May 24, 2007

Cooling the en-bloc frenzy

THE Government is wading none too soon into the en-bloc property sale frenzy. The notification to Parliament by Mr Ho Peng Kee, Senior Minister of State for Law and of Home Affairs, that there is room for 'some tightening' of en bloc sales procedure will be well received. Stakeholders will gain from an orderly process under which every contracting party is apprised of the rules and obligations. First notice of impending changes came in March. This uniquely Singaporean way of extracting premium-plus value from ageing apartments in a rising market comes with the risk of bringing social discord if the procedural framework governing collective sales remains as it is. Although the first en bloc sales made the scene in the last boom, the whole process falls short of being crystal clear. About the only firm principle known widely to home owners being canvassed is that 80 per cent of them must consent for a sale to proceed, if the development is more than 10 years old. Beyond this, the workings of sale committees, the documentation experts they engage and the method of assigning monetary values to individual units have, in more than a few cases, been mired in dispute and doubt. Court challenges started by a number of owners who have felt disadvantaged in a deal, and elderly people who resisted evacuation for reasons which deserve respect, are an indication the process has loose strands.

Not only that: Should not the interests of minority objectors be better protected in law to obviate charges that en bloc sales are more about filthy lucre than abiding values? It will sound odd, but there are individuals who are not seduced by money. The reality, however, is that disputes invariably are over not enough being received. This is a volatile mix of selfish self-interest and no-holds-barred wooing by developers, property consultancies and law firms. The role of realtors and lawyers requires closer scrutiny. Reports also abound of hate campaigns mounted by pro- and anti-sale factions in condominium estates. Must a community descend to this level? Given the clear need to address these issues, the study team evaluating feedback on proposals publicised in March should not take too long to report. En bloc sales are a fact of Singaporean life: part urban renewal, part personal wealth growth, part economic stimulus, part citizen movement. More than a smidgen of public interest is tied to the actions of small groups of people of at most several hundred each time.