Proposed changes to en bloc rules tabled at Parliament

The government has proposed several changes to provide more clarity to the en bloc sales process.

An amendment bill to the Land Titles (Strata) Act was tabled in Parliament on Monday.

It seeks to address the role of the Strata Titles Board, balance the interest of property owners and streamline the collective sale process.

The changes are expected to take effect in June.

A key revision that’s been tabled will make it more difficult to restart an en bloc sale process after a failed attempt.

A two-year restriction period will be imposed starting from the date when the collective sale fell through.

Owners who want to restart the sale process during the restriction period will have to abide by stricter rules.

The first re-try to convene an Extraordinary General Meeting to reappoint a sale committee will need the backing of at least 50 per cent share value or total number of owners.

For second or subsequent re-tries during the two-year period, 80 per cent will be needed.

Currently, the requisition threshold is set at 20 per cent by share vale or 25 per cent of the total number of owners.

The objective is to discourage numerous attempts at en bloc sales when there is insufficient interest from the owners.

It could also prevent the draw down of management committee funds where EOGMs are convened incessantly.

Another proposed amendment – the Strata Titles Board will be empowered to issue a “stop order” to cease mediation, once it becomes clear that the affected owners want adjudication to be done in Court.

Currently, the Strata Titles Board both mediates and adjudicates on objections filed by minority owners in en bloc sales.
The change could help to reduce the costs and time taken to resolve more contentious en bloc applications.

To prevent undue delays, the maximum time period spent on mediation will be set at 60 days. Presently, no time limit has been set.

Some of the changes will apply to the en bloc sale committees.

Among them, requiring those standing for election to the sale committee to declare the extent of ownership that they or their immediate family have in the development.

The additional disclosure also includes the date of purchase of the relevant strata units.

To ensure that the sales process is not dragged out, the sale committee will have one year to obtain the first signature for the Collective Sale Agreement or it will be automatically dissolved.

The one-year time frame will start from the date the sale committee is formed.

Another proposed change is to allow a non-consenting sale committee member to be voted out by other committee members by a simple majority, when an application for sale has been made to the Strata Titles Board.

The Land Titles (Strata) Act was last amended in 2007.

Source : Channel NewsAsia – 26 Apr 2010

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