ST : New en bloc rules passed to protect owners' interests

May 19, 2010

PARLIAMENT

New en bloc rules passed to protect owners' interests

By Jessica Cheam

TIGHTER rules that will give greater clarity to the process for the collective sale of homes were passed by Parliament yesterday.

One major change is that after the first failed attempt at a collective sale, subsequent attempts face more stringent requirements.

For instance, it will be tougher to set up a sales committee for a second try as a higher requisition level of 50 per cent - either by share value or total number of owners - will be needed.

Still, before the Bill to amend the Land Titles (Strata) Act was passed, several MPs argued that it could be improved further.

They suggested that the age and state of a building should be considered when deciding the level of consent required for a sale.

They also wanted a reduction in the requisition level.

Replying, Law Minister K. Shanmugam said the Government's task was to protect the interests of all strata unit owners, regardless of whether they were for or against the sale.

Also, it should not 'micro-manage the process and prescribe too many requirements', he added.

The new law to streamline the collective sale process was unveiled for debate last month.

It includes: a 60-day window for the Strata Titles Board (STB) to mediate in a sale, failing which it cangive the parties the option to seek redress in the High Court; and stricter rules for the members of the sales committee to declare potential conflict of interest.

The law can be expected to take effect next month.

During the hour-long debate, Ms Ellen Lee (Sembawang GRC) asked if such sales had led to more new homes being built in prime areas and older properties being rejuvenated at the 'personal cost to citizens'.

Mr Shanmugam pointed out there were 462 collective sales between 2005 and last year. Of these, half, or 217 properties, had been redeveloped or are being redeveloped. The 217 projects had about 12,000 units, but after redevelopment, the number shot up to more than 26,000 units, he said.

Ms Lee and Nominated MP Paulin Tay Straughan also highlighted a recent National University of Singapore study on the negative impact of collective sales on the elderly. These folk experienced 'social and spatial displacement' after they were forced to move.

Associate Professor Straughan suggested the ministry set up a resource unit, possibly at the STB, 'to mitigate stress and negative consequences of relocation, especially for vulnerable home owners'.

She also called for a booklet to be published for people, setting out clearly key concepts such as owners' share values and minority owners' rights.

Mr Shanmugam said his ministry had been working with the Singapore Institute of Surveyors and Valuers to provide guidelines on the apportionment methods used in the sales process.

He pledged that his ministry would look into 'how we can put out more information'.

The minister also explained why some suggestions, like banning owners from serving on both management corporations and sale committees, were not adopted. Each development, he said, had its own set of unique circumstances and, in some cases, there were not enough owners willing to serve in each committee.

He also rejected the call for scrapping the five-day cooling off period after an owner had signed the collective sale agreement (CSA) as well as the need for owners to sign the CSA in the presence of a lawyer.

Such requirements are necessary because the 'importance of ensuring the integrity of transaction outweighs the administrative issues of having a lawyer present for each owner's signature'.