The Civil Department of the Judicial Yuan issued the Ting-Min-Three-1070031456 Circular of December 10, 2018 (hereinafter, the “Circular”) to interpret the issue of whether a leased land agreed not to be provided for farming or construction purposes is subject to compulsory enforcement if it is not returned upon expiration under Article 13, Paragraph 1, Subparagraph 4 of the Notary Law.
Under Article 13, Paragraph 1, Subparagraph 4 of the Notary Law, if a leased land is agreed not to be used for farming or construction purposes, the notary public may indicate in the notarial certificate that “if the land is not returned upon expiration, it shall be directly subject to compulsory enforcement.” According to this Circular, the purpose of the above article is to limit the usage purposes of the lessee to avoid inconveniences when the land is returned. As for whether a land is used for farming or construction, this should depend on the usage purposes of the leased object and the provisions of the contract.
According to the further explanation of the Circular, Article 15, Subparagraph 6:(4) of the Land Leasing and Pledging Agreement of the XX Freight Service Office of the Freight Service Department of the Taiwan Railways Administration (hereinafter, the “Agreement”) provides: “Building improvements shall not be newly or additionally constructed, modified or repaired and miscellaneous work items or other facilities shall not be built (set up) in the leased object without authorization… If Party B (i.e., the Lessor) newly or additionally constructs or modifies or repairs building improvements or builds (sets up) miscellaneous work items or other facilities without authorization but Party A (i.e., the Lessee) has concluded as a result of its verification that there is no material damage to Party A and public interest, Party B may be allowed to supplement its application for a building permit…” In addition, Subparagraph 8 of the same article provides: “If Party B needs to construct a building or set up a simple facility, it shall, to the extent that the operation safety and aesthetic appearances of the Administration’s stations and sites are not affected, prepare drawings in advance and apply to Party A by attaching relevant written materials. The Construction may engage in the construction …. after Party A’s consent is obtained…” Although the above contractual provisions basically prohibit the lessor from using the leased land for construction purposes, still they do not exclude the possibility of the leasing agency’s subsequent permission of such construction (setup) by the lessee after its verification. If the leased land is agreed to be used for construction purposes, the criteria under Article 13, Paragraph 1, Subparagraph 4 of the Notary Law are not met. Even if a clause that stipulates that the lessee shall be subject to compulsory enforcement if the land is not returned pursuant to the agreement is added, it is still possible that compulsory enforcement cannot be conducted in the future.