this is because the property has redevelopment potential.
Therefore, the owners may well profit form an en-bloc sale by getting more money selling as a group, than selling individually.
The en-bloc sale process is governed by the Land Titles (Strata) Act.
This Act can be downloaded from Attorney-General’s Chamber website
Before making an application to the (Strata) Board, the subsidiary proprietors have to execute a “collective sale agreement”. This application must not be later than 12 months after the collective sale agreement has been formed. (in writing).
1. Convening of a General Meeting
|Convening of a general meeting on requisition, required at least 20% of aggregate share value of all lots, or not less than 25% of total number of subsidiary proprietors. |
2. Collective Sale Committee
|Collective Sale Committee to be formed, comprising such numbers of persons as may be determined in a general meeting (3 to 14 natural persons).|
3. Requirements under the Act (presently)
- For properties less than 10 years old, 90% of total share values and 90% of the total area of all lots or flats are to agree to en-bloc sale.
- For properties older than 10 old years, as above but 80%,
- Collective Sale Committee (CSC) to be elected at general meeting of Management Corporation by ordinary resolution. (3 to 14 members who are natural persons.)
- General meetings must be called to consider the following: (A) appointment of lawyer, property consultant and marketing agent (B) appointment of sale proceeds (C) Terms and conditions of collective sale agreement (D) terms and conditions of sale and purchase agreement.
- Signing of collective sale agreement (CSA) must be witnessed by a lawyer appointed by the CSC. Property owners are given a 5-day cooling off period to withdraw from the sale after signing. However, they can change their mind only once.
- The Sale must be done firstly by way of public Tender or Auction.If Tender or Auction is not successful, then the sale can be done by way of negotiation. This must be concluded within 10 weeks from close of tender or auction.
- At close of tender a Valuation Report of the worth of the site is required to be carried out.
- any surplus management fund / sinking fund are to be returned according share values.
4. Roles and Responsibilities of Collective Sale Committee
The roles and responsibilities of the Collective Sale Committee (CSC) are found in the Third Schedule of the Land Titles (strata) Act. They include among other, that the CSC:
- represents the collective interest of all owners. They must act in good faith and avoid any conflict of interest.
- must use best efforts to get highest possible price.
- must act fairly to all parties in their dealings on the en-bloc sale matter, including the dissenting minority interest group.
- to work closely with legal advisors and marketing agent within stipulated time frames.
- to observe and comply with procedural requirements of the Land Titles (Strata) Act on matters relating to the en bloc sale.
- to follow-up on the tender and other sales processes (if any) to ensure best price is obtained.
- must, if necessary, apply to the Strata Titles Board for an order for en bloc sale under Part VA of the Land Titles (Strata) Act, provided that the majority consent, in writing, has been obtained.
5. Roles and responsibilities of Marketing Agent
The roles and responsibilities of the Marketing Agent include, among others:
- To work closely with the Collective Sale Committee and Legal Advisors
- To do presentation at Extraordinary General Meetings to explain the en bloc procedure, how the reserve price is derived, various apportionment methods available as well as progress updates from time to time.
- Help the Collective Sale Committee (CSC) to comply with procedural requirements of Land Title (Strata) Act, such as issuance of notices of meeting and recording of minutes of meetings.
- Market, promote and sell the property, with reasonable diligence in accordance with the client’s reasonable instructions.
- Represent client in negotiations
- Provide reasonable assistance and advice throughout the sale process
6. Roles and responsibilities of Managing Agent
The roles and responsibilities of the Managing Agent include, among other things the following:
- To manage, maintain and upkeep the common property of the housing development
- Its role in en-bloc sale is confined to the convening of general meetings, when proper requisitions have been received from the owners (subsidiary proprietors)
7. Roles and responsibilities of Legal Advisors
The roles and responsibilities of Legal Advisors include, among other things the following:
- Prepare the Collective Sale Agreement, Sale and Purchase Agreement, Tender documents and other relevant legal documents
- Offer legal advise and unsure full compliance with the procedural requirements of the Land Titles (Strata) act by Collective Sale Committee on matter relating to en-bloc sale.
- Apply to Strata Titles Board for an order for en bloc sale under Part VA of the Land Titles (Strata) Act, on instructions ofr the Collective Sale Committee, once the majority consent in writing has been obtained.
- Attend to full conveyancing aspects of the deal, once the order for en bloc sale has been successfully obtained.
- The Collective Sale Agreement has a twelve (12) month life-span, staring from the first subsidiary proprietor’s signature on the Collective Sale Agreement.
- The CSC must obtain required 80% (90%) signatures on the Collective Sale Agreement within this 12 month period, failing which, it will be automatically dissolved.
- For strata developments where the has been failed en bloc sale attempt, subsidiary proprietors are not allowed to restart the en bloc process within 2 years of the initial failed attempt.
- The first re-try to convey an Extraordinary General Meeting (EGM) to re-appoint a Sale Committee will need to be made by at least with 50% of the total number of subsidiary proprietors (instead of the usual 25%).
- Second or subsequent re-try to convene EGM’s within this restriction period, will need to be made with 80% of total number
DEFINITION OF PLOT RATIO
The Plot Ratio is the ratio between Gross Floor Area (GFA) and the Site Area (i.e. the land area) of the building.
Plot Ratio = Gross Floor Area / Site Area
Example: a building has built-up area (i.e. GFA) of 1,600 sq feet. It sits on a plot of land measuring 1,000 sq feet area. Plot Ratio = 1,600 / 1,000 = 1.6
Plot Ratio Data can be found in the Master Plan
The Master plan is dynamic and revised from time to time. Typical intervals are 5 years.
The Gross Plot Ratio / Storey Height Typology for flats and condominiums can be tabulated as follows: Source: Urban Redevelopment Authority (URA)
|Gross Plot Ratio (GPR)||Storey Height Control|