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SINGAPORE: The government is making more changes to the rules on the collective sale of properties, in a Bill tabled in Parliament on Monday. The proposed amendments to the Land Titles (Strata) Act aim to streamline the en bloc sales process.
They're also expected to give the process greater clarity, save time and balance the interests of owners.
When Horizon Towers condominium was put up for an en-bloc sale in 2007, it sparked a two-year legal saga.
It ended when the Court of Appeal ruled in favour of the owners who objected to the S$500 million deal.
The proposed changes to the law are expected to prevent owners from being caught in a similar long-drawn process.
The role of the Strata Titles Board will be refined to focus on mediation.
It will be empowered to issue a "stop order" to cease mediation if the owners are keen to bring the case to Court.
Currently, the Strata Titles Board mediates and adjudicates on objections filed by minority owners in en bloc sales.
The change could help to reduce the costs and time taken to resolve more contentious en bloc applications.
To prevent undue delays, the maximum time period spent on mediation will be set at 60 days. Presently, no time limit has been set.
A two-year restriction period will be also imposed after an attempt has failed.
To discourage further attempts when there is insufficient interest, those who wish to restart the sales process during the restriction period will also have to abide by stricter rules.
This measure could also prevent the draw down of management committee funds where EOGMs are convened incessantly.
The first re-try to convene an Extraordinary General Meeting to reappoint a sale committee will need to meet a requisition threshold of 50 per cent by share value or total number of owners.
This threshold will be moved to 80 per cent for subsequent efforts to convene an EOGM during the two-year period.
Currently, the requisition threshold is set at 20 per cent by share value or 25 per cent of the total number of owners.
Some feel the restriction will prevent owners from taking advantage of the process when market sentiments are good.
But others feel the changes can help them find a resolution faster.
Philip Fong, managing partner, Harry Elias Partnership, said: “I think it is going to help, in a sense, the process, because before any en-bloc process starts, the people in favour got to think carefully, plan the process and minimise costs.
“And if there is going to be a dispute, then it can be moved to the court procedure or the court process is quicker, compared to the present situation where it has to go through the Strata Titles Board. And if that cannot be resolved, it goes to the court anyway. So I think in this sense, it can expedite the matter.”
Mr Fong said it could also mean more cases ending up in court.
He said: "I think there is the likelihood that dissenting owners will opt to go to court and this means more cases will go to court. But there is a plus side to this because the court process is obviously quicker in that sense of dealing with such matters where the judge is certainly in a better position to access evidence, discovery process of documentation, issues that are legal.
"And the adjudicator in this case is definitely better trained with business of this nature."
To expedite the collective sale process even further, a non-consenting sales committee member can be voted by a simple majority should an application for sale has been made to the Strata Titles Board. This means after the required 80-90 per cent approval has been achieved.
And this is a concern for the sales committee of The Meyer Place, which is set to go the en-bloc way for a second time.
Lim Chong Seng, chairman, Sales Committee, The Meyer Place, said: "To vote someone out from the sales committee, I think you need to be very careful because it can create more conflicts.
“Because if they are volunteers, one of the bigger problems in en-bloc sales is that sometimes you can create bad relations with neighbours. This is one thing that we are very concerned about.”
Others feel the presence of a non-consenting member in the sales committee is important as a check and balance.
Mr Fong added: "I think it is better not to have the power to vote out a dissenting member because having someone there actually gives a check and balance to the whole process so that there can be no dispute as to what actually took place during sales committee meetings."
Even so, to ensure greater transparency, a person wanting to be in the sales committees must also declare the extent of his ownership including those connected to him and the date of purchase of the units.
The sales committee will also have one year to obtain the first signature for a collective sale agreement, or it will be automatically dissolved.
The one-year time frame will start from the date the sales committee is formed.
Currently, the law only provides for dissolution of the sales committee at the Extraordinary General Meeting by simple majority or when the collective sale agreement expires. These rules will remain.
The changes are expected to take effect in June.
The Land Titles (Strata) Act was last amended in 2007. - CNA/vm
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