LAND TITLES (STRATA) (AMENDMENT) BILL (As reported from Select Committee)

Order for Third Reading read. 2.00 pm

The Minister for Law (Prof. S. Jayakumar): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Third time."

As Members know, this Bill was referred to a Select Committee. The Report of the Select Committee was presented to the House on 19th April 1999.

The Select Committee received 46 representations which reflected a good cross section of views. They were from 39 individuals, one management corporation, two en bloc sale committees and four organisations. The four organisations were the Association of Property and Facility Managers, the School of Building and Real Estate of the National University of Singapore, the Law Society of Singapore, and the Singapore Institute of Surveyors and Valuers.

The Select Committee, however, did not limit itself to the views put forth by the representors but also considered views expressed in this House during the Second Reading debate. The Select Committee has accepted several useful suggestions and incorporated them in the amended Bill which is before the House.

The full explanations for the various amendments are set out in the Select Committee's Report. Therefore, I do not intend to repeat all that is extensively set out in the Report which Members would have read.

What I propose to do is to highlight only some of the changes made by the Select Committee as well as some of the issues considered by the Committee.

Firstly, the issue as to whether to vary the 90% / 80% majority share value consent level. The Committee heard diverse and sometimes diametrically opposing views on this issue. Some felt that 90% / 80% consent level should be made stricter. Others were in favour of a more liberal, lower level consent requirement, especially for older buildings.

The Select Committee has decided to keep the present approach in the Bill, ie, the 90% consent level for developments less than 10 years and 80% for developments 10 years or older. Ultimately, it should be left to market forces and conditions which will determine if an en-bloc sale is economically viable. The 90% / 80% level linked to the 10 years age of the development was considered a reasonable criterion. The consent level should be pegged to the age of the development as it is more likely that older developments will be sub-optimally utilised and have higher repair bills.

The second issue concerns developments with 10 or fewer units. The Bill originally had excluded developments with 10 or fewer units. It was thought that it may not be possible in some of these cases to designate a clear 90% / 80% majority because of the small number of units in these developments, eg, in a development with four units of equal shares, three out of the four owners would account for only 75% of the share values.

One representor proposed that the Minister or the Strata Titles Board be empowered to decide on a case by case basis if a development could qualify for en-bloc sale. Others suggested lowering the consent level to 70% or allowing a sale if there were not more than one or two objecting unit owners of such developments.

The Select Committee has decided to make a change so that the majority owners of developments with 10 or fewer units should also be able to apply to the Board provided they can meet the specified consent level of 90% / 80%. However, the Committee did not think that this consent level should be lowered as it would not be fair to the minority owners of such developments.

Many of these developments which have 10 or fewer units are old or have large areas which are under-utilised, thus rendering them suitable for redevelopment. In fact, as at September 1998, developments with 10 or fewer units account for nearly half of all strata developments in Singapore. Of the 2,272 strata developments which are freehold or close to 999 years, 47% are developments with 10 or fewer units. These developments account for 7% of the total number of units and about 80 hectares (10%) of the land area. Requiring unanimous decision will frustrate en-bloc redevelopment of these developments.

Another issue concerns whether it should be the High Court or the Strata Titles Board which should hear objections, and whether the approach and guidelines in the Bill for en bloc sale should be made clearer as well as expressly stated in the provisions of the Bill.

A number of MPs during the Second Reading debate as well as some representors during the Select Committee hearings felt that the High Court and not the Strata Titles Board should hear en-bloc cases. In the Select Committee hearings it became clear that some representors had taken this view because they felt that the general guidelines in the Bill were too broad or gave insufficient guidance on how the Board will decide on the objections of the minority. Some representors also felt that even if no objections are raised, the Board should in any case review the application to see if it should be approved.

The Committee felt that the Strata Titles Board and not the Courts would be the appropriate body to hear objections because the objections would almost invariably be non-legal issues which lend themselves more to mediation or counselling rather than to adjudication.

But the Committee agreed with the view expressed on the need for greater clarity of the approach of the Board in dealing with objections. The Select Committee also agreed with representors on the need to spell out in greater detail the factors which the Board will take into account. Accordingly, several important changes have been made:

Firstly, even where there is no objection, the Board must review every application to the Board for en bloc sale and satisfy itself that the transaction is in good faith and at arm's length, taking into account the sale proceeds, the method of distributing the sale proceeds and the relationship of the purchaser to any of the unit owners. The Board must also ensure that the sale and purchase agreement does not compel a minority owner to be part of a joint venture agreement with the developer of the land. This will address concerns expressed on the safeguarding of the interests of the minority owners;

Secondly, where objections have been raised, the Board will, where relevant, mediate. Where mediation on objections of a personal or non-pecuniary nature fails, the Board cannot stop the sale from proceeding unless the Board is satisfied, for example, that the minority owner will suffer a loss, that is, the purchase price which he will receive is less than the price he paid for his unit, including all allowable deductions; the purchase price also which a minority owner receives is not sufficient for him to discharge a mortgage or charge on his unit; the Board can also refuse if the minority owner is forced to be part of a joint venture agreement with the purchaser/developer; or if the Board is satisfied that the sale is not in good faith or at arm's length taking into account the sale proceeds, method of distributing the sale proceeds and the relationship of the purchaser to any of the unit owners.

In deciding on a case, the Board will not impose its own terms and conditions on the parties. If the Board feels that the price is too low or the method of distribution of the sale proceeds is not equitable, it will order that the sale not proceed. The majority owners must then address the issue.

Sir, let me add that when the revised approach of the Board as I have outlined just now was clarified to the representors who spoke on this issue, most of them agreed that the Board, rather than the court, would be the more appropriate body to mediate and hear en bloc cases. One representor felt that the Board would then be performing a function which was more administrative than judicial.

Another issue was the setting out in greater detail the procedure for service of notice on all the owners of units and other interested parties.

The Select Committee has accepted the representors' views that the procedure for giving notice to the owners and other interested parties should be made much clearer, as well as be included in the Bill itself. As a result, many changes have been made, including the following:

(a) the requirement that there should be convened at least one general meeting to discuss the en bloc sale before the majority owners can apply to the Board;

(b) advertisement in all the four language newspapers;

(c) service of notice of the sale to all the owners, the mortgagees and chargees and the management corporation by registered post and by leaving a copy under the main door of every unit;

(d) affixing a copy of the notice to the door or gate of a minority owner;

(e) affixing a copy of the notice to a conspicuous part of each building in the development; and

(f) filing a copy of the application to the Board with the Registrar of Titles and Deeds for notification on the land register.

Another issue concerns the role of the Board with regard to matters of compensation payable to the lessee of a minority owner's unit.

A number of representors felt that the Board should decide on the compensation payable to the lessee of a minority owner in order to expedite and facilitate an en bloc sale. The minority owner may be unable to agree with his lessee on the latter's compensation. The Committee agreed that the Board can determine the amount of compensation payable to the lessee of a minority owner on the latter's request. The Board, however, will not decide on the compensation payable to the lessees of the majority owners, as the majority owners must make their own arrangements with their lessees before they commit to the en bloc sale.

One representor suggested that the Bill should stipulate the maximum amount of compensation payable to obviate cases where lessees demand an unreasonable compensation. The Committee felt that it is difficult now to decide on the maximum compensation. This is a matter on which the Board could formulate some guidelines when this issue first arises.

Then there is a question on the composition of the Board to enable it to deal with en-bloc sale cases. A number of MPs and representors felt that the Board should have more panel members drawn from a wider range of relevant occupation groups so that it can effectively perform its enlarged functions. Sir, the Select Committee has amended the Bill in several ways:

(a) to increase the number of members on the Board's panel from a proposed 24 to a maximum of 30;

(b) to appoint up to three Deputy Presidents instead of the proposed two Deputy Presidents; and

(c) to give the President of the Board power, where necessary, to appoint four instead of two panel members to form a Board of five or three persons headed by the President or a Deputy President.

In closing, Sir, let me say that the Select Committee certainly benefited from the suggestions and views given by the representors, some of whom were experts in their respective fields. I believe that the changes which are now incorporated in the Bill will improve the legislation and help it achieve its objectives more effectively.

Sir, I beg to move.

Question proposed.

Mr Chiam See Tong (Potong Pasir): Mr Speaker, Sir, the right of ownership of land in Singapore is no longer sacrosanct. First, we have the Land Acquisition Act which allows the Government to compulsorily acquire land for general development which, amongst other things, could mean that the Government can take your land and plant a few roadside trees on it.

Now we have the amendment to the Land Titles (Strata) Act where under the law, the majority of subsidiary proprietors can vote to sell the whole development. It would appear that there is no longer any permanency of residence in Singapore. I wonder how this kind of situation squares up with the call by the Government to make Singapore a better home. To me, a home is a place where you can live in comfort for as long as you like, and not to be tossed out against your wishes.

Sir, having spoken my feelings in regard to the amendments in the Bill, I would like now to make some comments on it.

I have read the Bill and agree that the minority subsidiary proprietors' interest must be protected. There should be no conflict of interest and of collusion in the en bloc sale. I think section 84A(1) is fair. I agree that there must be a majority of 90% or 80% share value consent level before an en bloc sale can be carried out for a building less than 10 years old and more than 10 years old respectively. I hope the Government shall stick to this majority of share values and not lower the percentages to allow en-bloc sale. It is right that the Strata Titles Board should not take an interventionist role. In this respect, I note that the issue of distribution of the proceeds of sale is still largely unresolved.

Section 84A(1) requires that there must be an in-principle sale and purchase agreement which specifies the proposed method of distribution of the sale proceeds. I would like now to propose that the compensation prices for each unit must be determined by taking the average price of two valuation prices of recognised valuers. Anyway, I note that when there is a dispute, the provisions in the Bill require the parties to mediate and the Board has powers to call for a valuation report. In the courts where there are disputes concerning the division of proceeds of sale of properties, for example, in divorce cases, valuation reports are inevitably called for. Presently, I believe that the suggested way for the division of proceeds of sale is by the quantum of share values. In my view, that form of distribution of proceeds of sale by share values is not satisfactory. The share value pegged to a unit or flat is tied to the land which the block or blocks of flats or shops are built. Theoretically, should the building be destroyed, each of the subsidiary proprietors would still own a portion of the land proportionate to his share value. The share value of each flat or unit is not directly linked to the market value of the flat. Each subsidiary proprietor should be compensated based upon the open value of his property. The worth of a residential unit compared to a similar size flat, in my view, should be on the open market sale and amongst the factors by which it is determined, ie, its position, the view it commands, whether it is sited in a sunset position, and so forth. As for a commercial unit of a similar size, its commercial worth depends largely on where it is sited in the building. A shop that is placed at the road front is certainly worth more than one which is tucked away in a fine corner of a building.

Since the amendment already gives power to the Board to call for a valuation report under section 84A(4), why not make it mandatory for the parties to decide on the mode of distribution and incorporate it into the in-principle sale and purchase agreement? The mode of distribution can be based on the average price of two valuation reports aforesaid. This will stop any dispute right from the start on the issue of distribution, thus saving cost and time. I hope the Minister would consider this proposal.

It was pointed out to me that under the Fourth Schedule, subsidiary proprietors can only take a vote for en-bloc sale in an extraordinary meeting. Would the Minister consider amending clause 1(a) in the Fourth Schedule to include Annual General Meeting. If that amendment is made, the first line of that clause 1(a) would then read, "consider the collective sale at an annual general meeting or extraordinary meeting held in accordance with the Act". I hope the Minister has no objection to this proposal because sometimes it is difficult to convene an EOGM.

Mr Shriniwas Rai: Mr Speaker, Sir, thank you for giving me this opportunity. Sir, may I declare my interest. I am a member of the Strata Titles Board.

Sir, the Select Committee received 46 representations. The Minister has given the breakdown. They were very useful representations and I am glad that the Government has sent this Bill to a Select Committee. The public input has improved and the Committee has agreed to many changes which the Minister has dealt with. These changes are to be welcomed.

Sir, my only concern is that all the 46 representors who wrote to the Select Committee were in the English Language. I think a message could be sent to the public at large that, despite the advertisements in the newspapers, representations have not been made in any of the four languages. It would be useful for non-English educated Singaporeans to give their input. I am glad that the Minister has agreed to go beyond the practice of the High Court where the advertisement only appears in two languages. We have advertisements in four languages. I welcome this.

Sir, I have a proposal for the Minister. The Board members are going to be increased from 24 to 30. Since we are going to deal largely with the value of the property, may I urge the Minister to consider appointing more valuers and some community leaders to this panel. I am also glad that from two, we are going to have four and effectively, we either have three or five members. The discretion lies with the President or Deputy President. This is most welcomed.

My learned friend, Mr Chiam, spoke about the sanctity of land. I beg to differ. My philosophy has been that, had we stuck to the old English concept, Singapore could never have made progress. We are a country of limited land size. But, nevertheless, we must see that our laws are framed in such a way that the individual rights are protected when a property is acquired. In this particular case, no property is going to be acquired. The owners themselves are going to agree or disagree whether they are going to have the proposed development.

Sir, the other important factor which the House is aware is the mediatory role of the Board. I can assure the House that, since I joined the Board, I have seen more often than not the cases are resolved through mediation. And I am glad that the Select Committee has decided to have the Strata Titles Board instead of the High Court. It would be cheaper and it would also not strain the resources of the High Court.

Mr Speaker, Sir, the Bill has also specified the role of the Board. Hence, it would be easier for the Board to follow certain guidelines that have been laid. The Board will of course have to see the value of the property. The Board will also see that the sale is at arm's length. It is fair and equitable as it is specified in paragraph 47 of the Report by the Select Committee. The Board will review a case "(regardless of whether there is an objection) to see whether on the face of the application it is satisfied that the transaction is in good faith and at arm's length, after taking into account the sale proceeds, method of distributing the sale proceeds and the relationship of purchaser to any of the owners." This is a very important safeguard which the Bill has introduced.

Sir, I would urge the Minister to consider, when appointing the members, as I have said earlier, that there is a broader representation so that public confidence would always be maintained.

Mr Simon Tay: Sir, I spoke on the Bill at the Second Reading and expressed concerns in four areas. First, the question of public interest as opposed to private profit. Second, the different balance between private property and the idea of communal property or communal living, which is a phrase used by the Minister of State in the Second Reading. Third, the safeguards in the Bill, as it was then. Fourth, it leaves these safeguards to the Strata Titles Board, rather than the court.

I would not repeat these points I have made previously. I shall attempt to look at the recommendations of the Select Committee. Some of the concerns that I have expressed and other MPs have expressed have been addressed by the Select Committee. They have gone through a lot of work and I think they have put in more safeguards. This should be acknowledged and people should feel slightly more assured.

But still, Sir, I think there are some concerns to be raised. In raising these concerns, I am particularly conscious of the fact that at the same sitting when we are debating this Bill, we will also debate the Singapore 21 Report and the motion that this House endorses the vision of Singapore 21 as the basis for strengthening the heartware of Singapore. I mention this because Singapore 21 asks us to consider the heartware of Singapore and, as part of the heartware, to make Singapore our home, our best home. Singapore 21 also asks us to consider that every Singaporean matters. We will of course have occasion to discuss the Singapore 21 Report and the motion in full later. But it is evident to me at least that some of these ideas may be in tension with some of the ideas in the present Bill.

First, Sir, let me clarify that I recognise the difference between public good and the importance that public good must be placed over private good. But I want to distinguish the public good from the present Bill. Public good, Sir, that people understand, and I think the Member for Potong Pasir, Mr Chiam, alluded to, is highways, infrastructure, public facilities for the whole populace. Public good is also having Singapore with no slums. But, Sir, while the Bill may indirectly give a higher density and utilisation of land, the primary driving factor behind this Bill will not be public good in the sense I have defined it, but rather, private profit. And that is the essential starting point in recognising the difference between the Land Acquisition Act, which Mr Chiam referred to, and the present Bill. Under the Land Acquisition Act, I think most Singaporeans accept that if a house has to be taken from them, or part of a garden has to be taken from them for public good, they will accept. This Bill, however, is different.

The first idea is Singapore as home. Sir, I have to ask: does it strengthen the idea of Singapore as home if we can point not to the city skyline as a whole or to the Padang in the heart of city, but to our own individual home? Does it strengthen our commitment to Singapore when we can do that? I believe it does. Consequently, Sir, I must also ask: does it weaken the idea of Singapore as home if, as this Bill allows, other people can force us to sell our homes against our choice? Sir, I am particularly disturbed by paragraph 17 of the Report by the Select Committee. Perhaps, the Committee was concerned more about legal rules and the definition of the work, as much of the Committee's Report makes it clear that they were not aimed at dealing with the major principles of the Bill, rather the greater details. But paragraph 17 says that it does not recognise the difference between owner-occupiers and those who hold property as investment. That is to say, it refuses to see the difference between people who see their houses as homes and people who see their houses as cash earning profit or holding its value.

If we take the idea of Singapore as home seriously, I think that while legal matters must of course be legal matters, we must increasingly take these non-legal, non-economic but very real issues into consideration. And I would urge that this House considers this when we think about the impact of this Bill. The other element I mentioned of - that Singapore 21 may be in tension with the present Bill - is the idea that every Singaporean matters. Normally the majority should prevail but an individual or a minority must have certain rights or place under the sun which cannot be taken from them by the majority. Is private property one of these rights?

At this point, I must clarify that condominium living is not communal living. As pointed out in the Report very carefully, one part of condominium living is communal, one part is common property, ie, the share value that accumulates to the condominium in terms of the carpark, the facilities, the common areas. But another part is completely private, and this is the actual delineated airspace or ground space that belongs to that one owner, that is, the person's home. No one can come through the door unless that person says, "Yes, you can come in." This is not, in that sense, like communal property. This is private property and when we change this law, we change the meaning of private property.

Much has been made of the so-called oppression of the minority, both in the Report and in the Second Reading. I agree with this. No single person or small number should frustrate a basically good deal for no good reasons. However, I would caution that this should not be overstated. No one is stopped from selling his house under the existing law. The right to buy, sell and alienate is preserved. What is stopped by the present law is that one cannot do an en-bloc sale. I can sell my house, but I cannot sell my house in conjunction with everyone else, including those who did not wish to sell.

We are moving then to a different balance. This must be recognised. And I am not saying this balance is necessarily wrong, though I think it is. Others may disagree, but the Select Committee has done a good job in bringing together people who disagree with the Bill as well as agree. I am not the person to tell the whole of Singapore what the balance should be. But I wish that, with the passage of this Bill, people do see that we are moving to a different balance and that brings me to the question of safeguards.

The Report installs profit as the safeguard and the Strata Titles Board (STB) as the guardian. This is a step forward. In the original Bill, there was no question of this. Now, we have the safeguard that where there is no profit or only an actual loss, then the deal will not go through. Bur we have to ask ourselves: is this still sufficient? What if there is only a marginal profit? Among the papers that were submitted to the Select Committee, some spoke of very high profits, 30%-50%. But it is possible since prices have come off, that people might make 5% or 1% if they had bought at the top of the market. What of them, as compared to the neighbours who have made much more? Will there be equity in this sense between those who have bought at different prices? Is there even transparency when I purchase a house, to know how much my neighbour has paid for it?

Secondly, the non-monetary but real factors must be borne in mind - location, closest to family, cost of moving, condition of the house, whether you have paid a lot of money for renovation. All these, as far as I understand from the Report of the Select Committee, are still not taken into account. Let me then paint a concrete but hypothetical picture and ask the Minister for clarification. If I see a widow in her 60s or 70s living now alone in a flat, it is a familiar neighbourhood, near her family, the sale may proceed but it gives her only a small profit, can the existing safeguards save this widow from the inconvenience of having to move at an old age? Can the guardian, the Strata Titles Board, save this widow from her situation? I would like the Minister to explain this to us. As far as I see it, it cannot.

Secondly, the safeguard as regards the developer's blocking vote. Many of the papers focus on the issue of developers' practice, ie, some of them retain units or transfer them to their own holding companies. Then they have a sizeable block, that given the requirements of 80% or 90% agreement, they can either frustrate the deal or try to push the deal, so it goes to them to redevelop. If I could ask the Minister to explain whether this question has been addressed by the Select Committee. It seems to me that we cannot take care, I agree with the Minister here, of every situation in writing this Bill. But we can provide general guidelines, general principles, and entrust this to a particular person to administer case by case.

Under the existing law, this is entrusted to the Courts under general principles of equity. The Bill seems to me to be different. It seems to be empowering a different person, the Strata Titles Board, and telling it not to look at these non-economic but sometimes very real matters. I would have been much more comfortable with the Bill if the Select Committee had recommended even simple wordings such as, "to consider extenuating circumstance of families and of the elderly", and to look at individual cases in this light. With this, may I ask the Minister's clarifications.

Prof. Jayakumar: Sir, I thank the three speakers for their comments on the Bill. Both Mr Chiam and Mr Simon Tay began their speeches by restating their positions during the Second Reading of the Bill about the sanctity of the home, the importance of property ownership and so on. I have two ways of dealing with it. One is to go again into all the explanations and justifications which had been made by the Minister of State, Assoc. Prof. Ho Peng Kee. But that is not the purpose of the Third Reading. The purpose of the Third Reading is really to examine the changes which had been recommended by the Select Committee and not to have another full-scale debate on the issues or questions of principle which had been fully canvassed and debated in the Second Reading. Much as I am tempted to go into details on the points raised by Mr Chiam and Mr Simon Tay, I will not go into them except to recapitulate the points which had been very cogently put forward by my colleague, the Minister of State.

The first point is that, for those who oppose the very principle of the Bill - and the principle of the Bill is to change the law to move away from unanimous requirement - I recognise they have their reasons to do so. If you oppose that basic principle, then of course, you must oppose the rest of the Bill. But if you agree with the fundamental principle that unanimous requirement should be changed to something less than unanimous, then you have to deal with a host of questions. What should be the majority consent level, if it is not unanimous? Should it be pegged to the age of the development, and what should be the age of the development? How do you deal with objections, financial and pecuniary, as well as emotional objections? What should be the institutional mechanism to deal with this?

The Bill, as amended by the Select Committee, addresses these issues consequent to the principle to move away from unanimous requirement. We can have a divergence of views on all these consequential matters because it will not be honest for me to say that there is a perfect or correct answer to each of these solutions. It calls for a judgement. Government's response, as now modified by the Select Committee, is to arrive at what we think is a reasonable and practical approach to work out this regime for facilitating en-bloc sales. It is really a facilitating process. It need not be the Government or the Strata Titles Board directing or instructing that such and such a development should now proceed with en-bloc sale. The regime is really to leave it as much as possible to those in the development to decide for themselves.

Then we have this key feature, ie, 90%/80% consent requirement pegged to the age of the building, ie, 10 years or less and 10 years or more, coupled with the institutional mechanism of the Strata Titles Board rather than the Courts for the reasons which are spelt out in the Bill. And the role of the Strata Titles Board is, again, that of facilitating the process, as an avenue for mediating when there are objections and the situation and the type of objections are imponderable. Some examples were given but those are not the only ones. The Board will be taking a non-interventionist approach but we do spell out a few of the categories where the Board expresses its disapproval. But apart from that, the Board will really take a mediating role.

If you read the Select Committee's Report, the papers which had been presented and the discussions which the Committee had with many of the representors, it will be evident that this is not a clear-cut issue of the majority imposing its will on the minority. We have a very good illustration which was brought to the attention of the Committee where actually it was the unreasonableness of the minority. You had an en-bloc sale which was frustrated by a couple who were divorcing and each party to the divorce wanted to get the maximum out of the proposal of the en-bloc sale and the majority of the committee decided to overcome this by coughing out from their own pockets to meet the demands of one of the parties to the divorce. So it is not so clear-cut that this is really a minority being run roughshod by a majority.

Then we have a point made in the Second Reading and repeated now, about this question of the home, the heartware, Singapore 21 and so on. We pointed out during the Second Reading that you have to distinguish between landed property and the concept of strata title development. Mr Simon Tay referred to actual delineated ground space. In strata title, there is no delineation of the subsidiary proprietor's identifiable plot of land. There is no such thing. You have, in common with the other subsidiary proprietors, a certain share value of the land area as well as a share value of all the common properties, and when we talk about common properties, it covers a whole range from carparks, the pool, the garden, lifts, corridors, external walls, columns, roads, drainage, sewerage and gas pipes and electric cables serving the development. So there is a distinction. When we talk about strata titles, the concept is different. You are having an identifiable airspace but with respect to land and other common properties, you have common ownership together with the rest of the subsidiary proprietors according to the share values.

Therefore, if you read the Select Committee's Report, many of the representors agreed with me, in fact, all agreed with me, when I put it to them that, in the end, it is a question of balance. The minority can say he has a right not to alienate but the majority also has a right to alienate. So, how do you balance these two? I think Mr Simon Tay wants to take the floor.

Mr Simon Tay: Thank you, Mr Minister. You said that the minority has the right not to alienate, but the majority wants the right to alienate. They still have the right to alienate, but they must only alienate their own property, their own share value. They never had a right to alienate theirs and their neighbour's property.

Prof. Jayakumar: Sir, if you look at the existing scheme, under section 78, it is possible for an applicant or some applicants to go to the court and get a court order even though you do not have 100% consent to achieve exactly what the Bill achieves, except that the Bill now provides a more facilitating method of achieving this result. So it is not a question that it was impossible for a subsidiary proprietor or group of subsidiary proprietors where there is no unanimous consent not to have en-bloc sale. It is possible. What we are doing here is to recognise the frustrations and difficulties, to recognise in land scarce Singapore, this will enable optimum utilisation of land. Is it or is it not desirable to make this move? So that is the fundamental question which has been addressed in the Second Reading debate. The Third Reading here is to discuss the improvements which have been made by the Select Committee.

I think Mr Chiam said that he agrees with the approach where the Strata Titles Board will pay attention to factors such as is there collusion, is there conflict of interest? And he therefore is in agreement with that approach. He also agrees with the approach of not taking an interventionist approach.

His main point was about the distribution of proceeds, and here we have a difference of views. Mr Chiam's approach would be, first, for the Board itself to decide on the distribution of proceeds. Secondly, in conferring the power to the Board to decide, he also has a proposal which is that it should not be by share values, but by open market value, take the average of two valuation reports. I say we have a difference of views, because the Government's approach as well as the approach taken by the Select Committee is that it is best to leave it to the parties to come up with their own arrangements.

Why do we take that approach? Because the factors that will have to be taken into account can be very diverse, and Mr Simon Tay has alluded to that. If you read the Report, some even talk about customs, superstitions, feng shui and so on. How does one quantify this at the level of Strata Titles Board or by the courts, if it were to go to the courts? Then there are emotional factors. There was this problem of a divorcing couple. How do we have objective criteria to work this into a decision? So, it is best to leave it to the proponents of the en-bloc sale to negotiate and try their best to accommodate the objections of the minority, and the objections of the minority can be based on numerous pecuniary as well as non-pecuniary matters. Mr Simon Tay pointed out that there may be a case of someone who recently bought the flat and spent a lot of money in renovations. So it can be quite a complicated business. It might be best to leave it to the parties to come up with a proposal.

As to the methods of distribution of proceeds and whether they are fair or not, his point that the Strata Titles Board ought to take into cognizance his suggestion, I think they will do so. But please bear in mind that the Board is not going to impose its terms and conditions. It will really leave it to the proponents of the application for en-bloc sale.

Mr Chiam's other point was to change the Fourth Schedule so that instead of an Extraordinary General Meeting (EOGM), it can be an Annual General Meeting. Let me explain why we have made an amendment to provide for Extraordinary General Meeting. This was a change made by the Select Committee after hearing many representors. The concern of the representors was that if we did not have a general meeting - let us leave aside for the moment Extraordinary General Meeting or Annual General Meeting - they felt that individual owners can be pressurised by various kinds of representations. So the thrust of this amendment is transparency. Have a general meeting. The next question is: why Extraordinary General Meeting? I think it is better to have an Extraordinary General Meeting so that it can be a special meeting. There can be no doubt in anyone's mind that it is called for a special purpose. To have an en-bloc sale proposal is indeed a very significant step. So it should be delinked from the Annual General Meeting.

I have taken note of his point that it is very difficult to convene an EOGM, but perhaps that itself may be a good reason to have an EOGM, because, do not forget, to have a 90% or 80% requirement is not going to be easy in any case. So I would commend keeping the Extraordinary General Meeting requirement.

Mr Shriniwas Rai made some suggestions as to the future composition of the Strata Titles Board. In view of the amendments for its enlargement, whether we could draw in people from other professions and community leaders. I shall give this some thought in consultation with the President of the Strata Titles Board whose views will have to be solicited.

Let me deal with a specific point that Mr Simon Tay raised. He talked about paragraph 17 of the Report. I think he has missed the point. This should not be read as the Committee disregarding primacy over home ownership as opposed to those who are not having the unit for their home. Basically, paragraph 17 dealt with the proposal by some who argued that when calculating the voting rights, a higher weightage be given to those owners who are living in their own homes. The first problem that the Select Committee had with that is you immediately would have an inconsistency with the whole structure of the Strata Titles Board where for all other matters concerning maintenance, funds, sinking funds, decisions on whether you are going to spend half a million dollars on repairing the swimming pool or putting in new lifts, all those decisions are based on share values, and not whether you are staying there or not. So the Select Committee decided it is better to keep to that basic approach.

Secondly, you may not be living there, but why should you have a lesser voting right on such important decisions than a person who is living there? So what if you have rented it out? You might have allowed your son or daughter-in-law to stay there. So should you have a lesser voting right? I think Mr Simon Tay has completely missed the thrust of that paragraph.

As to his point that individuals must have rights, I have already alluded to it. This Bill is about balancing of rights, balancing the interest of the minority whose viewpoint is to be safeguarded, who feel that they should not be forced to alienate, as well as the interest of the majority who cannot understand why their interest to alienate should be frustrated.

Coming back to his final point about emotional factors, the approach taken by the Board is not to adjudicate and decide on these matters. We should leave it to the parties, whether it is the emotional aspect of an elderly lady or widow or some other emotional aspects. These cases are so numerous and so imponderable that it will not be possible for the Strata Titles Board to decide on. But it can mediate, it can recommend, it can suggest. But in the end, it should be a decision left to the parties to decide. Whether individuals or developers own a large chunk of the voting rights, if they own 25%-30%, then, of course, they may meet the requirements of the Bill, and then the ingredients for en-bloc sale will proceed.

I hope I have answered most of the questions, Sir.

Question put, and agreed to.

Bill accordingly read a Third time and passed.