En-bloc disputes
Your apartment is old and in a state of disrepair. Someone comes along and utters the magic words: En-bloc sale.
Hey presto! The value of your property zooms. Overnight, you become a millionaire.
But the spell does not mesmerise some of your neighbours. The lure of big bucks may not compensate them for what they are losing - big homes which they cannot afford to buy with the sale proceeds in today’s rising property market.
The friendly neighbours become enemies, facing off each other in court.
In March, a group of Farrer Court residents launched a ‘bad publicity’ campaign and alleged the place had bad fengshui so other owners would vote for the sale. The property has not been put up for en-bloc sale yet.
The figures tell the tale. The number of applications to the Strata Titles Board from home owners hoping to block the en-bloc sale of their estates has gone up.
In 2004, there were 10 applications. The number rose to 14 in 2005, according to a Straits Times report last August. The figure has already reached 32 as of last August.
Just last week, it was reported that some unhappy home owners at Horizon Towers tried to stop the en-bloc sale even though a developer had agreed to buy it for $500 million in January.
Their reason: The condo next door, Grangeford Apartments, is asking for $660m.
A couple at Waterfront View in Bedok also refused to accept the en-bloc payout and took the matter to the High Court last month.
The owners said the net proceeds were insufficient to fully repay the outstanding bank loan and fully return CPF monies withdrawn to buy the property. They failed in their bid to stop the development from going en bloc.
Industry watchers say greed is also a major factor.
Chesterton International’s head of research and consultancy, Mr Colin Tan, said: ‘No longer are properties treated as homes first. They are now treated as short-term investment products that can be traded like a commodity.’
Lecturer Christine Lim, 49, is worried about all the en-bloc talk going on in her estate, which is located in the West.
She said: ‘My estate may be old but it is still in a good condition. So, why is there a need to talk about going en bloc?’
About a third of the more than 100 en-bloc deals last year fell through, or are still in the market because the majority vote was not achieved or the project did not hit its reserve price, according to a Business Times report in February.
Credo Real Estate, which specialises in en-bloc sales, said it has noticed more resistance to en-bloc efforts of late.
Director Yong Choon Fah explained: ‘This is because property prices are moving up and replacement units are also harder to find as the units in the newer developments tend to be smaller.
‘And when you sell high, you also buy high.’
Source: The New Paper, 10 May 2007
