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Thread: Changes to en bloc rules passed by Parliament

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    Default Changes to en bloc rules passed by Parliament

    http://www.businesstimes.com.sg/sub/...99140,00.html?

    Published May 19, 2010

    Changes to en bloc rules passed by Parliament

    Stricter conditions for owners trying to restart en bloc sales after failing earlier

    By CHUANG PECK MING


    (SINGAPORE) Parliament yesterday passed changes to improve the rules on en bloc sales, but some of the proposals pushed by interested parties were excluded.

    With the green light given to the Land Titles (Strata) (Amendment) Bill, the Strata Titles Board which currently look into en bloc sale can concentrate more on its mediatory role.

    The amended Land Titles (Strata) Act will also impose stricter requirements on owners for restarting en bloc sale attempts, after failing earlier.

    And owners standing for election to a collective sale committee must make more disclosure of their interests - they now must disclose the extent of ownership they have in the strata development and any ownership interests held by 'connected persons'.

    Other changes include:

    # A sale committee has up to one year to prepare its collective sales agreement and to get the first signature for the agreement;

    # A general meeting called for an en bloc sale can't proceed if the meeting quorum is not met within an hour of the designated start time of the meeting;

    # Instead of holding general meetings, simple meetings are to be held to keep owners updated on a collective sale.

    In moving the bill, Law Minister K Shanmugam said the government's approach - the last time it amended the Act was in 2007 - has been to do what it believed was right as between competing interests.

    'Each owner has the right to live undisturbed in his flat and has the right to decide whether to sell or not to sell his flat,' he said. 'At the same time, majority views on whether there should be a sale of the development should be recognised as well. And there is public interest in intensifying developments and rejuvenating older developments.'

    Mr Shanmugam said these different interests need to be balanced. The latest changes seek to achieve that balance better.

    Yesterday's amendments left out several notable suggestions made by interested parties and industry players: barring management corporation members from serving as sale committee members at the same time; removing the 5-day cooling off period after a collective sales agreement is signed; and doing away with the presence of a lawyer when the collective sales agreement is inked.

    Explaining why the government rejected the first suggestion, Mr Shanmugam said en bloc property has 'its own unique set of circumstances'. So decisions on who should be eligible to stand for election to the sale committee are best left to the owners of each development.

    On the need for a lawyer's presence, Mr Shanmugam said the en bloc property might be a very significant asset for the owners - and they need to understand the collective sale agreement to 'avoid arguments as to what was or was not said to them'.

    'The importance of ensuring the integrity of transaction outweighs the administrative issues of having a lawyer present for each owner's signature,' he said.

    The cooling off period is also helpful to ensure the consent an owner gives in signing the collective sale agreement is 'informed, genuine consent', according to Mr Shanmugam.

    'Owners will be contracting to sell their flats in multi-million dollar transactions,' he said. 'In that context, it is appropriate to give them a few days to reflect on their decision after they have signed.'

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    Default New en bloc rules passed to protect owners' interests

    http://www.straitstimes.com/Singapor...ry_528319.html

    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'.

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