 6 The Registration of Transfer
After a buyer pays the full price in accordance with the auction conditions, an impartial third party should issue an auction award certificate.
The buyer could present the auction award certificate mentioned above to the real estate registration agency and apply for the registration of right transfer and the cancellation of mortgage in accordance with the land registration regulations. The buyer could make the above application without being joined by the mortgagor.
If real estate to be submitted by a mortgagor or debtor is currently occupied by the mortgagor or debtor himself (or herself), the buyer could request the court to remove such occupation through the civil lawsuit procedure. In case a third person occupies the real estate illegally after an inspection record is made in accordance with Article 15 mentioned above and becomes involved in a criminal act, the buyer could report to the local police to handle the matter as a criminal case.