Stricter conditions for owners trying to restart en bloc sales after failing earlier
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.'
Source: Business Times, 19 May 2010