COLLECTIVE SALE DISPUTES IN RESIDENTIAL DEVELOPMENTS: BEYOND THE HORIZON

Abstract

The year 2015 marks the Golden Jubilee of Singapore, 50 years of independence since 1965. The country has transformed from a third world slum to a first world city with modern high-rise residential estates. Given Singapore’s inherent land scarcity issue, the planning authorities are compelled to allocate land judiciously. Constant revisions of the Master Plan were required to meet the increasing need for housing for a burgeoning population. The increase in plot ratio and building heights unlocked the development potential of many plots of land in Singapore and led to the collective sale phenomenon. The purposes of collective sales are to facilitate optimal land use and promote urban rejuvenation. Prior to the amendments of the Land Titles (Strata) Act in 1999, unanimous consent among all owners was required before a collective sale could be successful. This led to failure of many proposed collective sales when a single owner or a group of minority owners did not consent. After the amendments, the unanimous consent requirement was replaced by just a majority vote. This resulted in the erosion of property rights of the minority and a myriad of objections being lodged before the Strata Titles Board (STB) and appeals to the Courts. This paper will seek to examine the legal issues related to residential collective sales in Singapore. Through the in-depth analysis of cases, an evaluation of the current legal provisions within the Land Titles (Strata) Act (LTSA) utilized to safeguard minority owners will be derived. The research methodology also included a questionnaire survey of residents living in strata developments, interviews with property owners who underwent a proposed collective sale and interviews with property consultants experienced in collective sale transactions. The results conclude that the main troublespots pertaining to legal issues of collective sales revolve around the duty of “good faith” and “incentive payments”. The duty of “good faith” factors the sale price, method of distribution of sale proceeds and relationship of the purchaser to any owner. The issue of incentive payments include the manner of such payments and the majority consent being achieved. Arising from these troublespots, the recommendations are to involve members of the STB from the outset of the collective sale and to provide monetary compensation and assistance for the relocation of the property owners.