EN-BLOC SALES

[Mr Speaker in the Chair]

Mr Goh Chong Chia asked the Minister for Law what action his Ministry will take against those who threaten owners who do not wish to give consent to en-bloc sales.

Mr Goh Chong Chia asked the Minister for National Development whether his Ministry will take action against owners who have neglected maintenance of their buildings in anticipation of en-bloc sales.

Mr Goh Chong Chia asked the Minister for Law what action will be taken to correct the unhealthy trend of greed associated with en-bloc sales which is destroying the community bonding that we are trying so hard to build.

The Minister for Law (Prof. S. Jayakumar): Mr Speaker, Sir, can I have your permission to answer the three Questions together, including the Question addressed to the Minister for National Development who has asked me to answer on his behalf as they are all related?

Mr Speaker: Yes.

Prof. Jayakumar: Sir, the Member's Questions reflect his concern about recent press reports on en-bloc sales. However, the reports of several en-bloc sale proposals are actually not surprising. The Government first announced its intention to review the need for unanimous consent for strata developments in November 1997. There was considerable interest in en-bloc sales because of the upward revision in the plot ratios. This meant that the land can be redeveloped for a more intensive use, thus increasing the land value. There was a need to move away from the 100% or unanimous consent requirement to facilitate the redevelopment of land to maximise its use and economic potential.

Sir, Members will recall that we took time and care in crafting the legislation. The Bill went through a Select Committee and was passed at the Third Reading in this House on 4th May 1999. It was brought into force recently on 11th October 1999.

During this 2-year period, those who were keen on selling en-bloc sales were waiting to see the final provisions of the law before proceeding. Therefore, what we are really seeing now are those proposals which had been put on hold during the last 2 years, pending passage of the legislation.

Let me stress that while some of the en-bloc sale proposals have been transacted, other proposals are still on tender and are still awaiting a response from interested parties. The Government does not prescribe the sale. It is the choice of the owners. Whether an en-bloc sale proceeds will depend on whether there is a convergence of interests of the owners as well as the buyers where there is a price which the owners are happy to accept.

On the specific questions posed by the Member, firstly, as to his question about correcting the unhealthy trend of greed associated with en-bloc sales, obviously, this is a matter of opinion, depending on how one looks at it.

To the majority owners, they are simply realising the worth of their assets because of the change in the plot ratio. The higher plot ratio gives them the choice of selling the whole land with a higher premium for each owner than if they were to sell their units individually.

Before the amendment on en-bloc sales by majority consent, a small minority, even only one, could block the sale. This often led to strained and acrimonious relationships. For example, in the case of Kim Lin Mansions, which representors in the Select Committee spoke about unhappiness amongst the owners over the blocked sale culminated in a court case. With the announcement of the proposed amendments, the court case was withdrawn, thus avoiding a long, expensive and bitter court proceeding.

Secondly, the Member asked about threats against owners who do not wish to give consent. If an owner has been threatened into giving his consent, such consent would not be valid in law. If the Strata Titles Board is satisfied that the consent was not given voluntarily, then the Board would take this into account in determining whether the required level of consent has been attained. Furthermore, those who are threatened could also lodge a police report or make a complaint before a Magistrate for the issue of a private summons for criminal intimidation under the Penal Code.

Thirdly, as to his question on the action taken against owners who have neglected maintenance of their buildings, the Building and Construction Authority will take action against Management Corporations and owners who neglect to maintain their buildings or fail to comply with any notice of the Commissioner of Building Control to engage a professional engineer to inspect their buildings for structural safety, regardless of whether the owners are anticipating an en-bloc sale.

Mr J. B. Jeyaretnam (Non-Constituency Member): Sir, Mr Goh would seem to imply by his question that there are some people who threaten the owners. Is the Ministry aware of any such incidents or not?

Prof. Jayakumar: No such reports have been received by my Ministry.