Problems and implications of En Bloc in Singapore
Published: Last Edited:
Disclaimer: This essay has been submitted by a student. This is not an example of the work written by our professional essay writers. You can view samples of our professional work here.
Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UK Essays.
Due to the increasing demands and the needs to cater to the future population, the Urban Redevelopment Authority of Singapore released development guide plans, which encourage redevelopment of existing land. Despite the fact that the utmost motive for En Bloc is to increase land value and to maximize land use, the sale of En Bloc has come to a point that the public has raise concerns over the problems and implications that has occurred. This paper will show clearly what are the problems and implications of en bloc and on the discussion of whether the government intervention is another solution to the problems of the en bloc. The authors' main objective is to list out the main problems that has arisen with the rising trend of En Bloc.
Keywords: En Bloc, Government Intervention, Problems and Implications
We are heartily thankful to our supervisor, Mr Andy Tan, whose selfless encouragement, guidance and support throughout the project has enabled us to develop an understanding of the subject.
Lastly, we offer our regards and appreciation to those who supported us in any aspect until the completion of the project.
Table of Contents
Table of Contents 4
Chapter 1.0 Introduction 5
1.1 Background 5
1.2 Objectives 6
1.3 Scope of study 6
1.5 Sources of research 7
1.6 Definition of En Bloc 7
1.7 Collective Sale Agreement 8
Chapter 2.0 Procedures and Legal Framework of En Bloc 11
2.1 Stage of En Bloc 11
2.2 The requirements of En Bloc from Strata Title Board 14
2.3 Sale committee 14
2.4 Requirements 15
2.5 Chairperson 15
2.6 En Bloc sale by public tender or auction 16
2.7 Extraordinary general meeting 17
2.7.1 General meetings convened by collective sale committee 17
Chapter 3.0 Case Studies - Horizon Tower 19
3.1 Case Summary 19
3.1.1 Introduction for Horizon Tower 19
3.1.2 Review of Case 19
3.2 Particulars of development & condition of site 20
3.3 Reason for en bloc sale 21
3.4 Judge decision on horizon tower case 22
3.5 Problems identified 25
3.5.1 Time Problem 25
3.5.2 Momentary problem 25
3.5.3 Problem with the Procedure 26
3.5.4 Problem in the Sale Committee 26
Chapter 4.0 - Problems and Implications of En Bloc 28
4.1 Minorities Rejecting the En Bloc 28
4.2 Pro En Bloc Subsidiary Proprietors 29
4.2 Property Prices 30
4.4 Implication 31
4.5 Freedom of choice 32
4.6 Interest of the minorities 32
4.6 Government 33
Chapter 1.0 Introduction
Based on the first ever successful attempt of En Bloc attempt, En Bloc actually started in Singapore in the year 1994 (Low 1999). October 1994 marks the first ever en bloc of Cosy Mansion. Owners of Changi Heights, another freehold condominium also received a windfall gains by selling Changi Heights through en bloc. The purpose of en bloc was to maximize land use, as Singapore has very limited land to develop, developers has to find other ways to increase their land banking or to develop properties (Uma Shankari 2010). From the owners view, en bloc motivates individual owners to participate in the en bloc sales when the potential value of the land surpasses the "marriage" value of the land  and the physical improvement thereon.. Over the years, the government has been monitoring and controlling the rules and regulations of the En Bloc (Chuang Peck Ming, 2010). However, even with the strict rules, problems and implications that arise from the En Bloc continue to raise concerns over the public and attention of the media, especially the minorities whom initially objected to the en bloc (Chan, 2007).
The objective of this paper is to identify the problems that would commonly occur with En Bloc and on the implication it has on the society and the real estate market. We believe that this paper will give us a better understanding on what are the main issues that could contribute to a ensure a smooth process of en bloc and to increase the success rate of en bloc. This would be done through a clear understanding of rules and regulations that the authorities have set.
1.3 Scope of study
Our scope of study would be on a case study of the Horizon Tower. This is a unique case as it sparks a 2 and a half year long battle in the court over problems which have arise during the En Bloc process of the Horizon Tower. The roles of the parties involved and the legal problems would be our main focus. The parliament released new rules that should be obeyed in regard to this case.
1.5 Sources of research
This paper is based on information on the studying of cases from the newspaper article that are recent and on information abstracted or summarized from Land Title Strata Act (LTSA)  and Strata Title Board (STB)  . We have also conducted research on information discussed on market analysis done by property and marketing agents.
1.6 Definition of En Bloc
The definition on en bloc or collective sale means the sale of an entire private strata development by way of majority consent and is governed by the Land Titles (Strata) Act (MOL  ). En bloc is made possible through ideas of redeveloping the current target property comprehensively. Owners of separate units in an apartment, landed properties, adjoining development, condominium or even an office building can band together to collectively sell out their properties to a developer. Sale proceeds will then be divided among all the unit owners. The amount of profits they get varies and is dependent on the developer and the agreement that was established between the marketing agent and the developer.
1.7 Collective Sale Agreement
En Bloc can be conducted through private treaty, public and private tender. Usually En Bloc is conducted through public tender in order to create more transparency and to create more choices of interested parties for the en bloc (LTSA) (The Schedule. Paragraph 1).
There are two main legal documents-the Collective Sale Agreement and the Sale and Purchase Agreement. A tender document would act as the legal document for En Bloc which is conducted through tender, either publicly or privately. (See Appendix 1)
Some basic terms that would be included in the Collective Sale Agreement;
Method on distribution of sales proceeds
Validity of period of the Collective Sale Agreement
Provisions for majority that have agree to the agreement
Date to deliver vacant possession
Sale subjectivity to tenancies
Refer to (LTSA) [Sections 84A (9), 84D (7), 84E (9) and 84FA (9)]
1.8 Timeline of En Bloc Trend in Singapore
This is the year where en bloc actually started although there is no evidence that prior to this date, en bloc has already taken place. But through research, the first ever successful en bloc was on the year 1994, through Cosy Mansion and Changi Heights transacted - first ever successful en bloc in Singapore. En bloc phenomenon began as the real estate market took a sliding up the ladder, property was booming and developer sees it as a very good chance to redevelop old property to meet the demands and expectations for the real estate market. As a result, the en bloc trend climbed steadily and fast with the real estate market in Singapore (Tien Foo Sing, 2004).
The rules on en bloc changed and strata title board introduce the 80 percent majority consent, 90 percent if estate is less than 10 years old, making it easier for place to en bloc (LTSA)(Part VA)(84A)(1)(a).
In year 2007, Deputy Prime Minister and Law Minister S Jayakumar announced that en bloc sales must be agreed by those who own at least 80 or 90 percent of units in the development on top of the current rule stating that 80 percent voting rights for property more than 10 years of age and 90 percent for less than 10 years of age (Kalpana Rashiwala, 2007).
The ministry of law also proposes to Strata Title Board to issue guidelines on allowable expenditure when evaluating claims of financial loss.
The Parliament passed down an amendment act on May 18. The act will take effect at 15th of July. The key features of the new act include imposition of a two-year restriction period after a failed en bloc attempt, and to re-try, 50 percent of the combined share value or number of owners need to give their consent while approval from 80 percent for the second re-trying of the en bloc attempt. The automatic dissolution of any Sales Committee prior to failure to collect signatories to is Collective Sales Agreement (CSA) within one year (Uma Shankari, 2010).
Chapter 2.0 Procedures and Legal Framework of En Bloc
2.1 Stage of En Bloc
Phase 1: Pre-Sale Preparation
Owners would come together to agree and sign the Collective Sale Agreement usually though the  sale committee. In some instances, owners would need to sign petition or letters of authorization to agree to the collective sale. An Extraordinary General Meeting will be held to appoint an en bloc lawyer and property agent, the apportionment of sales proceeds, and approval of the terms and conditions of the Collective Sale Agreement. This stage would roughly take 12 months.
Phase 2: Collective Sale Agreement
Owners would be asked to sign the Collective Sale Agreement, 80 percent of signatures are needed if the building is more than 10 years old while 90 percent of signatures are needed if the building is less than 10 years old. This process would roughly take another 12 months.
Phase 3: SP Meeting
Owners will be updated on the total numbers of SPs who have signed the Collective Sale Agreement. The sale committee and any solicitor would provide information to the owners on the sale proposal and sales proceeds.
Phase 4: Public Tender Stage/Bid for Tender Stage
Once the collective Sale Agreement is signed, the sale committee would have to look for interested buyers/developers. To ensure transparency, this must be done through public tender exercise. Interested developers would then submit their bids.
Phase 5: Post Tender
The sale committee will then evaluate the bids and negotiate with the developers on details prior to the sale. The terms and conditions of the Sale and Purchase Agreement will also be discussed at this phase. Phase 3 to Phase 5 would take up to an estimated time of 12 months.
Phase 6: Legal Completion
The sale committee and the developer will then obtain an order from the Strata Titles Board. The strata title board will only allow the en bloc to proceed once the requirements are met. Upon approval, the developer would be awarded a conditional contract. The deposit that was originally paid is held by the vendors' lawyer as stakeholder. This would probably take 2-3 months.
Normally, it is very unlikely that there are no owners who objected to the sale. Owners who object to the sale can raise objection to Strata Title Board. These objections will also be considered before deciding on the outcome on the application of the sale. Parties who are unsatisfied with the Strata Title Board's decision can challenge the decision through the judiciary's appeal system. Time taken at this phase is undetermined.
In conclusion, the time take for a successful en bloc would take roughly 1 to 2 years, while other cases would take up to 3 years and above.
2.2 The requirements of En Bloc from Strata Title Board
These are the few requirements that the strata title board would look at to decide for whether the en bloc to proceed. The Strata Titles Board will consider whether the sale was done in good faith and at arm's length. In order to determine whether the sale was conducted fairly, the Board will consider all the facts of the sale-such as the sale price, the distribution of the proceeds, and the relationship between the purchaser and any of the owners. Normally, it is very unlikely that there are no owners who objected to the sale. For further details of the requirements of the Strata Title Board on the revision of en bloc cases, please refer to Appendix 2.
2.3 Sale committee
Members of collective sale committee
A collective sale committee shall comprise such number of persons as may be determined in a general meeting convened in accordance with the Second Schedule, but in no case less than 3 members or more than 14 members who are natural persons. The person that eligible for election as a member of a collective sale committee shall be unless he is an individual of at least 21 years of age. The threshold number for that subsidiary proprietor shall be the number of collective sale committee members that is proportional to the subsidiary proprietor's share value, ignoring any fraction, whichever number is the lower (LTSA)(Third schedule)(1).
A person standing for election as a member of a collective sale committee who has any direct or indirect interest in any property developer, property consultant, marketing agent or legal firm, being an interest that could conflict with the proper performance of his functions as a member of a collective sale committee (should he be elected) shall, as soon as practicable after the relevant facts have come to his knowledge, disclose the nature of that interest at a general meeting. (Disclosure of interests). The requirements of the sale committee and information on what are their duties and roles are based on the schedule by the Land Strata Title Act. There are altogether four schedules and are waiting to be revise at the year 2010 (LTSA)(Third schedule) (2).
About the appointment of the chairperson of the sale committee, the chairperson shall be elected from its members. The chairperson has to preside at all meetings of a collective sale committee at which he is present and, if he is absent from any such meeting, the members of the collective sale committee present at that meeting shall appoint one of their number to preside at that meeting during the absence of the chairperson (LTSA)(Third schedule)(3).
At any meetings of a collective sale committee, a quorum shall consist of the majority of the members of the collective sale committee. The decision of the majority of the members of the collective sale committee present and voting at any meeting of the collective sale committee shall be a decision of the collective sale committee. A record shall be cause of its decisions and minutes of its meetings to be kept (LTSA) (Third schedule) (6).
2.6 En Bloc sale by public tender or auction
The collective sale of all lots and common property in a strata title plan shall be launched for sale only by way of public tender or public auction. A valuation report by an independent valuer on the value of the development as at the date of the close of the public tender or public auction shall be obtained by the collective sale committee on the date of the close of the public tender or public auction. The collective sale committee may, within 10 weeks from the close of the public tender or public auction, enter into a private contract with a purchaser for the sale of all the lots and common property in a strata title plan(LTSA)(Third schedule)(11).
2.7 Extraordinary general meeting
EGM is held in between AGMs  , if there are matters which urgently require the MC's decision, the management council can call for EGM.
The council must call and hold an EGM within six weeks if it receives a written request from one or more persons entitled to vote who hold at least 20 percent of the aggregate share value of all the lots; or not less than 25 percent of the total number of subsidiary proprietors of the lots.
If the council does not within 14 days after the date of the deposit of the requisition proceed to convene a meeting, the requisitionists, or any one of them representing more than 30 percent of the total voting rights, may themselves convene a meeting within three months from the date. The Management Corporation is liable to pay for a reasonable expenses incurred in convening the meeting (LTSA) (Second schedule) (Section 84).
2.7.1 General meetings convened by collective sale committee
The collective sale committee shall convene one or more general meetings of the management corporation in accordance with the Second Schedule for the purposes of whether to consider the appointment of any advocate and solicitor, en bloc lawyer, property consultant or marketing agent; the apportionment of sale proceeds; the terms and conditions of the collective sale agreement; update on the total number of subsidiary proprietors who, immediately before the date of the general meeting, have signed the collective sale agreement; to provide information of the sale proposal, sale process and the information on the number of offers received for the collective sale, sale proceeds and distribution methods; and also to consider the terms and conditions of the sale and purchase agreement (Third schedule)(7).
Chapter 3.0 Case Studies - Horizon Tower
3.1 Case Summary
3.1.1 Introduction for Horizon Tower
The case of Horizon Tower saga illustrates some of the loop-holes on the en-bloc scheme. This has been one of the most dramatic and long drawn out en bloc battles in Singapore`s history. Although here were many such cases, Horizon Tower saga stands out from the others as the most appropriate example we could study.
3.1.2 Review of Case
The first factor of the case was that the chairman of the management council and the assistance of substantial financing failed to declare their purchase of additional units in Horizon Towers before they were appointed into the sales committee.
Secondly the appointed marketing agents from First Tree Properties were eager to seal a deal before its mandate as marketing agent expired. They did not give professional advice to the sale committee and did not follow up on another offer from vineyard that was much higher than the initial offer.
Thirdly Strata Title Board did not consider the fact of whether there is a possible conflict of interest in the sales committee members as the members themselves bought additional unit and ignore the offer that was much more of a higher price, which was the best one 'reasonably obtainable'.
For the buyer, HPL sued the sale committee and the majority for failing to file a proper application to the STB.
Finally, the minority owners challenge the sale by appealing to court. The Court of Appeal reversed the sale of Horizon Towers, ending a 2 1/2-year battle over the estate's collective sale. Detail of the case will be provided in the following section.
3.2 Particulars of development & condition of site
Photo by author
Horizon Tower is situated at 15 Leonie hill roads, in a prime residential district 9 of Singapore, built at 30 years ago. It comprises of 210 apartments in two residential apartment blocks of west wind and east wind. When the flats were sold about 28 years ago, each of the owners was granted a leasehold tenure of 99 years. Freehold interest in the land was, however, retained by the developer Horizon Towers Private Limited.
Based on our study, the building last renovation was on 2000. Currently the entire estate was in a poor state of repair. The estate was in a need to be upgraded throughout to comply with the satisfactory-and-modern day standards as the development at Horizon Tower was constructed approximately 30 years ago. Therefore, we can understand that a number of the facility might have been at the end of their useful life cycle due to general wear and tear and it was likely that the state of building is able to meet the requirements of the Singapore authority.
3.3 Reason for en bloc sale
One main reason for Horizon Towers to go for the en bloc sales was the higher development densities for land under the new (URA, 1994). In 1994, under the river valley DGP  , the government revised the horizon tower Gross plot ratio to 2.8. Comparing with the current GPR of 2.072 which is where Horizon Tower stands, there is a 38.4% of increase on the plot of land. Based on some study, the developer have a chance to request URA to revise the GPR to 3.1 - 3.28. Approximately 250 units of new flats each of about 2100 square feet can be built on the land, contrasted with the existing 210 units.
3.4 Judge decision on horizon tower case
Chief Justice Chan Sek Keong and Judges of Appeal Andrew Phang and V. K. Rajah found that the condo's sales committee had breached its duties to unit owners and that the Strata Titles Board (STB) and High Court judge Choo Han Teck had erred in allowing the sale.
Where the sales committee erred
By not acting with due diligence and transparency in appointing the marketing agent, First Tree Properties, which has two shareholders, neither of whom is a licensed valuer. The appointment was done in haste and 'reflected a lack of conscientiousness';
By failing to follow up on a higher offer for Horizon Towers made by Vineyard Holdings, a Hong Kong company;
By not using the Vineyard offer as leverage in negotiations with Hotel Properties Ltd (HPL), the eventual buyer of the estate;
By not getting advice from an independent property expert prior to the sale;
By proceeding with the sale to HPL in 'undue haste' in a soaring property market;
By ignoring conflicts of interest. Two of the sales committee members - Mr. Samtani and Mr. Tan - had bought additional units in Horizon Towers with the help of 'substantial' bank loans right before they were appointed to the committee. They did not disclose these purchases. First Tree was also eager to seal a deal before its mandate as marketing agent expired;
By not consulting, or even updating, the majority owners on the sale, despite knowing that the property boom had pushed up the market value of the individual units and significantly eroded their estimated premiums from the collective sale.
Where the STB erred
By refusing to subpoena Mr. Arjun Samtani to testify;
By allowing the sales committee to assert 'legal privilege', that is, to not divulge the advice it had received from its lawyers;
By not considering whether there was a possible conflict of interest in the sales committee members' purchase of additional units;
By not asking whether the price was the best one 'reasonably obtainable';
By concluding that the original sales committee had 'acted in good faith' in selling the property to HPL just because the committee had received and relied on legal advice.
Where Justic Choo Han Teck of the high court erred
By taking a 'restricted view' of the duties of a Strata Titles Board in approving a collective sale;
By deciding that the only issue to rule on was that of price, and that the STB had determined the price was fair.
By The Straits Times, Apr 05, 2009
Detail on Judge Decision See Appendix 3
3.5 Problems identified
3.5.1 Time Problem
The pricing on the sale was advice by the First Tree Properties on April 2006. But the sale was actually confirmed on January 2007. The valuation itself was outdated and does not reflect the market price of the site. The new valuation report is then done after the developer accepted the deal.
3.5.2 Momentary problem
The sale committee and the marketing agent did not consider the higher bidder when the developer, Vineyard offered a much higher price for the en bloc sale. This was a breach of the duty of good faith. Prior to that, the marketing agent also did not advise the sale committee on the option of another price for the sale. Referring to (LTSA) good faith" in s 84A (9) (a) (i) (A) this is not merely confined to whether the sale price is fair or not, but also how the price is arrived at.
The marketing agent from First Tree Properties wanted to complete the whole process as their mandate for property agent will be expired soon. Therefore, they ignored the Vineyard offer which is higher than the initially agreed price with HPL. One of the main reasons is that they get their salaries from the sale, which have nothing to do with the choice of buyer.
3.5.3 Problem with the Procedure
With reference of the case, one of the problems of the procedure is that the sale committee did not get advice from any independent property expert prior to the sale. They did not consult or update the majority owners on the current situation of the sale, despite knowing that the property boom had pushed up the market value of the individual units and therefore, significantly eroded their estimated premiums from the collective sale.
3.5.4 Problem in the Sale Committee
The Sale Committee actually breached all the duties under the rules and regulations of Strata Tile Board. They are:
(a) The duty of loyalty or fidelity;
(b) The duty of even-handedness;
(c) The duty to avoid any conflict of interest;
(d) The duty to make full disclosure of relevant information; and
(e) The duty to obtain the best price for the properties of the subsidiary proprietors
During the en bloc process, the Sales Committee member actually purchased an additional unit in Horizon Tower without declaring this piece of important information to the subsidiary proprietors in conjunction of their second breach of duties, ignoring the Vineyard offer.
Strata title board has made a mistake on allowing the sales committee to assert 'legal privilege', that is, to not divulge the advice it had received from its lawyers. The STB failed to question the sale committee on whether the price offered was the best one 'reasonably obtainable'.
The board of Horizon Tower has applied wrong legal test for conflict of interest. The correct question to ask was whether there was a possible conflict of interest, concluding that the original SC had acted in good faith in selling the Property to HPL.
Chapter 4.0 - Problems and Implications of En Bloc
4.1 Minorities Rejecting the En Bloc
Usually, in en bloc sale, there are always unhappy owners who appeal to the court for objection to the en bloc sale. They are the minorities in the en bloc sale. They are the owners who are being forced by the majority to go for the en bloc because of the 80 percent and 90 percent consent rule.
The sale of the en bloc might be affected because of the minorities. The time taken for the en bloc sale to proceed may be delayed because of the minorities challenging the authority on the en bloc sale. The money involved in the beginning phase of en bloc and the opportunity cost that the developer had will be lost if the minorities successfully reversed the sale (Christudason, 1998).
Originally, as stated from (Strata Title Board, 84(A)(4), 84D(3), 84E(5) and 84FA(2), owners can raise objection to the en bloc sale if the owners satisfied the requirements set by the board. We can see that objection or the approval of the en bloc is handle by STB, but still, from the case of Horizon Tower, owners took the case to the court, which involves a great deal of time, money and effort. This somehow becomes one of the risks that developers would need to consider.
4.2 Pro En Bloc Subsidiary Proprietors
Pro En Bloc subsidiary proprietors are the owners that are very supportive of the en bloc and their aim is to get the majorities support in the en bloc sale, regardless of the interest of the minorities.
They are known to run the estate down, exaggerating defects in the estate, making majorities thinking that the estate is not appealing at all and en bloc shall be the only solution. These committee may even increase maintenance fees/sinking fund contributions to pressure the other owners to sign the Collective Sale Agreement.
Relationship strained between neighbours, properties and assets owned by the owners are being damaged, owners suing each other as their patience starts to run out. This implication shows the ugly side of en bloc.
What we are considering as a solution to this situation is that owners of the majority which have given consent to the en bloc, especially the sale committee should take time to follow up with the minorities whom have not given consent to the en bloc. Solutions to the problem of minorities can create a better relationship between the owners and this can ensure that the en bloc process may be smoother and easier.
4.2 Property Prices
When an owner received its portion of the sale proceeds from the en bloc sale, most of the owners would have earn a profit from the sale. But problem arises when owners find themselves having trouble of buying back the same unit on the same land after the redevelopment of the land. The prices of the property or land now increase much more than what the owners have earned from their profit from the sale, therefore forcing the owners to look for other private properties which they can afford or to change their target to government flats, HDB. (Fiona Chan & Joyce Teo, 2007, the Straits Time)
Referring to the case of Horizon Tower, this scenario became one of the possible reasons that why the owners whom have agreed with the en bloc decide to default the en bloc sale. First, as more estates are snapped up at ever-rising prices, selling your home too early may mean a lower payout, as the owners of Horizon Tower discovered to their chagrin.
"When they sold their development in January for $500 million, it was the biggest en bloc deal ever, netting most owners $2.3 million each.
But barely three months later, Grange ford Apartments next door - with mainly smaller units - went on the market at a price that would yield each unit owner at least $3 million.'' (Fiona Chan & Joyce Teo, 2007, the Straits Time)
This simply means that the owners in Horizon Tower felt short-changed because of the market fluctuations for properties. It is very difficult to anticipate the real estate market.
Under the new amendment, Strata Title Board will be empowered to issue a `stop order` to cease mediation. Once it has become clear that the affected owners want adjudication to be done in Court. The proposed change of the en bloc rule is to prevent owners that are keen to bring the case to court and to prevent the similar long drawn process - Horizon Tower.
One of the implications of en bloc is about how the society looks at en bloc. En bloc means to redevelop a building or a land for urban renewal, but the society looks at the profit that they can earn from en bloc rather than the project. They have treated a piece of real estate as a money making agent instead of as a shelter.
4.5 Freedom of choice
The minorities that object to an En Bloc have their difficulties in challenging the sale as the majority has rule the sale to proceed based on the voting process. As there is no 100 percent agreement for an En Bloc to proceed, the minorities have limited choice to object to the sale.
Another simple case is the relationship between tenants and landlords. When the landlord has receive information on the collective sale of his property, the landlord would increase its rental as he or she knows clearly that the sale would definitely bring him profit, regardless of whether the tenant wanted to continue the tenancy with the landlord.
Besides looking at the tenancy problem, owners themselves often have to face a certain pressure by the sales committee for their aim is to get enough signatures for the en bloc. The sales committee became more aggressive in bringing about a sale instead of fulfilling the requirements of a good faith as they started to desperately ask for signatures from the other subsidiary proprietors.
4.6 Interest of the minorities
Usually, the minorities have its own interest/reasons to object to the en bloc. Be it personal interest, location of the unit, whether the place has been very convenient for them, or simply because they love their homes. But in en bloc, the majority, as investors, they normally overlooked the point of how the minorities treat their homes. This is the most common implication of the en bloc.
The government plays a rather important role in En Bloc as the rules and regulations that are set have to protect the minorities and of course not to stop the en bloc process as en bloc is another means for developers to get land, instead from the Government Land Sale (GLS) programme.  The government will be blamed if any rules are biased against each party, the pro en bloc committee or those anti en bloc committee.
Currently, the number of en bloc cases that STB is handling now has decrease, as the parliament released stricter en bloc rules and regulations. This has become one of the factors why the developers are slowing down in collective sale.
The time taken for en bloc spans a long period, roughly 1 - 2 years. This period of time is crucial for the developer as the real estate market is very buoyant, making the market hard to predict. During the period of en bloc, the market might come down or the demand for property might decrease, making the developers' aim to earn profit from redeveloping the target land a waste.
After a thorough study of current examples of cases which directly or indirectly linked to en bloc, we have concluded that there is a need for a clearer view of the en bloc rules, and also on the procedures of en bloc. We have come to a conclusion that the parties involved in the procedure of en bloc should be clear about their position and roles, and they themselves should not breach any of their duties. This is very important as referring to the case study of Horizon Tower, the problems that occurred from this en bloc case is the consequences of unprofessionalism, beaching of their individual duties, and an act of self-interest.
There is a need to ensure fairness and to keep up to the rule of good faith. On the surface, owners who spent the time to sell their units through en bloc has received monetary value that appears to be lucrative, the society has actually overlooked on the problems that occurs during the process of en bloc, the implications that happens right after the en bloc, and the rights of the minorities, whether they can forgo their homes, because of meeting the requirements of signatures collected to proceed with the sale.
If the parties involved in the en bloc sale has done their job and has not breach any of their duties, the number of problems presented in the en bloc sale will be lesser.
The sudden boom on the property market in Singapore has lead to a sudden surge of en bloc sales being made in 2007. Therefore, the sales committee will take advantage of the market situation and try for an en-bloc sale, most of the time overlooking on the issues from the minorities, and other legal problems that may occurs. This will definitely cause unhappiness among the owners because they are not receiving the right information on the en bloc sale, or they are being pressure to sign the collective sale agreement.
Owners themselves have to be clear about the process and the procedure of en bloc. They should state clearly their own reasons why they should or should not participate in the en bloc sale. They should also take the initiative to keep up with the current updates on the market, at which stage has the en bloc arrived at, and to clarify any doubts with the sale committees.
These factors are important and essential to ensure that the en bloc proceed on smoothly.
Uma Shankari, (2010) Developers' land banks running low, The Business Times 5 April 2010
Low, S. P. (1999) Success factors for managing En Bloc property transactions. Property Management, 17(1), 37-48.
84A(9) of the Land Titles (Strata) Act (Cap 158, 1999 Rev Ed) ("LTSA"),
Chuang Peck Ming (Wed, May 19, 2010) Changes to en bloc rules passed by Parliament, The Business Times
(MOL) Minister Of Law Retrieved on June 2nd 2010. from http://app2.mlaw.gov.sg/UsefulInfo/EnBlocSales/tabid/287/Default.aspx
Singapore Expats Sale & Leasing Retrieved on June 2nd 2010. From http://www.singaporeexpats.com/singapore-property pictures/condo/horizon-towers.htm
URA (Urban Redevelopment Authority)(1994). River Valley Planning Report DGP 1994 P17
The Land Titles (Strata) Act (1988). The Land Titles (Strata) Act (CAP 158). Revised Edition 1988, Singapore.
The Land Titles (Strata) (Amendment) Act (1999). The Land Titles (Strata) (Amendment) Act, 1999, Singapore.
The Land Titles (Strata Titles Board) Regulations (1999). The Land Titles (Strata Titles Board) Regulations, 1999,
Strata Title Board Retrieved on June 4th 2010. From http://www.mnd.gov.sg/stb/abtus1.html
The Straits Times, (Aug 7, 2007) Horizon Towers' failed buyers allege breach of contract
Business Times (Aug 31, 2007) Horizon Towers saga reaches a turning point
The Straits Times (28 Jan 2010) Horizon Towers saga roars back to life with new lawsuit
Channelnewsasia, (Oct 11, 2007) Horizon Towers' majority owners win appeal against Strata Titles Board
The Straits Times, (Apr 05, 2009) The Appeal Court judgment
Christudason, A. (1998). Safeguarding minority interests in en bloc sales. Conference on en bloc sales: What's the future? Singapore.
Quek. (2010, July 21). New rules come into effect today. Today Newspaper.
84A (9) (a) (i) of the Land Titles (Strata) Act (Cap 158, 1999 Rev Ed) ("LTSA"),
Cite This Essay
To export a reference to this article please select a referencing stye below: