Copyright 1996 The Straits Times Press Limited

The Straits Times (Singapore)

May 2, 1996
Forum; Pg. 40
Allow majority consensus for private redevelopment

EN-BLOC redevelopment schemes involve old HDB estates which are usually located in
areas with close proximity to MRT stations or with convenient public transport.

Such redevelopment schemes are good as they improve the aesthetic value of the
estates and maximise the potential built-up areas. Since such a development works in
tandem with the Government's policy of using fully the maximum potential of the
present built-up areas to blend with other new developments, it is understandable that
only a majority agreement is needed from residents for such projects.

Currently, for such a development to take place in private estates, a full consensus is
needed from the residents. This has resulted in many failed en-bloc redevelopment
proposals as it takes only one owner to disagree.

In land-scarce Singapore, many of these old private estates are not built to their
maximum potential. I hope that the Government can step in to revise the policy where
private estates are concerned, to allow a majority consensus rather than a full
agreement to be the deciding factor for such en-bloc redevelopments.

JOHN CHRISTOPHER DE SOUZA

Copyright 1996 The Straits Times Press Limited

The Straits Times (Singapore)
May 4, 1996
Comment/Analysis; Look Back in Wonder; Pg. 35
Putting a stop to tyranny of the minority in en bloc sales
Tan Sai Siong

A PERSONAL VIEW OF THE WEEK'S NEWS

MR JOHN Christopher de Souza, who wrote to the Forum page this week, would like to
see the Government make it easier for owners of private housing estates to opt for an
en bloc sale.

A collective sale can proceed only after all the owners sign a joint deed of sale which
binds them to sell on pre-determined terms with special contingencies.

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The problems encountered in getting unanimity could reduce significantly the number
of estates -built in days when land use was not optimised -from being freed for more
intensive and efficient development, thus wasting valuable national resources.

I support fully Mr de Souza's argument.

It does seem like loading the dice against the majority when even one owner in a 64-
unit estate could gum up the works.

That was what happened in the celebrated case involving Eng Kong Mansions in Toh
Tuck Road, one of the first developments to moot the idea of an en bloc sale. Two
uncooperative owners of one unit threw a spanner in the works.

Lawyer Vincent Yeoh had to take out a court application against the two on behalf of
the management committee and the 63 other owners.

The court ordered the co-owners to sign the re-development deed within 14 days or sell
their property at a public auction. Mr Yeoh would not reveal the grounds on which he
sued.

It is not known whether any other en bloc hopefuls, frustrated by a dissenting minority,
had tried to apply Mr Yeoh's methods to achieve the desired agreement.

What is known is that not a few potential en bloc sales have been aborted or put on
hold because a handful of owners simply say "no".

Or, in the case of Kim Lin Mansion -next to the prestigious Colonade -the dissenters,
instead of saying "no" outright, say: "I'll sign if everyone else signs."

I know about the frustrations suffered by the majority of the 114-unit development in
Grange Road because I have three sets of friends who own homes there.

They would like to see an en bloc sale but, to date, the property agent appointed to
handle the deal has been unable to obtain all the requisite signatures, despite at least
one extension of the signing deadline.

The frustration is doubly felt. Each owner has a potential $ 1.8 million to $ 2 million (said
to be the reserve price) locked up but still has to cough out several thousands of dollars
for repair bills, now that the en bloc sale has become remote.

And that is the cross which owners of developments of 30 years or older have to bear -
hefty repair bills.

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In fact, a worse picture was painted by Mr Tan Tiong Cheng, managing director of Knight
Frank Cheong Hock Chye & Baillieu, who once said: "There will come a day when these
apartments will fall apart because they've reached the end of their life cycle ... "

Given the opportunity cost to both the country and the individual owners, should a
minority -sometimes of no more than one -be allowed to hold the rest to ransom?

It is tempting to suggest that the Government should apply its land acquisition rules to
private housing when owners are unable to agree on en bloc sale proposals.

After all, there is already a precedent of sorts in the recently introduced programme,
called the Selective En-bloc Redevelopment Scheme or Sers.

Under it, the Ministry of National Development is empowered to buy back all the flats in
some of Singapore's ageing and sparsely-built Housing Board estates and re-develop the
sites to their full potential.

Furthermore, even laissez-faire Hongkong was reported last year to be contemplating

compulsory acquisition of private properties to enable private sector en bloc re-
development.

Still, what might be feasible in a colony is simply not on in Singapore, where a vocal
electorate will know where to draw the line.

And the line will be drawn on the compulsory acquisition of private homes -not for
roads, MRT stations, public housing, etc, but for another set of private homes.

What is more likely to find support, in my view, is putting a stop to the tyranny of the
minority in private housing estates.

Instead of unanimous agreement, the Government could introduce laws to make 75 per
cent the benchmark. This would be consonant with corporate laws which make 75 per
cent support essential for certain company resolutions.

Alternatively, a 90 per cent threshold could be used. That is the threshold, under
company law, which permits dissenters to be acquired compulsorily by the majority.

Something must be done. Or else en bloc sales will occur only in small developments
while huge, but ageing projects sorely in need of rejuvenation, like Kim Lin Mansion,
Pacific Mansion and the like, will continue to be given only bad cosmetic surgery.

What a waste of prime, freehold land!

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Copyright 1996 The Straits Times Press Limited
The Straits Times (Singapore)
May 7, 1996
Forum; Pg. 26
En bloc sales: Exit strategy needed

I REFER to Ms Tan Sai Siong's article "Putting a stop to tyrannny of the minority in en
bloc sales" (ST, May 4). It was timely and relevant in Singapore's land-scarce context.

A lot of attention has been paid to public-sector housing, especially during

Parliamentary debates. This is as it should be, but public housing has developed at such
a pace under the aegis of dynamic HDB planners and a good government that private-
sector condominium dwellers are beginning to feel that their problems are secondary or
not being looked at.

The Government has been quick to introduce appropriate legislation to enable it to

carry out its mandate of better and improved public housing. The recently introduced
Selective En-Bloc Redevelopment Scheme is an example.

This will enable the HDB to target old and obsolete HDB blocks selectively for
upgrading/redevelopment to realise the full potential of the area. In the process, the
area is rejuvenated, with all the attendant benefits to the national economy.

There is no need for unanimous consent here. Seventy-five per cent of the owners
voting in favour of the scheme is sufficient for it to go through.

In the private condominium market, no revisions to the Land Title (Strata) Act (Cap 158,
1988 Ed) have been made to reflect the reality that owners of apartment units also face
a similar problem of ageing estates but without a reasonable provision for a way out.

A requirement for unanimous agreement among all owners is tantamount to no

provision for a way out, even if it is in the best interests of all.

There is always a dissenting minority in any decision. As long as these owners are not in
any way victimised, the majority decision should hold.

An exit strategy should be provided as a means for owners of such condominiums to

redevelop or, alternatively, go for an en bloc sale if that is the majority consensus.

This is especially so for old private condominiums now given a choice between
redevelopment and en-bloc sale because of revisions to the Development Guide Plans
(DGPs).

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As more private condominiums attain maturity and decline, relevant legislation needs to
be incorporated into the existing Act to keep up with the times and changing
government signals to the market.

In land-scarce Singapore, there is a need for the Government to intervene to help the
majority achieve what will ultimately be in the best interests of Singapore in terms of
intensity of land use.

I own an apartment unit in an estate that has this problem of minority dissenting
owners.

The DGP of the estate has been increased to 2.1 plot ratio from the existing 1.01.

Currently, the development is low-rise. Under the revised DGP, we could redevelop it
into 20 storeys. We have 93 per cent of owners (there are 95 owners) agreeing to go for
redevelopment or, alternatively, collective sale.

We have asked our Member of Parliament to try and resolve the matter. He did try, but
the dissenting minority was difficult to begin with.

We have even written a short paper on our recommended exit strategy for our MP to
help him in getting the relevant ministry to take up the matter.

Unfortunately, we have not received any response.

The criteria for an exit strategy that we suggested in our proposal to our MP are as
follows:

- Private condominiums for redevelopment and/or en-bloc sale should be at least 15

years old from TOL (temporary occupation licence) date.

- Management corporation must agree through a special resolution that it is in the best
interest of all owners, considering the age of the estate, the functional and external
obsolescence and the ability of owners collectively to undertake extensive repairs and
upgrading works.

- Transactions must be above board and transparent.

- Benefits of redevelopment or en-bloc sale must be apportioned equitably.

- Provision of an arbitration tribunal to hear cases where minority dissenting owners

complain about unfair apportionment of proceeds (whether in kind or in cash). The
existing Strata Title Board could be vested with this additional role for such dispute
resolution.

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- These proposals must be in line with national land policy guidelines.

With the rapid ageing of private condominiums and the coming on-stream of many
more new condominiums which will age in one or more decades, the problem of private
condominiums falling apart due to inability to undertake redevelopment or en-bloc sale
because of minority dissent could reach a critical state.

An exit strategy crafted by legislation or an amended version of Section 78 of the

existing Land Title (Strata) Act (Cap 158, 1988 Ed) could pave the way for a more
consensual way for owners to resolve the matter and prevent a small minority from
holding the majority to ransom.

RONNY SIM

The Straits Times (Singapore)

May 13, 1996
Forum; Pg. 28
En-bloc sales: Owners should not be forced to sell property

I REFER to Mr Ronny Sim's letter "En-bloc sales: Exit strategy needed" (ST, May 7). While
I agree with him that there is a need for old estates to be upgraded via redevelopment, I
find the idea of a Bill to deny the minority their right to object to a redevelopment
proposal absurd.

Most en-bloc sales promise incredible profits. Under normal circumstances, any person
would be enticed to offer his property for a collective sale. But there are some who may
have reasons to object to such a sale. One example could be that of a property inherited
from a loved one. It may have great sentimental value for which no amount of money
can compensate. Imposing a "majority wins" rule defies all fundamental rights in
property ownership. It may also give rise to abuse by unscrupulous individuals or groups
for selfish gains.

I sympathise with Mr Sim's frustrations, but I cannot agree with his suggestion for
legislation. I find it fascinating that a Member of Parliament supported his suggestion to
force an individual to sell his property against his will, just because the majority thinks it
is a better option.

MARTIN GOH

The Straits Times (Singapore)

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June 8, 1996
Forum; Pg. 36
Spare a thought for the elderly who may not need fancy condos

THE COST OF THE SINGAPORE DREAM

THE letter "Don't pursue dreams at the expense of others" (ST June 3) is timely.

One aspect of materialism at the expense of others that is not mentioned is the
singlemindedness with which some Singaporeans are pursuing the possibility of making
a killing through en bloc sales of condominiums.

I have heard, on more than one occasion, comments such as "There's one old woman
holding out" and "If only that old couple would be more reasonable".

The elderly folk who are holding out and appear to be unreasonable have probably
spent all their CPF and other savings on purchasing these particular apartments.

In all likelihood, valuing their independence, they bought their homes for proximity to
family and accessibility to shopping and transport. In their twilight years, they are
expected to uproot themselves and move to unfamiliar surroundings.

There are no retirement villages or similar facilities in Singapore where the independent
elderly can retire in comfort and dignity.

Where are they going to move to? Will banks consider them credible clients for loans to
purchase new property?

The elderly may not want or need the new fancy condos. If the younger folk yearn for
luxury amenities, perhaps they should take a lesson in thrift and patience from their
elders, and in due course they will be able to afford (with a clear conscience) those
tempting dream condos instead of hoping to make a fast buck at the expense and
inconvenience of our senior citizens.

LEAENA TAMBYAH