Lower collective sale thresholds address upkeep cost of old properties, facilitate renewal: Edwin Tong

The lifecycle costs of major building components compound this challenge, said Tong, who cited the estimated cost of modernising a lift shaft, which starts from $120,000, or a full replacement, which costs $200,000 to $300,000 per lift.

Such costs will weigh on the development’s sinking fund, Tong said, and become a real and growing burden for owners, who at some stage may want to “pursue renewal” but find themselves unable to because of the existing collective sales framework.

Changes to the law

The legal amendments passed by Parliament on Sept 8 fall into two broad categories – supporting the redevelopment of ageing developments, and strengthening safeguards for non-consenting owners.

The revised voting thresholds fall under the efforts to support redevelopment of older properties.

Tong said that the rationale behind the age bands is straightforward – “the older a development, the more acute its maintenance challenges are likely to be, and the stronger the case for enabling renewal”.

As for protecting non-consenting owners, Tong said three safeguards will be rolled out.

First, the agreement of 35 per cent of owners by share value or number of units will be required to convene an Extraordinary General Meeting for the formation of a Collective Sale Committee, up from the current 25 per cent.

Tong said this ensures that collective sale exercises are initiated only when there is serious intent and support, which reduces the risk of owners being subjected to a prolonged and disruptive process that is not likely to succeed.

Second, the window for a Collective Sale Committee to obtain signatures for a Collective Sale Agreement will be shortened from 12 months to six months.

Acknowledging that this is a period where owners can be subject to significant pressure – either from fellow owners or from professionals appointed in a collective sale – to sign the agreement, Tong said the shorter window provides greater certainty to all owners.

Third, the restriction period after a failed collective sale attempt will be extended to three years, up from two years currently.

During the restriction period, the first attempt to form a new Collective Sale Committee will require the approval of at least half the owners by share value or number of units, while second and subsequent attempts will require 70 per cent consent for developments aged 40 to 59 years, and 65 per cent for those aged 60 years and above.

Tong said this gives owners a longer window of certainty, while “preserving a route forward if sufficient support genuinely subsequently emerges”.

Concerns over 6-month signature window

The 10 MPs who rose to speak on the proposed changes were largely concerned with two issues – the adequacy of the six-month window for signature collection, and safeguards for non-consenting owners.

Several, including Fadli Fawzi (Aljunied GRC), Wan Rizal Wan Zakariah (Jalan Besar GRC), Ang Wei Neng (West Coast-Jurong West GRC) and Lee Hong Chuang (Jurong East-Bukit Batok GRC) questioned the adequacy of the six-month period, especially for larger developments with more units.

For instance, Wan Rizal said that a development with several hundred units, owners who are constantly overseas and elderly owners who might require assistance with the voting process may find it challenging to meet the timeline.

He said an unrealistically short period could create pressure to obtain signatures quickly, increase tension between neighbours and reduce time available for owners to understand the valuation, method of apportionment and replacement housing implications.

Addressing these concerns, Tong said while the merits of a differentiated signature collection period were considered, the six-month period would “drive parties to help to focus their minds on the collective sale decision and avoid the process from being too protracted”.

Others like Alex Yeo (Potong Pasir) and Yip Hon Weng (Yio Chu Kang) proposed introducing more safeguards, such as providing advice and support to home owners – especially seniors – on matters including their rights and relocation prospects.

In response, Tong said that much of this information and support already exists, adding that the Government will consider if more support may be necessary. He said legal support resources are available to members of the public generally, including at Pro Bono SG’s community legal clinics, and added that laws governing collective sales require that individuals standing for election as a member of the collective sale committee must declare their own position and potential conflicts of interest.

Speaking on the amendments, WP Non-Constituency MP Andre Low said that recent debates over Maju and Gillman forests have shown how much Singaporeans care about natural spaces, and that the country should thus “examine how much more we can accommodate on land that we have already developed before accepting the loss of places that would be difficult to replace”.

Asked by Tong if he would agree that the issues such as Gillman, Maju and the planned western island – which Low had also mentioned – have nothing to do with the use of land arising from collective sales, Low said he would not agree with that “definitive statement” and that he believes the two issues are linked, albeit not directly.