En bloc sale framework recalibrated as urban renewal ‘not merely desirable, but really imperative’: Edwin Tong

“And having a differentiated approach with different criteria itself then leads to even more complexity, and inherently more uncertainty for the collective sale scheme.”

He added that data from recent successful collective sales showed that a significant majority of signatures were typically gathered within the first four months, with several large developments reaching the 70 per cent threshold within six months.

Tong also noted that preparations begin before the formal signature collection period, with general meetings held and terms, such as sale proceeds, pricing and conditions, discussed beforehand.

Collective sale committees could use this period to gather and share information with owners, including those based overseas, he added.

The Bill also proposes that objectors could receive slightly higher sale proceeds, with the limit on court-ordered increases raised from 0.25 to 0.5 per cent of the sale proceeds for each unit, or S$2,000 for a unit, whichever is higher.

This provision was first introduced in 2007 as a protection for objectors, and applies where the High Court is satisfied that it would be “just and equitable to order an increase in the proceeds of sale to be received by the objectors”.

It would apply in cases such as the objecting owner having invested significantly in renovation works just prior to the collective sale exercise.

MP of Potong Pasir single-member constituency Alex Yeo asked whether homeowners who object to an en bloc sale can be exempted from Seller’s Stamp Duty (SSD) if the sale takes place within four years of their property purchase, particularly if they had bought their homes before the lower consent thresholds were announced.

Tong said that SSD serves a different policy purpose from the collective sale regime, as it is intended to discourage short-term holding of residential properties and curb speculative activity.

“Owners who participate in a collective sale may incur SSD if the sale occurs within the applicable SSD holding period, which ranges from three to four years, depending on when the property was acquired.”

He added: “For a collective sale to succeed, the collective sale agreement will have to account for any such stamp duties or any other deductibles, for that matter, payable by non-consenting owners when determining the apportionment of sale proceeds.”

Stock of private developments has aged

Speaking during the second reading of the Bill, Tong said that Singapore’s stock of private developments has aged since the collective sale regime was introduced in 1999, and maintenance costs have risen significantly.

Around one in 20 non-landed private residential units are now aged 40 years or older, amounting to some 20,000 units in close to 250 developments.

Since 2023, the government has engaged a broad range of stakeholders to better understand the issues with the current framework, he added.

Two clear threads emerged from views shared.

“The first was a call to update the consent thresholds to facilitate the renewal of older developments,” he said.

Reading out feedback from an owner, which he noted “sums up the issue quite succinctly”, Tong said: “While the existing two-tiered consent thresholds were novel, innovative and necessary in 1999, conditions have changed since then. It cannot be right that a 10-year-old development and a 44-year-old development continue to face the same threshold.”

Owners were also worried about “being subjected to repeated and protracted collective sale attempts that disrupt the community that is in the condominium, and create prolonged uncertainty”.

“The lower consent thresholds make broad-based renewal more accessible for genuinely ageing developments where there is support among the owners,” he said.

“At the same time, the higher initiation threshold, shorter signature window and extended restriction period ensure that the framework cannot be used to mount repeated, disruptive attempts in developments where there is insufficient majority support.”

The collective sale regime will also be extended to non-strata-titled private residential developments, where flat owners hold a leasehold tenure of less than 850 years in their units, but do not own the underlying land.

These include large developments such as Neptune Court, One Tree Hill Mansions, Paterson Court, Orchard Court and Townhouse Apartments, all of which are more than 40 years old and sit on land owned by the Minister for Finance (MOF).

MOF (Inc) is prepared to divest its interest in these developments at fair market value, said Tong.

The Bill, an amendment to the Land Titles (Strata) Act, was first tabled on Aug 4, about a week after changes to the additional buyer’s stamp duty (ABSD) regime for buyers of large en bloc sites.

Those changes give developers of such plots more time to complete construction and sell all units, before having to pay ABSD on the land cost.