Ultimately, drawing the line is a judgment call

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