ST: New, tighter rules for en bloc sales passed - 21 Sep 07
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Dan @ 94 777 977
Sep 20, 2007, 11:46:38 PM9/20/07
to News - En Bloc
Sep 21, 2007
New, tighter rules for en bloc sales passed
Further changes may follow if necessary, Jaya tells MPs who want
more to be done By Fiona Chan, Property Reporter
A SLEW of intensely-debated changes aimed at making the red-hot
collective sales market fairer was passed in Parliament yesterday.
The revisions - keenly watched since they were mooted in March -
will make it harder for residential developments to go en bloc as
they must fulfil more conditions.
And further changes may be in the works if they are necessary, said
Deputy Prime Minister S. Jayakumar, also Law Minister.
He was responding to spirited appeals by several Members of
Parliament yesterday, who peppered him with suggestions on how to
further tighten the rules.
Most felt more could be done to protect the interests of minority
owners and the elderly, who are often strongly opposed to selling en
bloc but find they have no choice.
In response, Prof Jayakumar said that while their suggestions were
not 'without merit', he was also concerned about not 'micromanaging
the process'.
'We have to...strike a balance between trying to make the process
more transparent...while at the same time not making it unduly
unmanageable or too onerous.'
But he added that the ministry is not going to 'close shop and
forget about the process of en bloc sales'.
It will 'monitor very closely' the new laws and make further
amendments if needed.
The changes have already had some effect on the en bloc market, even
before they are due to come into effect next month.
Property players say they have spurred a rush among homeowners to go
en bloc before the new rules make it harder.
But some consultants, like Knight Frank director of research and
consultancy Nicholas Mak, say the changes may not have a large
impact on the market.
'They will add more procedural hurdles, but on the whole, they were
not designed to slow down en bloc sales and they are unlikely to do
so,' he said.
More than 30 amendments were approved yesterday, after extensive
public and industry feedback. They are meant to introduce more
regulation into the market and 'minimise complaints of harassment,
unfairness and lack of transparency', said Prof Jayakumar.
Key revisions include a five-day period for owners to change their
minds after signing the collective sale agreement. Also to come are
new rules on setting up a sale committee and new powers for the
Strata Titles Board, which governs collective sales.
Another major change addresses an imbalance in voting rights in a
mixed development. It adds an extra level of owner consent, by floor
area, before a sale can proceed.
The amendments were beefed up in recent months after 400 suggestions
from the public and discussions with about 40 industry experts.
They follow months of grievances from homeowners over a lack of
clarity in collective sales, which have seen a spectacular record
run in the last two years.
The need for more regulation has also been thrown up by cases such
as that of Horizon Towers, where owners are being sued by the
estate's buyer over a botched collective sale.
Not to be outdone, MPs weighed in with their own proposals
yesterday.
These ranged from not allowing 'young' buildings below 10 years of
age to go en bloc to offering a one-for-one exchange of units in the
new development.
More than one MP also spoke of the non-monetary losses felt by
owners forced to sell en bloc, and condemned 'condo raiders' who buy
units in a development and push for a collective sale.
Nominated MP Kalyani Mehta suggested that only residents who have
stayed in an estate for more than two years can sit on the sale
committee.
Prof Jayakumar took these outpourings in his stride.
A two-year residency condition, he said, would discriminate against
new bona fide homeowners. Replacement units are sometimes offered,
but turned down by sellers for various reasons.
As for those concerned about younger buildings, he offered this
statistic: since 1999, almost 70 per cent of developments that have
been sold en bloc were more than 20 years old.
But he agreed to look into some proposals, such as a best practices
guide and standard forms to help en bloc players.
New, tighter rules for en bloc sales passed
Further changes may follow if necessary, Jaya tells MPs who want
more to be done By Fiona Chan, Property Reporter
A SLEW of intensely-debated changes aimed at making the red-hot
collective sales market fairer was passed in Parliament yesterday.
The revisions - keenly watched since they were mooted in March -
will make it harder for residential developments to go en bloc as
they must fulfil more conditions.
And further changes may be in the works if they are necessary, said
Deputy Prime Minister S. Jayakumar, also Law Minister.
He was responding to spirited appeals by several Members of
Parliament yesterday, who peppered him with suggestions on how to
further tighten the rules.
Most felt more could be done to protect the interests of minority
owners and the elderly, who are often strongly opposed to selling en
bloc but find they have no choice.
In response, Prof Jayakumar said that while their suggestions were
not 'without merit', he was also concerned about not 'micromanaging
the process'.
'We have to...strike a balance between trying to make the process
more transparent...while at the same time not making it unduly
unmanageable or too onerous.'
But he added that the ministry is not going to 'close shop and
forget about the process of en bloc sales'.
It will 'monitor very closely' the new laws and make further
amendments if needed.
The changes have already had some effect on the en bloc market, even
before they are due to come into effect next month.
Property players say they have spurred a rush among homeowners to go
en bloc before the new rules make it harder.
But some consultants, like Knight Frank director of research and
consultancy Nicholas Mak, say the changes may not have a large
impact on the market.
'They will add more procedural hurdles, but on the whole, they were
not designed to slow down en bloc sales and they are unlikely to do
so,' he said.
More than 30 amendments were approved yesterday, after extensive
public and industry feedback. They are meant to introduce more
regulation into the market and 'minimise complaints of harassment,
unfairness and lack of transparency', said Prof Jayakumar.
Key revisions include a five-day period for owners to change their
minds after signing the collective sale agreement. Also to come are
new rules on setting up a sale committee and new powers for the
Strata Titles Board, which governs collective sales.
Another major change addresses an imbalance in voting rights in a
mixed development. It adds an extra level of owner consent, by floor
area, before a sale can proceed.
The amendments were beefed up in recent months after 400 suggestions
from the public and discussions with about 40 industry experts.
They follow months of grievances from homeowners over a lack of
clarity in collective sales, which have seen a spectacular record
run in the last two years.
The need for more regulation has also been thrown up by cases such
as that of Horizon Towers, where owners are being sued by the
estate's buyer over a botched collective sale.
Not to be outdone, MPs weighed in with their own proposals
yesterday.
These ranged from not allowing 'young' buildings below 10 years of
age to go en bloc to offering a one-for-one exchange of units in the
new development.
More than one MP also spoke of the non-monetary losses felt by
owners forced to sell en bloc, and condemned 'condo raiders' who buy
units in a development and push for a collective sale.
Nominated MP Kalyani Mehta suggested that only residents who have
stayed in an estate for more than two years can sit on the sale
committee.
Prof Jayakumar took these outpourings in his stride.
A two-year residency condition, he said, would discriminate against
new bona fide homeowners. Replacement units are sometimes offered,
but turned down by sellers for various reasons.
As for those concerned about younger buildings, he offered this
statistic: since 1999, almost 70 per cent of developments that have
been sold en bloc were more than 20 years old.
But he agreed to look into some proposals, such as a best practices
guide and standard forms to help en bloc players.
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