En Bloc

WHAT IS A COLLECTIVE SALE?

A collective sale (or more commonly termed en-bloc sale), is a combined sale by the owners of 2 or more property units to a common purchaser.

The most common en-bloc sale is the sale of all the units in a strata or flatted development to a purchaser. The sale proceeds are then divided amongst all the unit owners.

Other variations of en-bloc sales include the sale of all units in a development together with an adjoining development or landed properties. .

WHAT DO THE 2007 AMENDMENTS TO THE LAND TITLES (STRATA) ACT COVER?

Before the 2007 amendments, an en-bloc sale of all the units in a strata or flatted development could take place only if a specified majority (based on share value, share in land or notional share) of the unit owners agreed.

The 2007 amendments provide that, in addition to the specified majority (based on share value, share in land or notional share), there must also be a specified majority of the total area of all the lots in a strata or flatted development before they may apply to a Strata Titles Board for an order that all the units and the land in the development be sold.

Please click here to see the General Information on the 2007 Amendments and the 2010 Amendments.

WHAT ARE THE TYPES OF DEVELOPMENTS FOR WHICH AN APPLICATION CAN BE MADE FOR AN ORDER FOR EN-BLOC SALE UNDER PART VA OF THE ACT?

The developments for which an application can be made for an order for en-bloc sale by majority agreement are:

  1. Strata developments registered under the Land Titles (Strata) Act;
    [Section 84A]
  2. Strata or flat developments where the owners of the flats also own a share in the land and the leases for their flats are registered under the Registration of Deeds Act or the Land Titles Act; and
    [Section 84D]
  3. Strata or flat developments where the owners of the flats own a registered leasehold tenure of 850 years or more  (or such other leasehold period as the Minister may specify) but they do not own the land in the development. The leases for the flats may be registered under the Registration of Deeds Act or the Land Titles Act.
    [Section 84E]

    As there are no share values or shares in land assigned to flats in such developments, the owners of at least 25% of the total number of flats in the development must apply to the Registrar of Titles for notional shares in land to be assigned to their individual flats to facilitate calculation of the majority agreement.

    Please click here for the application form(Under the New Act)

    [Section 84E(2)]
  4. Strata developments where the owners of the flats own a registered leasehold tenure of 850 years or more (or such other leasehold period as the Minister may specify). The subsisting leases for the strata lots are registered under the Land Titles (Strata) Act.
    [Section 84FA]


WHAT IS THE REQUIRED MAJORITY WHICH MUST BE OBTAINED BEFORE AN APPLICATION CAN BE MADE?

If a development is less than 10 years old [calculated from the date of the issue of the latest Temporary Occupation Permit (TOP) (or Certificate of Statutory Completion (CSC) if no TOP)], the owners of not less than 90% of the share values, share in land, or notional share in the land and not less than 90% of the total area of all lots (excluding the area of any accessory lot) or flats must agree in writing to sell all the units and common property or land to a purchaser under a sale and purchase agreement (subject to an order of the Strata Titles Board); and

[Sections 84A(1), 84D(2), 84E(3) and 84FA(2)]

If a development is 10 years old or more [calculated from the date of the issue of the latest TOP (or CSC if no TOP)], the owners of not less than 80% of the share values, share in land, or notional share in the land and not less than 80% of the total area of all lots (excluding the area of any accessory lot) or flats must agree in writing to sell all the units and common property or land to a purchaser under a sale and purchase agreement (subject to an order of the Strata Titles Board).

[Sections 84A(1), 84D(2), 84E(3) and 84FA(2)].

Note: The date of issue of the TOP or CSC may be obtained from the Building Plan Department, Building and Construction Authority at 5 Maxwell Road #16-00 Tower Block, MND Complex, Singapore 069110

WHAT ARE THE STEPS WHICH THE MAJORITY OWNERS MUST TAKE BEFORE SUBMITTING AN APPLICATION?

  1. The duly constituted collective sale committee must hold and conduct General Meetings pursuant to the Second Schedule in relation to the en bloc sale.

    [The Second Schedule. Para. 2]

    NOTE: The Second Schedule sets out the provisions that govern the conduct and proceedings of the General Meetings of the Management Corporations for the purposes of an en-bloc sale and the Third Schedule sets out the provisions that govern the composition, constitution and proceedings of a collective sales committee.

  2. Appoint not more than 3 owners from the collective sale committee to represent the majority owners in connection with the application.

    [Section 84A(2)]


  3. Obtain a valuation report for the whole development from an independent valuer as at the date of the close of the public tender or auction.
    [The Schedule. Para. 1(e)]


  4. Obtain a report by an independent valuer on the proposed method of distributing the sale proceeds.

    [The Schedule. Para. 1(e)]


  5. Advertise the particulars of the proposed application in the local newspapers, as approved by the Board, in the 4 official languages.
    Please click here to see format(Under the New Act)

    [The Schedule. Para. 1(d)]

    The advertisement must include:

(i) information on the development ie name, land lot number and address;
(ii) brief details of the sale proposal;
(iii) the place at which the relevant parties can inspect the documents for the en-bloc sale; and
[The Schedule. Para. 3]
  1. Prepare the application to be made to the Board. A copy of the application form may be downloaded from this website. The formis also available at the office of the Strata Titles Boards at 45 Maxwell Road #01-11, East Wing, The URA Centre, Singapore 069118 (Tel: 6325 1585/6, Fax: 6325 1607).
  1. Serve a notice of the proposed application (“the notice”) to all the owners of the units by registered post and to the mortgagee, chargee or other person (other than a lessee) with an estate or interest in the unit and whose interest is notified on the land register for the unit by registered post. [For the address of service by registered post, please see paragraph 9]

The notice must include a copy of:

(i)
the advertisement referred to in paragraph 5 above;
(ii)
collective sale agreement
(iii)
the sale and purchase agreement;
(iv)
a statutory declaration made by the purchaser on his relationship, if any, to the unit owners;
(v)
the valuation report referred to in paragraph 3 above;
(vi)
the report by an independent valuer on the proposed method of distributing the sale proceeds referred to in paragraph 4 above; and
[Section 84A(4), 84D(3) and 84E(5)
The First Schedule. Para. 1(e)]

   8     Affix a copy of the notice, in the 4 official languages, to a
conspicuous part of each building in the development.


[The First Schedule. Para. 1(e)]

   9     The notice to be served by registered post shall be served on a
party:

(i) where the party is an owner of a unit registered under the Land Titles (Strata) Act, at the address as shown on the strata roll;
(ii) where the party is an owner of a unit not registered under the Land Titles (Strata) Act, at the last recorded address at the Singapore Land Authority;
(iii) where the party is a mortgagee, chargee or other person with an estate and interest in the unit whose interest is notified on the land register, at the address on the strata roll or last recorded address at the Singapore Land Authority; and
(iv) where the party is a management corporation, at its address as shown in the Singapore Land Authority.

 

[The First Schedule. Para. 1(f)]

WHAT IS THE PROCEDURE FOR APPLYING?

The application for en-bloc sale must be made using the approved form within 14 days of the publication of the advertisement. The application is to be made by way of a statutory declaration by the representatives appointed by the majority owners, stating that the relevant provisions of the Act have been complied with. The application is to be submitted at the office of the Strata Titles Boards,

45 Maxwell Road, #01-11
East Wing, The URA Centre,
Singapore 069118

Tel: 6325 1585/6
Fax: 6325 1607

The application must include the following:

(i) the documents set out in paragraph 7;
(ii) a list of the names of the unit owners who have not agreed to the sale in writing, their mortgagees, chargees, the subsidiary proprietors in reversion of the leasehold estate in the lots and other persons (other than lessees) with an estate or interest in the flats whose interests are reflected in the land registers;
 
[The First Schedule. Para. 4]
(iii) such other documents that the Board may require; and
 
[The First Schedule. Para.6]
(iv) an undertaking to pay the costs of the Board in relation to any valuation or other reports called for by the Board.
 
[Section 84A(3)]

6 copies of all documents mentioned above are to be submitted to the Strata Titles Boards.

WHAT OTHER DOCUMENTS DO THE MAJORITY OWNERS NEED TO FILE?

After submitting the application at the Strata Titles Boards, the applicants must lodge a copy of the application, in the approved form, for registration at the Singapore Land Authority. A copy of the forms can be downloaded from the website of the Singapore Land Authority athttp://www.sla.gov.sg
.

[The First Schedule. Para. 6]

HOW CAN A MINORITY OWNER OR HIS MORTGAGEE, CHARGEE, ETC, FILE AN OBJECTION TO THE EN-BLOC SALE APPLICATION?

A unit owner who has not agreed to the sale in writing, his mortgagee, chargee or other person with an estate or interest in the unit may, within 21 days of the date of the notice for en-bloc sale, file an objection in the prescribed form (1 original & 5 photocopies) with the Strata Titles Boards.

[Sections 84(A)(4), 84D(3), 84E(5) and 84FA(2)]

The Board will, within 5 days of the filing of an objection, forward a copy of it by registered post to the representatives appointed by the majority owners and their lawyers, if any.

[The First Schedule. Para. 5]

WHAT ARE THE FACTORS WHICH THE BOARD WILL TAKE INTO ACCOUNT IN DECIDING ON AN APPLICATION?

  • Where no objection is filed against the application

The Board will approve the application unless, after going through the application, it is satisfied that the transaction is not entered into in good faith, after taking into account:

(i) the sale price for the whole development;
(ii) the method of distributing the sale proceeds; and
(iii) the relationship of the purchaser to any of the flat owners.

The Board will not approve an application if the sale agreement requires any unit owner who has not agreed in writing to the sale to be a party to any arrangement for the redevelopment of the property or if the collective sale committee does not consent to any order made by the Board in relation to an increase in the sale proceeds to be received by the owners objecting to the sale (where it is just and equitable to do so in the opinion of the Board).

[Sections 84A(9), 84D(7), 84E(9) and 84FA (9)]
  1. Where objections are filed against the application

The Board will consider all the factors in paragraph 1 above and the objection and may call for mediation.

The Board will not approve an application if it is satisfied that:

(i) the unit owner who objects to the sale will suffer a financial loss; or
(ii) the sale proceeds to be received by a unit owner, his mortgagee or chargee, are insufficient to redeem any mortgage or charge against the flat.

Note 1
: A unit owner will be considered to suffer financial loss if the sale proceeds for his unit, after any deduction (such as stamp duty and legal fees paid on purchase of the unit, privatization costs and costs incurred in the collective sale) allowed by the Board, are less than what he paid for the unit.
Note 2: A unit owner will not be considered to suffer financial loss because his net gain from the sale will be less than the other unit owners. 

[Sections 84A(8), 84D(5), 84E(7) and 84FA(6)]
[Fourth Schedule]

Note 3 : A unit owner will not be considered to suffer financial loss because the proceeds of sale for his unit, after such deductions as the Board may allow is less than the price he paid for his unit if he had purchased his unit after the collective sale committee had already signed an agreement to sell all the units and common property in the development to a purchaser

 

[Sections 84A(8)]

WHAT ARE THE EFFECTS OF AN ORDER OF THE BOARD FOR EN-BLOC SALE?

Owners of units and land

An order for en bloc sale issued by the Board is binding on all the unit and land owners of the development (including their successors in title and assigns), their mortgagees, chargees and persons with an estate or interest in the units and land (including lessees).

Under such an order, all the unit owners must sell their units (together with the land) to the purchaser in accordance with the sale and purchase agreement. They must produce the certificates of title and relevant title deeds to the representatives appointed by the majority owners for the purpose of the sale.

[Section 84B]

Owners of land in an application under section 84E where the unit owners of a 850 year registered leasehold estate do not own a share in the land

Where the Board makes an order for the en-bloc sale of the units and the land, the owner of the land (or reversion) will be deemed to have transferred his estate and interest to the land to the purchaser upon the registration by the Registrar of titles of the transfers of all the units in the development and the Registrar of titles shall enter a notification of the vesting of the land in the purchaser on the land register.

[Section 84E(11)]

Owners of a registered leasehold in an application under section 84FA where the unit owners own the registered leasehold tenure of at least 850 years or other tenure

Where the Board makes an order for the en-bloc sale of the units and the common property in the strata title plan, the unit owner in reversion of the leasehold estate will be deemed to have transferred his estate and interest in the unit to the purchaser upon the registration by the Registrar of Titles of the transfers of all the units in the strata title plan and the Registrar of Titles shall enter a notification of the vesting of the reversionary interest in the purchaser on the subsidiary strata land register.

[Section 84FA(11)]

Effect on leases of the units

A lease against any of the units (other than the lease held by the unit owner) shall, unless there is an earlier agreed date, determine on the date on which vacant possession is required to be given to the purchaser.

[Section 84B]

CAN THE MAJORITY OWNERS APPLY TO THE BOARD TO APPOINT A THIRD PARTY TO ACT FOR CERTAIN UNIT OWNERS IN THE SALE?

The representatives appointed by the majority owners may apply to the Board to appoint a person to deal with all matters pertaining to the sale of a flat where:

(i) the unit owner has died and no personal representative has been appointed; or
(ii) in any other case as the Board may think fit.

[Section 84C]

WHO CAN APPEAR IN A HEARING BEFORE THE BOARD?

Where a Board has appointed a date for hearing, it will, where necessary, give to all parties to the dispute or matter a notice of the hearing.

 

[Regulation 17]

A party entitled to appear before the Board may appear in person or may be represented by his lawyer or such other person as the Board may allow and who may examine witnesses and address the Board on behalf of the party.

[Section 94]

Source from http://www.mnd.gov.sg

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