En bloc rules: Public consultation starts

Published April 2, 2007

En bloc rules: Public consultation starts

One proposal is to allow all owners to apply to STB over compensation row with tenants


By KALPANA RASHIWALA


THE Ministry of Law kicks off a six-week-long public consultation for proposed changes to collective sales legislation from today. Besides four key changes announced by MinLaw early last month, the consultation paper also covers several other areas.

These include submission of a valuation report as at the date of acceptance of the successful bid in the collective sale application to the Strata Titles Board (STB), and allowing all owners (not just minority owners objecting to an en bloc sale) to apply to the STB to settle any compensation disputes with their tenants.

En bloc lawyer S K Phang of Phang & Co welcomed the latter change as 'an important clarification' which means owners who agree in principle with an en bloc sale but who may have issues with their tenants will no longer be forced to object to the collective sale and join the minority camp.

In addition, the following information will no longer need to be included in taking out an advertisement on an en bloc sale application - the names of owners, their addresses, unit numbers and strata lot numbers; as well as names of mortgagees, chargees and other persons with an estate and interest in the lots, flats and land.

'This will also accord a certain degree of privacy to the owners of the units undergoing an en bloc sale process,' MinLaw said.

Agreeing, Dr Phang said another benefit from the change is the savings to owners from being able to place smaller ads.

Another amendment being proposed seeks to extend en bloc sale by majority consent to a class of estates not covered by current legislation. These are estates where strata title certificates have been issued but where the original landowner/developer retained the strata title certificates, and instead gave long leases (of at least 850 years) to those who bought apartments in the estate.

Currently, apartment owners in these estates can only do an en bloc sale by unanimous consent - and with the approval of the original developer, who owns the reversionary interest in the land.

MinLaw is proposing to allow apartment owners in such estates to proceed with an en bloc sale by majority consent. The original developer's consent will not be required as, upon approval of the en bloc sale by STB, he will lose all rights to the land.

It is not known just how many such estates there are, but at least one case - in the Novena area - is said to have surfaced and brought to the attention of the authorities. The proposed change will plug a gap in the legislation and extend en bloc sale by majority consent to such estates.

Another amendment MinLaw is proposing clarifies that the notice on the number and percentage of share value of owners who have signed the collective sale agreement (CSA) should be put up in the last week of every eight-week period, starting from the day the first owner signs the CSA.

The STB will also be empowered to disregard any technical/procedural irregularity if it is satisfied that the irregularity will not prejudice any owner's interest.

MinLaw said that STB has had to dismiss a few applications purely because of technical non-compliance, and when that happens, the majority owners need to start the application process again, including advertising the new application, service of the notice, and so on.

The four major changes announced by MinLaw on March 2 are also included in the consultation paper:


Majority consent (80 or 90 per cent, depending on the age of a development) to be defined based on ownership of units, in addition to share values;


STB to be given power to increase sale proceeds for minority owners with valid objections in appropriate cases, subject to a cap of 0.25 per cent of sale proceeds to be deducted from every unit, or $2,000 per unit, whichever is higher;


STB to be empowered to issue guidelines on the allowable expenditures to be taken into account in evaluating claims of financial loss;


En bloc sale committees to be formed only at extraordinary general meetings convened by management corporations.
The public may view the consultation paper and the proposed legislative amendments on the Ministry of Law's website at www.minlaw.gov.sg or the Govt Consultation Portal - REACH - at www.reach.gov.sg.

Public feedback invited on proposed changes to en-bloc sale legislation

By S. Ramesh, Channel NewsAsia | Posted: 02 April 2007 0316 hrs


SINGAPORE : The Law Ministry's public consultation exercise on proposed changes to en-bloc sale legislation begins on April 2.

During the Budget debate for the Law Ministry, several amendments were proposed to the en-bloc sale legislation.

These had been recommended by a study team set up to review them.

Currently, for developments over 10 years old, a 80 percent majority consent by share value is required for an en-bloc sale to go head

For developments under 10 years, a 90 percent consent is required.

In addition to this, the Ministry is proposing there should be a majority consent based on ownership of units as well.

This addresses the unhappiness of residential unit owners who, despite owning a significant floor area and number of units in a mixed development, have significantly less share value.

The Strata Titles Board could also be given the power to increase the sales proceeds for minority owners with valid objections.

And to ensure transparency, an en-bloc sale committee would have to be formed at an Extraordinary General Meeting.

The public consultation exercise will go on till May 12.

Responses can be forwarded to the Law Ministry via email to [email protected] or to its address at the Treasury at High Street.

The Ministry says the confirmed changes are expected to be implemented by the third quarter of this year. - CNA/de/ir