The current statute that governs en bloc sale will be made more transparent and fairer for the various stakeholders. Among the proposed changes to take place in early October include:
Sales committees must be properly formed and elected.
The signing of Collective sales agreements (CSAs) will be witnessed by lawyers who can clarify doubts and explain terms and liabilities.
Cooling-off period
Potential sellers will have a five-day 'cooling-off period' after they have signed the CSA.
Majority consent to include area of development
The definition of majority consent has been changed to mean 80% of share value as well as 80% of the areas of the development. Currently majority consent means 80% or 90% of the project’s share value, depending on whether it is more than 10 years old or less. In the new rule, the first condition still applies but now a second condition is required which include 80% or 90% of the area of the development, again depending on whether the project is more than 10 years old or less.
Requirements for general meetings.
A sales committee will have to be elected by more than 50% of owners present at a general meeting of the management corporation before signing of the CSA may begin. Likewise, property consultant and lawyer will have to be appointed at a general meeting. Key issues such as apportionment of sales proceeds and the terms and conditions of the CSA will also need to be discussed and formalised during general meetings.
Monthly updates by Sale Committee
The sales committee will also have to provide monthly, instead of bi-monthly updates of the consent level to keep all owners in the loop.
Requirement of tender or auction
Every launch for sale must be through a public tender or auction which means that the majority consent would have been obtained prior to that. The sales committee can engage in follow-up negotiations with any bidder, when the tender/auction fails to attract the reserved price. But a sale by private treaty must be concluded within 10 weeks of the close of the tender/auction. Otherwise, the tender will have to be relaunched for sales efforts to resume.
Market Reaction to proposed changes
As it is, many potential en bloc projects may speed up the signing of CSA to avoid doing everything all over again when the new law comes into effect. But in the longer term, there may be fewer en bloc sale sites as it would take a longer time to launch a site for sale unless the market is booming.
Lawyers' fees for collective sales, usually $3,000 to $4,000 per unit, could double or triple because of the additional duties thrust on lawyers. The lawyers will be required to witness signatures and certify the monthly updates on the consent level. The whole process of requiring lawyers to witness signatures will slow down the speed of putting en bloc sale sites onto the market.
Tuesday, September 11, 2007
Some Katong commercial properties up for collective sale
FACED with flagging businesses and dwindling human traffic, the shop owners of several commercial buildings in Katong are coming together to sell their properties en bloc.
This has led to renewed interest in the old East Coast hotspot recently, sparking hopes among residents and shopkeepers nearby that the area - famed for its good food and old-world charm - will get the rejuvenation it needs to boost its image.
At least five commercial buildings along Mountbatten Road and East Coast Road have appointed marketing agents to launch collective sales.
These include Katong Mall, Paramount Hotel and Shopping Centre, Roxy Square, Katong Plaza and the iconic Katong Shopping Centre, said Mr Lui Seng Fatt, the regional director and head of investments at Jones Lang LaSalle.
Back in its heyday, Katong Shopping Centre was the heart and soul of the East. But as the years wore on, the lack of entertainment facilities and an attractive retail mix made it a poor rival to other malls nearby such as Parkway Parade.
Many of these buildings in Katong are more than 20 years old and, in the case of Katong Shopping Centre, which opened in 1973, more than 30.
Dr Lim Un Huat, owner of several shops at Katong Mall, told The Straits Times most shop owners were in favour of the en bloc sales, and were waiting for the right price to sell.
Mr Lui said the 'tired-looking' buildings were overdue for a revamp, especially since residential projects in the area have gone upmarket.
This has led to renewed interest in the old East Coast hotspot recently, sparking hopes among residents and shopkeepers nearby that the area - famed for its good food and old-world charm - will get the rejuvenation it needs to boost its image.
At least five commercial buildings along Mountbatten Road and East Coast Road have appointed marketing agents to launch collective sales.
These include Katong Mall, Paramount Hotel and Shopping Centre, Roxy Square, Katong Plaza and the iconic Katong Shopping Centre, said Mr Lui Seng Fatt, the regional director and head of investments at Jones Lang LaSalle.
Back in its heyday, Katong Shopping Centre was the heart and soul of the East. But as the years wore on, the lack of entertainment facilities and an attractive retail mix made it a poor rival to other malls nearby such as Parkway Parade.
Many of these buildings in Katong are more than 20 years old and, in the case of Katong Shopping Centre, which opened in 1973, more than 30.
Dr Lim Un Huat, owner of several shops at Katong Mall, told The Straits Times most shop owners were in favour of the en bloc sales, and were waiting for the right price to sell.
Mr Lui said the 'tired-looking' buildings were overdue for a revamp, especially since residential projects in the area have gone upmarket.
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