With many HDB flats in matured estates reaching the 99-year lease hold period, it becomes tempting to speculate which ones are up for an en bloc sale.
The tendency for properties that go en bloc to have a large selling price is usually high. As a result, people tend to view an en bloc sale as a potential get rich quick scheme.
The development does not simply go en bloc the moment the tenure is up though; there are a series of processes that must occur before the development is successfully drafted for the sale and eventual redevelopment.
The first thing that happens is the formation of a sales committee. Each development selected for en bloc is privy to only one committee by law.
Once the committee is formed, all owners will sign a Collective Sale Agreement (CSA) as a legal indication of their consent.
The development is placed for en bloc sale based on percentage of share value and strata area.
Developments that are less than 10 years old must have 90% overall vote in favour of the sale.
Developments that are 10 years and older must have at least 80% overall vote in favour of the sale.
The committee must follow the procedures as stated by law.
If majority consent is given, the sale committee must then find a buyer through a public tender exercise. Once the buyer and sale is agreed upon, an application will then be made to the Strata Titles Board (STB).
The STB will be the final decision maker on whether the sale goes through.
Owners whom did not consent to the sale but were out voted can now raise objections to STB. The board is required by law to consider these objections before making a final decision regarding the sale.
Should STB decide in favour of the sale, disgruntled parties can dispute the decision through the court appeal system.
The entire collective sale process usually takes at least one year for the transaction to be completed. Following that, it may take up to another six months before the owners receive the sale proceeds.
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