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On 29 November 2012, the Executive Yuan passed a draft amendment (the "Amendment") to the Urban Renewal Act (the "Act"), which will be presented to and read by the legislature shortly. The Amendment can be summarized as follows:
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1.
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How to disclose information and notify relevant parties is prescribed in the Act to facilitate information sharing and public participation (Articles 5 and 6 of the Amendment).
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2.
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To ensure that the urban renewal summary for an urban renewal project truly represents the will of the property owners, the restrictions imposed on an applicant entitled to submit the summary for the competent authority's approval are increased and the project approval threshold the applicant should reach is thereby raised. Also, the contents that an urban renewal summary must contain to obtain project approval are explicitly stated to allow local competent authorities to conduct a substantive review (Article 20 of the Amendment).
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3.
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To reduce disputes arising from the implementation of an urban renewal project, the approval threshold of an urban renewal project is moderately raised and the restrictions imposed on a property owner to withdraw his/her written consent are revised (Article 36 of the Amendment).
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4.
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To ensure fair and reasonable allocation, property right reallocation should be implemented if the initiator of an urban renewal project who carries out the project through distributing part of the units to property owners fails to obtain all of the property owners' consent. Therefore, Article 25-1 of the Act is deleted to deprive the competent authority of its power of compulsory expropriation.
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5.
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Public lands need not be subject to an urban renewal project if reasonable plans for using the lands are already in place. Also, the government should spearhead the development of public lands of a certain size or above (Article 43 of the Amendment).
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6.
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To protect the interests of pre-sale unit buyers, no sale of any unit under an urban renewal project should be held before all housing in the area subject to property right reallocation are entirely demolished or removed. Penalties may be incurred if such requirement is not observed (Articles 53 and 78 of the Amendment).
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7.
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A mediation session should first be conducted by the competent authority if the initiator of an urban renewal project requests the competent authority to help demolish or remove the land improvements. If the outcome of the mediation is unacceptable to either party, an administrative suit may be filed (Article 55 of the Amendment).
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8.
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When an urban renewal project is carried out by property right reallocation, all the funds required for the project should be held in trust and used for designated purposes by the project initiator or the funder to minimize the project's exposure to risk (Article 61 of the Amendment).
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9.
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To encourage construction firms to initiate urban renewal projects through joint developments with property owners, which requires all of the property owners' consent, the land value increment tax and the deed tax incurred from property transfer owing to joint construction in an area identified by the government as one that requires urban renewal can be reduced (Article 66 of the Amendment).
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10.
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To minimize impact on ongoing urban renewal projects, a transitional provision is added to the Act to have all approved urban renewal projects subject to the regulations effective when the projects were submitted for the competent authorities' approval (i.e., the Amendment shall not apply retroactively) (Article 83 of the Amendment).
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To sum up, if and when the Amendment is passed into law, while the property owners are afforded more protection in terms of housing rights and interests, it would be more difficult for urban renewal project initiators to integrate and push forward with urban renewal projects.
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