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It’s obvious to anyone paying attention that en bloc property sales in Singapore have  basically come to a standstill after the latest property curbs were implemented. This occurred in July 2021 and since then there have only been two completed en bloc sales. The outlook seems pretty bleak compared to the previous quarter when $3.8 billion in transactions were completed.

As you would expect, several developments are continuing on in their attempts for an en bloc sale, including the $2.79 billion Mandarin Gardens, and the $1.86 billion Pine Grove. If either of these would impact you, it’s important that you have some idea of how long the en bloc process could take. Also, if the sale actually goes through, what’s the next step? Would you be given enough time to find another home? Let’s take a close look at the timeline.

 

Timeline for Completing the En Bloc Sales Process

There are quite a few phases before the en bloc sales process is finally complete, with some even being extended, due to stumbling blocks along the way.

 

Phase 1

Getting Organized: 1-2 months

An en bloc sales process always starts when a few owners get together and create a pro-temp sales committee to begin the Extra-ordinary General Meeting (EOGM) for the purpose of organizing a Collective Sales Committee (CSC).

Ideally, the committee would be comprised of residents from units of all different sizes. This way there would be fair representation from the start, which would go a long way towards preventing disagreements at critical junctures down the road. The job of the CSC is an important one in that it must do everything it can to generate interest, so that the majority of residents vote favorably.*

*Note: If a development is under 10 years old, it requires the consent of 90% (by share value and strata area). If a development is over 10 years old, 80% consent is required.

 

It usually takes a few EOGMs for members to decide on the terms of the Collective Sales Agreement (CSA). They also have to determine who to use as consultants. These would include the lawyers and the property agency that would handle the tender and sales process.

Phase 1 is also when the valuation, reserve price, and Method of Apportionment (MOA) is set. These are extremely important decisions because they greatly impact the timeline of the en bloc process. To get the required majority vote, the price must be high enough, but if it’s too high it could keep developers from stepping up to bid.

 

Deciding on the reserve price is a complicated process because there are a lot of variables that must be considered, which include:

• Current and actual plot ratios
• Current market conditions
• En bloc sales in surrounding areas
• Successful en bloc sales and prices
• Potential developments nearby
• Land Betterment Charge (LBC)

Sometimes there is a need to do extra due diligence, including having an independent valuation done in order to come up with the proper reserve price.

Once that’s all done, the committee must tackle the MOA, which is often plagued with disagreements. This is an extremely important process since the MOA is what determines how much money each resident will get from the sale. Therefore, the CSC must suggest an MOA that is considered fair to everyone in the development.

This is why the process is so contentious. As you can imagine, some residents believe that their unit is being undervalued, so they want more. They may be basing this on the level it’s on, the facing, and/or how unique they think their unit is. Before the en bloc process can move on to Phase 2, all these issues must be resolved.

 

Phase 2

Obtaining the 80% or 90% vote: Up to 12 months

During this phase, the CSC has up to 12 months to obtain the required percentage of votes to launch the public tender for the en bloc sale.

 

Phase 3

Sale is launched via public tender: 1 month or 10 weeks if by private treaty

The tender would typically close within a month. However, if no one bids high enough, the sale will be by private treaty, which could take up to 10 weeks.

 

Phase 4

Application to Strata Title Board (STB): 3 to 9 months

It is during this phase that residents who are against the sale have a right to file an objection. The STB is the entity that will mediates the dispute and if they are unable to resolve matters the STB must issue the stop order. This escalates the dispute to the High Court, adding a lot more time to the process. 

 

Phase 5

Completion of the Sale: 3 months

Upon STB approving the sale, it takes three more months before the sale is finally completed.

 

Phase 6

Property is Handed Over: 6 months

Once the sale has been completed, residents are given up to six months before they have to move out and give the developer vacant possession of their unit. 

 

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At Pinnacle Estate Agency, we strongly believe in sharing our real estate knowledge to the public.⁠ For more content like this article, check out our Singapore Property Guides.