Changes to the Land Titles (Strata) Act were passed in Parliament yesterday, providing more clarity to the en bloc sales process. But some Members of Parliament said the amendments may not fully take into consideration the interest of property owners.
Expected to take effect next month, the amendments are intended to provide greater transparency and streamline procedures for collective sales, after the Ministry of Law was asked by industry experts to review regulations last amended in 2007.
During the debate in the House, Nominated MP Mildred Tan argued that sales committee members should be required to hold minimum qualifications, such as a basic understanding of property law, property rights and conveyancing. This is because with the 60-day limit now imposed on the mediation of en bloc applications by the Strata Titles Board – after which the case may go before the High Court – the committee members will need to work at a faster pace.
The new rules also make it tougher for an estate that has failed in a collective sale to be put up for sale again within a two-year period.
Such an attempt would require 50 per cent of the owners’ support; and if that fails, the bar for a subsequent bid is raised to 80 per cent. But once the two years are up, the bar falls back to 25 per cent of owners’ support (or 20 per cent of share value) for another sale attempt.
MP Ellen Lee (Sembawang GRC) was concerned that, in the meantime, the property’s reserve price is locked in in the collective sale agreement and may become “out of sync” with the prevailing market value over the course of the two years.
She suggested making it mandatory that the majority owners reaffirm the price before executing any sale agreement.
MP Hri Kumar Nair (Bishan-Toa Payoh GRC) suggested maintaining the threshold to reconvene an extraordinary general meeting at 50 per cent throughout the two-year restriction period, regardless of the number of tries.
He was concerned about interfering in what was essentially a transaction between private home owners and developers.
“If more than 50 per cent want to explore a sale, we should not stand in their way. Ultimately, if they cannot secure the necessary 80 per cent or 90 per cent consent, the sale will fail,” he said.
On another note, NMP Paulin Tay Straughan pointed out that elderly or disabled homeowners forced to sell their flat face being displaced and risk destroying their social support systems.
She also proposed that an information resource unit be set up to provide advice on en bloc sales to vulnerable homeowners.
Responding, Minister for Law K Shanmugam said his ministry was continuously working with surveyors and the Strata Titles Board to publish more information about en bloc sales.
He also reiterated that the onus was on homeowners to decide what was best for their properties, as each of them was different.
“The Government is guided by the principle that we should not micro-manage the process and prescribe too many requirements as they may not be applicable to every development,” said Mr Shanmugam. “Our task is to prescribe certain minimum standards of conduct and to make sure that the whole process is fair, transparent and refined as we go along.”
Source : Today – 19 May 2010