As mentioned, the closure of an en bloc sales usually takes around two years – due to the complex processes behind such collective sale.
Here are the few essential steps that one needs to follow when applying for en bloc:
Step 1: Establishing A Collective Sale Committee
Owners who are interested in selling the property will come together to form a Collective Sale Committee (CSC).
This committee is responsible for proposing the reserve price of the property, and collecting signatures from owners who agree to the en bloc sales.
To form the CSC, a General Meeting must be held – which can be done by collectively getting approval from at least 25% of the owners in the development OR getting owners with a combined share value of 20% to agree.
During the formation of the CSC, the elected candidates shall be transparent with their potential conflicts of interest as this may affect the en bloc sales in the future.
Step 2: Getting External Help
Once the CSC is formed, they will start consulting property agents and lawyers to get an independent valuation report, to determine the proceeds of the sale, and get a clear idea on what kind of process they need to follow ahead.
Step 3: Getting Votes
The CSC will have to get owners to sign on the Collective Sale Agreement (CSA).
If the development is ten years and older, at least 80% of share value and strata area are required to be in favour of the sale.
However, if the development is less than ten years old, the committee needs to get consent from at least 90% share value and strata area. En bloc can only proceed after reaching such requirements.
According to the Land Titles (Strata) Act :
· Developments < 10 years old – require at least 90% by share value and strata area
· Developments > 10 years old– require at least 80% by share value and strata area
*i.e. 80% of share value refers to 80% of what the entire development is valued at while 80% of strata area refers to 80% of the total area of the development.
Step 4: Finding A Buyer
If the development does not have a current buyer, it will be placed on the market for interested developers to bid for it.
Homeowners may advertise the en bloc of the development following the guidelines here.
Step 5: Informing Strata Titles Board
After getting the owners to sign on the CSA, the CSC must apply to the Strata Titles Board.
In the event where there are objections, the Strata Titles Board will decide if it is possible to proceed with the en bloc sales.
The board helps to evaluate whether this sale will be profitable(or not) for all unit owners.
With the report provided by the Strata Title Board, the CSC can take a better course of action regarding the sale of the development.
Step 6: Handing Over The Penrose showflat location
After a successful en bloc, the existing owners are given a grace period to move out of their property or make necessary arrangements with their tenants.
Readmore: How Does En Bloc Work In Singapore