Not all winners in En bloc sales

Recently, the condominium I live in was sold en bloc and an extraordinary general meeting (EGM) was held. Several points came up during the meeting:

• The CSA (Collective Sales Agreement), a huge legal document, did not need to be explained to the owners before they were asked to put their signature to the agreement. The owners were expected to know and understand the CSA beforehand as it was posted to them. However, many owners are not conversant with legalese or the English language, and therefore did not know what they were signing, except that it was related to an en bloc sale.

• The CSA allows the sales committee to vary the terms and conditions of the agreement without consulting the owners, even on substantive issues like the sinking fund.

• The CSA is valid for one year and the owners cannot ask for a change in terms, even if the property market grows to the point where the reserve price set is no longer representative of its current value.

• The sinking fund is used to top up the purchase price, although the original terms require the buyer to return the sinking fund to the owners.

• The decision of the sales committee was made on the night of the day the tender was opened, and without any of the members of the Sales Committee present.

• Owners of units that command a purchase price higher than the en bloc sale price were told that they would be compensated for the higher purchase price, and that they should sign the CSA without appealing to the Strata Board.

• The EGM was held not to vote but to just inform the owners of the sale and to answer questions about it, although the agenda stated that the meeting was held to consider the collective sale.

All of the above was supposed to be allowable under the Strata Board Act. I am no lawyer, but they do not seem right to me.

There is no protection for owners who want to sell, but only on terms and conditions that are different from the CSA’s. Yet, they cannot do anything now as, at time of signing, they were not informed what the terms and conditions were; the terms cannot be changed thereafter.

The assumption was that if the agreement had been posted to them, they should know its details.

Even those who read and understood the CSA’s terms and conditions have no protection as it can be changed without the owners’ consent.

It is like signing a blank cheque.

Most owners are not conversant with legal matters and hence unable to protect themselves. The Act should offer protection to owners — people who have worked hard to be able to afford a home.

Owners should be informed of the terms and conditions of the CSA before they are asked to sign it.

The agreement must not be structured such that it offers no protection to owners. Changes in the terms and conditions of substantive issues must be consented to at a sellers’ meeting, to be called within a reasonable time, and approved by majority vote.

Owners who want to withdraw from the collective sale due to changes in circumstances must be able to do so.

And any separate arrangements with individual owners regarding additional payment or other material issues must be made known to and approved by each and every owner.
Our sales committee — which had not been elected — numbered six, with three of them not living in the condo. They are supposed to represent 185 homeowners. Considering the low representation ratio of 1 to 31, it is only reasonable that the decision on the sales price be done when every member is present.

We buy a house and make it our home. It is our attachment to Singapore. We must not get to a stage where homeowners are not given reasonable protection. The en bloc system is good if it is implemented correctly. Otherwise, it could lead to abuse and create resentment.

We cannot have a situation in Singapore where people are unfairly chased out of their homes through the manipulation of the system by cunning property agents and lawyers.

This article was contributed by a reader.
Ngoei Boon Liong

Source: Today, 18 April 2007

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