Tag Archives: Enbloc

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

MR TAN Keng Ann (‘Review law on en bloc sales’; last Saturday) says he cannot treasure his home because the power to sell his home is vested in 80 per cent of his neighbours. He asks for the collective property sale laws to be changed.

Home owners of strata developments own the right to their individual units, and they share ownership of the common areas and facilities with other owners. While individual owners can decide whether and when to sell their units, they will have to go with the wishes of the vast majority of owners for a collective sale.

Shared ownership of common property means the rights of the individual owner have to be balanced against those of the vast majority of owners. The legislation, which sets a high majority consent level of 80 per cent for developments at least 10 years old and 90 per cent for developments less than 10 years old, seeks to strike such a balance.

Mr Tan’s point is that any one owner should be able to stop the majority owners’ decisions (even if it is 80 to 90 per cent majority). That is not a tenable proposition.

Chong Wan Yieng (Ms)
Head, Corporate Communications
Ministry of Law

Source : Straits Times – 3 Mar 2010