A slew of changes to the rules governing en bloc sales has been proposed to improve transparency and protect owners’ interest. This follows a Law Ministry review of the relevant legislation and consultation with the public and industry players.
The amendments to the Land Titles Strata Act were tabled in Parliament on Monday.
The collective sale of Devonshire Lodge, worth S$37.2 million, is set to go before the Strata Titles Board in the weeks ahead.
Like many other cases, it has not been free from objections.
Some owners were unhappy about its valuation and the performance of the marketing agent handling the deal.
Jeffery Lai, Minority Owner, Devonshire Lodge, says: “Actually the whole team is new and they don’t know what to do about it, how to go about doing the so-called the Collective Sales Agreement, or CSA, and things like that…so it turns out that they’ve never done the DC charge on the units and I think they are very close to the buyers.”
Such complaints will be addressed by the proposed changes to the law.
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Changes to rules on en bloc sales will protect owners' interest
Sales committees will be required to call for a general meeting to discuss issues like the appointment of a lawyer, property consultant and marketing agent.
The measures also seek to improve transparency in the en bloc sales process by providing regular updates on bids received and how sales proceeds will be divided.
Lawyers say these measures may address some issues, but more can be done.
Philip Fong, Partner, Harry Elias Partnership, says: “There are no regulations as to how much information is actually given to the owners, so they know enough to raise questions. So in that sense, what I think would be worthwhile to consider is for the appropriate authority to come up with a code of best practices and if there are deviations from these practices, then they must be justified by the sales committee.”
Owners will also be more involved in deciding who sits on the sales committee.
Under the new ruling, it must be formed by elected home owners at a general meeting of the management corporation.
And they have to declare any vested interests related to the deal.
Industry watchers say they favour regulations that help owners better understand the legal implications of en bloc sales.
These include having a lawyer present to clarify doubts when the owner signs the Collective Sales Agreement, and for key terms and clauses to be listed upfront in the legal document.
Owners who change their minds after signing the deal can also do so but only once and within a 5-day cooling off period.
The Law Ministry says the proposed amendments aim to provide additional safeguards, without making the en bloc sales process unduly onerous. - CNA/ch
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