About Enbloc Sale
What is Enbloc Sale?
An en bloc sale, or collective sale, is the sale of an entire private strata development by way of majority consent and is governed by the Land Titles (Strata) Act.
Thus, an Enbloc Sale simply means: most of the owners of separate units in an apartment, condominium or even an office building, coming together to collectively sell their properties to a developer for comprehensive redevelopment.
If there is unanimous consent to sell the development, the laws governing en bloc sales will not apply.
Why Enbloc Sale?
- Enbloc Sale allows Owners to sell their properties at a price that is usually much higher than they could fetch by selling individually in the open market.
- Enbloc Sale allows Owners to convert the unused land or development potential in their property development into cash.
- Enbloc Sale also allows Owners to cash out of their property investment for other newer and larger properties or re-invest in other forms of higher yield investments.
- Form a Sale Committee.
The law requires that only one sale committee be elected for each development and that sale committee must follow certain procedures as stated in the law.
- Owner’s Consent
Once a sale committee has been formed, owners will indicate their consent to the en bloc sale by signing a Collective Sale Agreement (CSA). The majority consent by share value and strata area must be obtained within one year before the sale attempt can proceed further. The majority consent levels are:
- For developments less than 10 years old – at least 90% by share value and strata area or
- For developments 10 years and older – at least 80% by share value and strata area
- Find a Buyer
When majority consent is obtained, the next step is for the sale committee to find a buyer. To ensure transparency, this must be done through a public tender exercise. When a buyer is selected and the sale agreed upon, an application must be made to the Strata Titles Board (STB) which will consider the application and deliver a decision on whether the sale will go through.
- STB Approval
When an application for an en bloc sale has been made to the STB, the owners who do not consent to the sale can raise objections to the STB. The STB is required to consider these objections before deciding on the outcome of the application for sale. Any party dissatisfied with the STB’s decision can challenge the decision through the judiciary’s appeal system.
It typically takes at least one year after the collective sale process has commenced before the transaction is completed and up to another six months before the sale proceeds are distributed out.
Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
AsianPrime Properties Pte Ltd (L3010623G)
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