Could you possibly be sitting on an En-bloc golden egg and not know it? Or before you make an investment, do you know if your purchase could earn you a tidy sum in the future?
En-bloc sales of older properties can often be the windfall property owners are looking for and having an idea of the process could be the start to planning for the future. Not every development will have the same potential and often the wait could be longer than the photos yields, but there is money to be made this way.
The first step involves securing 20% of the total share value of 25% or the total number of owners. But should the first bid at a collective sale fail, 50% of the previously mentioned total share value or total number of owners will be required to requisition a extraordinary general meeting (EOGM) within 2 years. Then there is the election of the collective sale committee (CSC). They will then draft the proposed a reserve price as part of the collective sales agreement (CSA). Though a high reserve price may increase the probability of securing sufficient signatures go the sale, the high price may also turn potential buyers away. Developers do after all need to take the time and money to conduct feasibility studies and land surveys of the site.
Then there is also the issue of valuation per unit. The criteria for share allocation as recommended by the Singapore Institute of Surveyors and Valuers are valuation, strata area and share value. In addition, 80% of the owners must also agree on the method of apportionment before the bid can happen.
Only then will public tender be made and a property valuation be made by an independent valuer on the closing date of the tender. In the 10-week period after the tender closing date, the CSC is still able to enter into a private treaty with a buyer. The process is often long and could take years, such as in the case of the Pearl bank apartments or Laguna Park.