Getting started
1. Owners should establish if a collective sale is feasible by talking to property consultants.
2. Seek advice from lawyers, property consultants and managing agents on how to draft and send requisition forms and the agenda for an extraordinary general meeting (EGM) to all owners.
3. Signed EGM requisition forms are needed from at least 20 per cent of the owners by share value or 25 per cent by the number of units. Submit the forms to the secretary of the management council (MC).
4. The MC will convene the EGM with 14 days’ notice. Get advice from lawyers and your managing agent on important rules relating to the conduct of EGMs.
Appointment of collective sale committee
1. Elect members for the collective sale committee at the first EGM. Also, discuss the appointment of a property consultant and lawyer.
2. The appointed property consultant will advise the collective sale committee on the proposed reserve price for the estate, the method of apportionment and other commercial matters. The appointed lawyer will advise on the collective sale agreement and other legal matters.
3. The collective sale committee will convene the second EGM with 14 days’ notice.
4. At the second EGM, discuss the apportionment method and terms of the collective sale agreement.
Signing of the collective sale agreement
1. Consent for the sale is needed from at least 80 per cent of the owners by share value as well as strata area. This level goes up to 90 per cent if the property is less than 10 years old.
The appointed lawyer should be present to witness the signing of the collective sale agreement, if it is signed in Singapore, and to explain legal terms.
2. The collective sale committee will convene the third EGM with 14 days’ notice, after obtaining the required approval level for a collective sale.
3. At the third EGM, the collective sale committee will update owners on the signing status of the collective sale agreement and the proposed sale terms and process before the launch of the public tender or auction.
Sale
1. Market the estate and obtain the valuation report. Evaluate bids and award the tender to the best bidder. A private treaty deal is possible within 10 weeks of the close of the tender or auction.
2. The collective sale committee will convene the fourth EGM after serving 14 days’ notice.
3. At the fourth EGM, provide information on the offers received and discuss the terms and conditions of the sale and purchase agreement.
4. The collective sale committee and lawyer will apply to the Strata Titles Board (STB) for an order of sale if the estate does not have a 100 per cent approval rate from owners. STB will call for mediation session(s) and/or formal hearing(s). It will issue an order of sale if the sale is approved.
5. The sale is usually completed in about three months’ time from the day that 100 per cent consensus is obtained, or from the day that an order of sale is obtained from STB. Owners receive the sale proceeds (less the retention sum if they continue to stay on after the completion of the sale).
Vacating premises
1. Owners typically enjoy a rent-free stay of up to six months, if it is provided for in the sale and purchase agreement.
2. Owners/occupants will move out and owners will deliver vacant possession to the buyer. Owners will receive the retention sum.
Please note that the above serves merely as a summarised guide, and is not to be taken as complete advice, or the only correct steps that may be taken.
Please consult the relevant professionals on the above matters for their views and advice.
Article contributed by Credo Real Estate
Source : Sunday Times - 18 Nov 2007
