En-bloc sales: Review law on sales committees

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December 17, 2008 Wednesday

En-bloc sales: Review law on sales committees


IT APPEARS that economic and recession concerns have not decreased the appetite of some owners keen to push through collective sales of their estates. There are a number of estates, such as mine, that started the sales process but applied the brakes just before collecting signatures for the collective sale agreement.

Collective sale committees know they have exactly a year to collect the requisite number of signatures. Even more important, they are aware that, according to the Third Schedule of the Land Titles (Strata) Act, their tenure as committee members expires the minute the collective sale agreement dissolves (through a lack of sufficient signatures).

Until then, a committee can remain 'tenured' indefinitely. Unless a committee member vacates his office, he can continue to try to persuade owners to agree to the collective sale.

Why are members of a management council required to retire from office annually, but members of a collective sale committee can carry on for years, so long as no collective sale agreement is signed? Likewise, nothing in the Third Schedule explains how new committee members are nominated if there should be a vacancy.

Currently, no extraordinary general meeting is required to elect new members, resulting in cronyism as existing committee members self-elect their friends. Given that committees can now remain active indefinitely, it is possible that, once elected, committee members may leave over time, only to be replaced by others who may not act in the best interests of all owners.

Wong Hwei Ming (Ms)