July 23, 2007

En-bloc sales: Raise percentage of willing subsidiary proprietors from 80% to 90%

YOUR article, 'Property charge hike may cool en bloc fever' (ST, July 19), surmises/analyses that 'the buoyant en bloc market could be an immediate casualty' in reaction to the Government's surprise announcement to raise 'development charges' from the previous 50 per cent to 70 per cent.

If the avowed objective of the Government is indeed to defuse such an over-heated market, this move by itself may not be quite enough.

In practically every proposal for an en-bloc sale, there have been small pockets of 'subsidiary proprietors' (SP) who, for whatever personal reasons, have held out against signing the collective agreements, and have had to be legally forced into doing so for the sale to go through.

The present requirement is for 80 per cent approval by share-value, and so if 20 per cent are opposed, the en-bloc sale is blocked.

A senior SPH journalist who was forced into giving up his apartment lamented in an article that he had to move out of his comfort-zone, and many others who have had to be relocated after an en-bloc sale have similarly expressed their unhappiness with their new surroundings.

If the Government is really committed in its attempts, a simple, and viable, suggestion is to raise the percentage of willing SPs to 90 per cent, from the present 80 per cent.

In the stock market, a listed company can continue to retain its listing status as long as there is a 10 per cent of minority shareholders..

There could be said to be an analogy of sorts in the case of en bloc apartment sales.

Narayana Narayana