It appears to be a fairly straightforward fraud case, and normally these come down to the extent to which the seller deceived the buyers and made a profit from it.
From news articles, it would appear that the seller made a hefty short-term profit. When the seller bought the property a month before, the previous owner had specifically inserted the fact of the suicide into the sales contract as being the reason behind the discounted price. The seller then proceeded to hide the information about the suicide from a buyer who then bought at a premium, including a false statement that the deceased tenant had died at the hospital instead of in the home. (Here, I use "premium" as meaning "a price above that which correct information would have resulted in within the market".)
A colleague of mine did take a short look through the court decision, and the key factors for the conviction were:
1) He knew about the previous tenant committing suicide in the apartment from the original owner and his broker, and this fact was written into the sales contract by hand.
2) He told his broker and purchaser that there was no such suicide happening inside the apartment, and this fact was also written into the information of the apartment.
The relatively heavy sentence (1 year 4 months, commuted down to 8 months automatically under the commutation act) was because:
1) He denied any wrongdoing during the trial.
2) He had still not reached any settlement with the purchaser.
Absent the long arm of the law, a person could basically conduct arbitrage of murder and suicide apartments -- buy low from honest, good-faith sellers and then cover over the stains with a fresh coat of paint before selling to unsuspecting suckers. The purchasers would be hard pressed to maintain the apartments' value in subsequent sales. Perhaps it's only Adam Smith's "invisible hand" that's pulling the prices down, right?
Before we stick this as a mere matter of local Taiwanese superstition, though, keep in mind some U.S. states have looked at the issue as well from time to time. Apparently sellers in California need to disclose deaths within the past 3 years, while in New York it is not necessary to disclose poltergeists. But it appears most states have opted for the basic rule (at issue in this Taiwanese case as well) that if somebody asks about some aspect of a property, you're not supposed to lie.
"Power always thinks it has a great soul and vast views beyond the comprehension of the weak; and that it is doing God's service when it is violating all his laws." - John Quincy Adams
Article on enforcement of foreign court and arbitral decisions into Taiwan: http://goo.gl/hGXGG
Article on Cross-Strait intellectual property basics: http://goo.gl/ub4vA