Matters under LTSA

Matters under LTSA

Steps relating to an application under Part VA of the Land Titles (Strata) Act

COLLECTIVE SALE

Land Titles (Strata) Act

What is a collective sale

A collective sale, also known as an en-bloc sale, is a sale of two or more property units to a common purchaser. A common en-bloc scenario is one where all the units in a strata-titled development are sold to a developer and proceeds are 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.

There must be a majority consent among the owners to sell the entire strata development. The process follows the guidelines laid down in the Land Titles (Strata) Act.

Note: Strata Titles Boards only deals with en-bloc of a property - where all the units in a strata-titled development is sold to a developer with less than 100% consent.

En-bloc sale by majority consent

An en-bloc sale is governed by the Land Titles (Strata) Act. The sale is to be supported by the requisite majority consent under the Act:

  • Developments less than 10 years old – at least 90% by share value and strata area

  • Developments 10 years and older – at least 80% by share value and strata area

Under section 84A of the Land Titles (Strata) Act, the owners can apply for an order of en-bloc sale from the Strata Titles Boards or the High Court after obtaining the requisite statutory majority consent.

Note: In applying for an en-bloc sale, the age of a development is determined with reference to the date of issue of the latest Temporary Occupation Permit (TOP) or Certificate of Statutory Completion (CSC) if no TOP was issued.

GENERAL INFORMATION ON STARTING A COLLECTIVE SALE

The information below is for general information only and should not be relied upon as legal advice for any specific matter or case.

Collective Sale Committee

The starting point in an en-bloc sale attempt is for owners to elect a Collective Sale Committee at a General Meeting. Requisition for the General Meeting requires at least 20% of share value or 25% of total number of subsidiary proprietors’ votes. Responsible committee members should be appointed from owners across all types of units in the development.

At the time of electing committee members, candidates should make full disclosure of any actual or potential conflicts of interest.

The Second and Third Schedule governs the proceedings of the sale committee.

Requisite majority

Once a Collective Sale Committee has been formed, the sale committee should propose a reserve price in the Collective Sale Agreement (CSA) and collect signatures to the CSA from owners agreeing to the en-bloc sale. The requisite majority consent by share value and strata area (80% or 90% majority depending on the age of the development) must be obtained within one (1) year before the sale attempt can proceed further.

Professionals

The Committee is to seek professional advice from property consultants and lawyers, as well to obtain an independent valuation report from an independent valuer.

Sale of development

When majority consent is obtained, the next step is for the sale committee to find a buyer through a public tender exercise where interested developers will submit their bids.

Preparations for application to the Strata Titles Boards

When a buyer is selected and the sale is agreed upon, an application may be made to the Strata Titles Boards to seek approval for the en-bloc sale. At this stage, owners who do not consent to the en-bloc sale can raise valid objections. The Board is required to consider these objections before deciding on the outcome of the application for sale.

PROCEEDINGS IN THE STRATA TITLES BOARDS

The Strata Titles Boards was established to mediate and hear an en-bloc application when it is made to the Board pursuant to the Land Titles (Strata) Act. Strata Titles Boards are tribunals and are not able to provide legal advice nor comment on any matter which may potentially be heard before the Board. Parties must seek independent legal advice or refer to “Part VA – Collective Sale of Property” under the Land Titles (Strata) Act for more information on en-bloc sales.

Applications will be heard by a three (3) or five (5)-member Strata Titles Board, presided by the President or one of his Deputies.

A minority owner (i.e. unit owner who has not agreed to the sale in writing) may file an objection to the Strata Titles Boards using the prescribed form within 21 days after the notice of proposed application has been served on all owners.

Where no objection is filed against the en-bloc application, the Strata Titles Board will fix a date for a hearing to determine that the en-bloc sale transaction is in good faith. Please see details under hearing.

Where objections are filed against the application, the Board would mediate and assist parties to resolve the dispute. Please see details under mediation.

STEPS RELATING TO AN APPLICATION UNDER PART VA OF THE LAND TITLES (STRATA) ACT

Below are general steps on filing an en-bloc sale application to the Strata Titles Boards as taken from the Land Titles (Strata) Act.

The information below serves as a general guide and should not be taken as formal legal advice. The Board does not provide legal advice on any matter which may be potentially heard before it. Subsidiary proprietors should seek independent legal advice should they have queries on the en-bloc sale.

STEP 1: BEFORE FILING AN EN-BLOC APPLICATION

Pre-conditions for applications to the Strata Titles Boards

Before filing an en-bloc sale application to the Strata Titles Boards, majority owners must fulfil the statutory requirements under the Land Titles (Strata) Act.

  1. General meetings in accordance to the Second Schedule

    The duly constituted collective sale committee should hold and conduct general meetings pursuant to the Second Schedule in relation to the en-bloc sale.

    [The Second Schedule]

  2. Collective Sale Agreement

    Owners will signify their consent to the en-bloc sale by signing the Collective Sale Agreement (CSA). The signing of the CSA by the last of the flat owners who make up the relevant majority flat owners referred to in section 84A(1), 84D(2) or 84E(3) must not be later than 12 months from the first execution of the CSA by a flat owner.

    The relevant majority flat owners must find a purchaser and apply to the Strata Titles Boards within 12 months of successfully getting the CSA executed by the minimum required number of flat owners to make up the relevant majority.

  3. Appointment of Applicants in the Strata Titles Boards proceedings

    Appoint not more than 3 owners from the collective sale committee to represent the majority owners in connection with the en-bloc sale application. They are known as the Applicants for the purpose of the Strata Titles Boards’ proceedings.

    [Section 84A(2)]

  4. Notice specifying number who signed the Collective Sale Agreement

    Affiex a notice in the 4 official languages of the number of lots and subsidiary proprietors who signed the CSA and the proportion that the total share value and the total area of the lots of the subsidiary proprietors’ lots bear to the total share value and total area of all lots comprised in that strata title plan. The notice should be affixed to a conspicuous part of each building in the development.

    Flat owners of the development must be updated every 4 weeks (starting from the first execution of the CSA by a flat owner) on the number and percentage of flat owners who have signed the CSA.

    The notice and updates should be affixed to a conspicuous part of each building in the development.

Note: An owner who has signed the CSA may rescind his/her agreement by serving a notice of rescission during the five (5) day cooling-off period (excluding Sat, Sun or public holiday, after the day on which the CSA was signed by him/her). See Forms for a copy of notice of recission.

  1. Valuation report

    Obtain a valuation report from an independent valuer on the value of the en-bloc sale site as at the date of the close of the public tender/auction.

    [The First Schedule, para. 1(e)]

  2. Proposed method of apportionment of sale proceeds

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

    [The First Schedule, para. 1(e)]

    More information on recommendations on distribution method may be referred to the Singapore Institute of Surveyors and Valuers (SISV). In the event of a disagreement in valuations, the dispute may be referred to SISV.

  3. Advertisement

    Advertise in the 4 official languages the particulars of the proposed application in the local newspapers. The advertisement should follow the approved format under the Land Titles (Strata) Act.

    [The First Schedule, para. 1(d)]

    The advertisement must include:

    1. information on the development;

    2. brief details of the sale proposal; and

    3. the place at which the relevant parties can inspect documents for the en-bloc sale.

    [The First Schedule, para. 9]

  4. Notice of the proposed application

    All abovementioned documents should be ready prior to the preparation of this notice.

    Serve a notice of the proposed en-bloc sale application on all the unit owners by registered post and on 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.

    Serving the notice:

    1. 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;

    2. 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;

    3. 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

    4. where the party is a management corporation, at its address as shown in the Singapore Land Authority.

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

    The notice must be accompanied by the relevant documents:

    • the advertisement;
    • the Collective Sale Agreement;
    • the Sale and Purchase Agreement;
    • a statutory declaration of purchaser on his relationship, if any, to the unit owners;
    • minutes of general meetings
    • valuation report with supporting evidence and details of calculations; and
    • report by an independent valuer on the method of distribution of proceeds of sale.

    A copy of the notice, in the 4 official languages, should also be affixed to a conspicuous part of each building in the development.

    [The First Schedule, paras. 1(e) and (h)]

STEP 2: FILING AN APPLICATION

If you are intending to file an application at the Strata Titles Boards, please ensure that you have ready the following items:

  1. Application form and supporting documents – 6 copies

    • Application form – Form 21 (PDF, 1.05 MB)

    An application for en-bloc sale must be made using the approved Form 21 within fourteen (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. 6 copies of the application and all documents are to be submitted at the Strata Titles Boards office.

    The application must include the following documents:

  • Application form
  • Notice of Proposed Application to STB
  • Advertisement (application to the Strata Titles Boards must be made within 14 days of the newspaper advertisement)
  • collective Sale Agreement
  • Sale and Purchase Agreement
  • Statutory declaration of purchaser on relationship to subsidiary proprietor
  • ACRA search of purchaser and corporate shareholders
  • Minutes of general meetings
  • Valuation report from independent valuer (with supporting evidence and details on calculation)
  • Report by independent valuer on the proposed method of distributing the proceeds of sale
  • Schedule of owners and other encumbrances
  • Undertaking to pay costs of the Board (in relation to any valuation or other reports called for by the Board)

Note: Where a seller stamp duty is applicable for a property, kindly submit together with the application the Certificate of Stamp Duty.

Brief description of documents can be found under “Step 1: Before filing an en-bloc application”. Full details can be found in the application Form 21 (PDF, 1.05 MB).

Reference is to be made to the Land Titles (Strata) Act and the First Schedule.

The relevant forms can be downloaded under Forms. Alternatively, hard copies of the forms can be obtained from the Strata Titles Boards’ office during office hours.

If you are submitting an en-bloc application, ensure that all supporting Annex are tabbed. For consistency and identification, binded applications are to be binded in red.

To find out more about the 2010 amendments to the Land Titles (Strata) Act, reference should be made to the Land Titles (Strata) Act, the 2010 Amendment Act and the Land Titles (Strata) Act Order 2010.

  1. Application fee – S$5000

    Pursuant to the Building Maintenance and Strata Management (Strata Titles Boards) Regulations 2005, an application fee of S$5000 is payable for an en-bloc sale application made to Strata Titles Boards.

    Payment of application fee can only be accepted via Paynow and electronic payment (Internet Bank Transfer).

After filing an application

Applicants must complete the Affidavit of Service for Form 21 – Form 21A (PDF, 652 KB) and return the duly completed affidavit of service to the Strata Titles Boards.

If there are objections filed by minority owners to the Strata Titles Boards, the Board will within five (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.

After submitting the application at the Strata Titles Boards, the Applicants must lodge a copy of the application for registration at the Singapore Land Authority. For more information on the the registration process, please refer to the Singapore Land Authority’s website where a copy of the forms can be downloaded http://www.sla.gov.sg.

STEP 3: CONSTITUTION OF A BOARD

A three (3) or five (5)-member Board will be convened by the Strata Titles Boards to mediate and/or hear the case.

All parties will receive a Notice of Constitution of a Strata Titles Board constituted to hear the application. All parties will have up to seven (7) days from this notice to object, in writing, to any Board member on reasonable grounds, such as conflicts of interest. Objection to any Board member will be submitted for the President’s consideration.

STEP 4: NOTICE OF MEDIATION DATE

Applicants and Objectors, if any will be issued a Notice of Mediation informing parties of the mediation date to attend before the Board. Parties must attend the mediation.

No fees are payable for the first two (2) mediations.

Mediation and arbitraion fees are payable by the Applicant for the third and subsequent attendance before the Board. Please see Fees for the mediation/hearing fees specified in the Schedule of the Building Maintenance and Strata Management (Strata Titles Boards) Regulations 2005.