EN BLOC PROPERTY SALE COMMITTEES

EN BLOC PROPERTY SALE COMMITTEES:

(Measures to ensure transparency): 2.

Mr Chiam See Tong asked the Deputy Prime Minister and Minister for Law what measures will the Government take to ensure that en bloc property sale committees exercise transparency, act fairly and do not abuse its powers.

The Senior Minister of State for Law (Assoc. Prof. Ho Peng Kee) (for the Deputy Prime Minister and Minister for Law): Sir, all en bloc sales without 100% owners' consent must be approved by the Strata Titles Board. Advance notice of an

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application for en bloc sale must be sent to all owners. An owner who does not agree to the en bloc sale can file an objection with the Board. The Board takes all objections seriously and examines them very carefully. For example, if there is an objection on the method of distribution of the sale proceeds, it will look into how the method of distribution was determined. As another example, if an objection is raised on the sale being by private negotiation, the Board may look into the reasons why it was not done via a tender exercise.

Hence, I would like to assure Mr Chiam that the Strata Titles Board is not a mere rubber stamp which approves an en bloc sale application just because the required 80% or 90% majority has agreed to the sale. Indeed, the Board will dismiss the application if it is satisfied that the transaction was not done in good faith and in an aboveboard manner. Thus, the Board had, on two occasions, dismissed the applications because the procedures set out in the legislation were not complied with.

Sir, we are always reviewing the procedures to see how they can be improved. For example, in 2004, as a result of feedback received, we improved the process by requiring regular updates on the number of owners who had executed the Collective Sales Agreement to be put up in the development in the four languages and also requiring that the CSA be signed by the required majority within 12 months, so that all owners, whether or not they have signed the CSA, will not be kept in suspense for an indefinite period.

Nevertheless, MinLaw believes that there is room for some tightening of the en bloc sale procedures. This is why, during the recent Committee of Supply debate, the Minister for Law announced that a study team reviewing our en bloc sale legislation had made some important

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recommendations, for which MinLaw would put out a paper for public consultation. One of the proposed changes is that the setting up of an en bloc sale committee must be done at a general meeting convened by the management corporation. Not only will this make for better accountability, it will also serve as notice to all owners of a possible en bloc sale initiative being started.

The public consultation closed recently on 12th May. We received quite a lot of feedback. We are now evaluating the feedback received. I expect that many useful points will be incorporated into the final amendment Bill.

Mr Chiam See Tong (Potong Pasir): Sir, the sale committee is perhaps the most important component in the en bloc sale process. It appoints the agent to sell the whole development and it also appoints the solicitors, and I think it has got a duty to appoint the valuers. Therefore, it must be properly appointed. Usually, an en bloc sale involves millions of dollars, and I think their responsibility is very great. So, I hope the Minister will incorporate some statutory measures to make sure that the sale committee is properly appointed.

Assoc. Prof. Ho Peng Kee: Sir, as I have said in my main reply, Mr Chiam will be very pleased to note that this is a key recommendation of the proposed consultation. Proposal No. 3 says that the sale committee must be properly constituted at a general meeting where members will be informed, notice served, and they come and elect the sale committee. Indeed, another suggestion that we are looking at is that the minutes of the sale committee should be posted on the notice board so that all owners, whether majority or minority, will be kept au fait with the discussions.

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Mr Chiam See Tong: Sir, I wonder if the Minister can make it possible for some of the flat owners to exchange one for one; in other words, their old property to exchange for a new one, when the new ones are developed, in the same place. Usually, for the older citizens who stay in a place for a long time, they would like to remain there. But, of course, that is not possible unless they exchange one for one. I think they also do not like the hassle of finding alternative accommodation. I wonder if the Minister can incorporate this provision into the law.

Assoc. Prof. Ho Peng Kee: Sir, this is one area where we should leave it to the owners to decide, because not all owners may want a replacement flat. Different people have different considerations. But I know on the ground that owners who want a replacement, in fact, negotiate with the developers who are buying the property. This has happened in some of the developments. So, let the owners negotiate with the developers and get a deal that suits them.