In Taiwan’s residential rental market, to protect tenant rights and promote fairness and transparency, the government announced the “Mandatory and Prohibited Clauses for Standardized Housing Lease Agreements” in 2017. In 2020, it was renamed “Mandatory and Prohibited Clauses for Standard Residential Lease Agreements.” This regulation specifically targets corporate landlords and carries legal force and obligations.
Corporate landlords are those who rent out properties as a primary source of income and engage in repeated leasing activities—commonly referred to as professional landlords or “landlords by trade.”
If you are a corporate landlord, you must ensure that all mandatory clauses are clearly stated in the lease agreement, and you must not include any prohibited clauses. Otherwise, not only will those contract terms be invalid, but you may also be in violation of the law.
🧙♂️ Further reading: What's the difference between individual and corporate landlords?
What Are Mandatory Clauses?
These are key terms that must be included in a rental contract. Even if the contract does not explicitly state them, these clauses are still considered legally binding parts of the agreement.
What Are Prohibited Clauses?
These are terms that are explicitly forbidden by law. Even if the tenant signs and agrees to such terms, they are automatically invalid and carry no legal effect. In serious cases, including them may even lead to legal liability.
23 Mandatory Clauses Corporate Landlords Must Include
Here are the 23 essential clauses that must appear in the lease agreement, along with brief explanations. Corporate landlords, be sure to check each one carefully:
- Contract Review Period: Tenants must be given at least three days to review the contract.
- Leased Property: Clearly list the address, scope, floor level, and any included facilities.
- Lease Term: The contract must clearly state the start and end dates (excludes short-term leases under 30 days).
- Rent Terms & Payment: Clearly specify the rent amount, payment method (e.g., bank transfer, cash), and due dates.
- Deposit Terms & Return Conditions: The deposit cannot exceed two months’ rent, and return conditions must be stated.
- Shared Expenses: Clarify who is responsible for water, electricity, gas, and maintenance fees.
- Taxes: The landlord must bear property and land taxes and may not pass them on to the tenant.
- Usage Restrictions: Specify whether subleasing is allowed—must be in writing and with landlord’s consent.
- Repairs: The landlord is responsible for basic maintenance to keep the property safe unless otherwise agreed.
- Interior Renovations: Tenants must obtain written approval from the landlord before making changes.
- Landlord’s Obligations: Ensure the rental property is safe, usable, and meets all legal obligations.
- Tenant’s Obligations: Timely rent payment, proper usage, cleanliness, etc.
- Partial Loss of Property: If damage is not the tenant’s fault, they may request a rent reduction proportional to the damage.
- Early Termination: Specify whether and how either party can terminate the lease early.
- Return of Premises: Outline the handover process, cleaning, cost settlement, etc.
- Ownership Transfer: Includes the “Sale Does Not Void Lease” rule—tenant rights are protected even if the property is sold.
- Early Termination by Landlord: Landlords may terminate the lease under legal grounds without paying damages.
- Early Termination by Tenant: If the tenant faces valid reasons making it hard to stay, they may terminate without penalty.
- Handling of Left-Behind Items: The contract should specify how to deal with leftover belongings after move-out.
- Notification Methods: Notifications must be provable—via letter, text message, or email.
- Other Agreements: Such as notarization or applying for compulsory enforcement.
- Contract Attachments: Ads, inventory checklists, etc., are part of the contract.
- Basic Information of Both Parties: Include names, ID numbers (or business registration numbers), addresses, and contact details.
10 Clauses That Are Strictly Prohibited
Even if both parties sign these clauses, they are invalid and may lead to legal consequences. Corporate landlords—take note!
- Waiver of Review Period: Cannot require tenants to waive the three-day review period.
- “Ads for Reference Only” Disclaimer: Rental ads are part of the contract—you cannot claim they’re just for reference.
- Ban on Tax Deductions: Cannot forbid tenants from reporting rental expenses for tax deductions.
- Ban on Household Registration: Tenants have the right to register their household address at the rental property.
- Passing on Taxes: Landlords may not shift their tax burden onto the tenant.
- Waiver of Defect Liability: Landlords may not exempt themselves from responsibility for undisclosed property defects.
- Requiring Return of Lease Contract: Each party must retain a copy—landlords may not demand the tenant’s copy back.
- Phone Notifications Only: Cannot rely solely on phone calls—must include provable forms like written notice, texts, or email.
- Violation of Mandatory/Prohibited Provisions: Any clause violating mandatory laws is invalid.
- Ban on Rent Subsidy Applications: Tenants are legally entitled to apply for government rent subsidies—landlords may not block this.
How Can Landlords Avoid Legal Trouble?
Before giving a lease agreement to a tenant, corporate landlords must ensure all content is complete, clear, and legally compliant. Even if both parties sign an illegal clause, it is still invalid and may become evidence of a violation.
Reminder:
-What must be written should be written clearly.
- What must not be written should never appear!
Just follow the government’s standardized contract template, and you’ll protect yourself while respecting tenant rights. That’s the key to a stable and trustworthy rental relationship!
