Monthly Archives: March 2010

WHILE I empathise with owners of apartments who do not want to sell but are forced to by the majority, any change in the law needs to take into account the following:

Before buying a unit in a private condominium, a buyer should acquaint himself with the prevailing laws on collective sales. If a buyer is not keen to be subject to a collective sale later, there is the HDB option, as well as landed property.

Many landed properties are cheaper than a condo, although the location may be farther from town.

One must abide by the principles of communal living and ownership if one decides to live in a condo. There is personal choice involved, and we need to consider the collective desires of a group of people.

As much as one could argue that one is entitled to peace of mind, it is also the right of others to buy with a ready willingness to move, or sell, if that makes financial sense for them.

The 80 per cent consent level required for developments at least 10 years old gives due consideration to the majority of owners. While one may argue for a higher percentage, others could equally argue for a lower percentage.

Owning 50 per cent of shares is the benchmark for a majority in a private company. Granted, majority voting power in a company and having a say about one’s home do not carry equal weight in the scheme of life. But that is why an 80 per cent majority is required for a collective sale after factoring in a reluctant home owner’s rights.

Kevin Kwek

Source : Straits Times – 3 Mar 2010

COLLECTIVE property sales require a delicate balance between residents who want to keep their home and those seeking to monetise their property.

Such a situation is perhaps unavoidable because of the strata-titled nature of the land involved.

However, the law on collective sales should favour home owners who desire not to sell because residents who want to sell their property have the alternative of doing so individually, albeit at a possibly lower price.

Residents who want to keep their home do not have an equivalent alternative.

Second, owners generally should have the right to reject an offer if one follows the accepted principle of willing buyer, willing seller.

In principle, all owners of a piece of strata-titled land should agree before a collective sale is completed.

Thus, the law should show greater protection towards residents who seek to maintain ownership.

However, this arrangement may allow a small group or even a single owner to overrule the collective discretion and well-being of other owners.

Requiring total acceptance is unjust as well.

The fine balance between the two groups could come from requiring a higher majority for a collective sale.

This helps to favour and protect owners unwilling to sell while allowing the monetisation of assets in situations where there is a large majority. The balanced approach is similar to ‘majority rule, minority rights’.

While the optimum percentage to enable a collective sale is ultimately a judgment call, the current status quo of 80 per cent is reasonable.

The authorities could re-examine this proportion, especially if significant new developments arise.

Loke Hon Yiong

Source : Straits Times – 2 Mar 2010