Not collectively speaking

IN HIS Monday Blues column, Today Editor-At-Large Conrad Raj opined that it is “Time to revamp the Strata Titles (ST) Boards” (June 22) .

In fact, it is not merely the composition of the ST Boards, but the present ST rules as well that need to be looked into, and a thorough “revamp” made in the larger interests of subsidiary proprietors (SP), as unit owners in private estates are described.

A report in The Business Times in March 2008 reported that “The Ministry of Law is understood to be planning a review soon (sic) of the revised en bloc legislation, which took effect on Oct 4 (2007)”, with a Ministry of Law spokeswoman on record as saying: “Since the amended Land Titles (Strata) Act came into effect, we have received feedback mainly from affected owners to make the collective sale process even more rigorous by introducing more safeguards”.

That was well over a year ago. All that has happened since is that there have been several legal suits involving collective sales, with some startling decisions. There is no escaping the stark reality that the threat of an en bloc sale will always exist whether the property market is robust or moribund as long as a collective sale will fetch more than scattered sales of individual units.

It is only fair to all who own and live in private estates that the Government makes known speedily whether the changes, once proposed, are likely to be reviewed.

For the huge majority, the purchase of a property is without question the biggest capital investment they make in their lifetime, and typically they spend most of their working lives to pay off for their homes. Seen in this light, and against the Government’s once-avowed objective of promoting self-houseownership, and its natural extension to sinking roots in Singapore, it bucks logic or even a sense of justice that many or even just some of them should be compelled to move out of such homes against their will because of an en bloc sale, even if some capital profit is realised in the process.

There are plenty of areas where the present rules can, and in fact, urgently need to, be changed.
The rate of success of collective sales varies depending on the age of the estate. In public-listed companies, where the individual stakes can be quite minimal and the emotional impact much less in comparison, the rule is that as long as 10 per cent of the capital still remains in the hands of minority shareholders, they cannot be compulsorily bought out.

Legislation should also be introduced that SPs who have an alternative property to which they can move in the event of a successful en bloc sale should be automatically disbarred from voting in favour of such sale, as they are in the privileged position vis-a-vis SPs who own just the property they stay in.

I have heard of some who buy a property with the intention of starting an en bloc sale, in the hope of benefiting from the resultant increased price at which it would most probably be sold.

SPs themselves and/or those who have close relatives in the property business should also similarly be disbarred from participating, as there is bound to be the suspicion of a conflict of interest, or even collusion.

One thing is certain when en bloc sales come into the picture: The harmony of neighbourly living is disrupted, and probably lost for ever, sometimes leading to acrimony and unsocial, even criminal, acts of vandalism as was widely reported in the media. If the changes in rules made in October 2007 have according to the Ministry of Law led to complaints by affected owners, it is probably time to scrap those rules altogether, and leave the purchase and sale process to individuals, and a collective sale to proceed only where there is total unanimity among owners, as is the case in landed property.

A Singaporean’s home should remain his castle, in which he can lock himself securely against en bloc raiders bent on ejecting families for their own purely selfish ends. It is imperative that Govenment moves swiftly towards the changes they intended to make early last year.
Narayana Narayana

Source: Today, 26 June 2009