MPs raise concerns over shorter timeline for signature collection as law passed to lower en bloc thresholds

SINGAPORE: Members of Parliament (MPs) raised concerns about a shorter timeline to get signatures for a collective sale agreement and the cost of replacement homes as parliament passed a law on Tuesday (Sep 8) to lower en bloc consent thresholds for older developments. Under the new law, the consent threshold for developments aged 40 to 59 years would be lowered from 80 per cent to 70 per cent, and from 80 per cent to 65 per cent for those aged 60 years and above. At the same time, the legislation would tighten rules governing en bloc attempts . The threshold to convene a general meeting to form a collective sale committee would be raised to 35 per cent of owners, measured either by share value or the number of units. That is up from the current requirement of 20 per cent of owners by share value or 25 per cent of the number of units in the development. The timeline to obtain signatures for a collective sale agreement will be halved from 12 months to six months. After a failed collective sale attempt, the restriction period will be extended from two years to three years. During that period, any fresh attempt to form a collective sale committee would be subject to the higher requisition threshold.

In his opening speech, Minister for Law Edwin Tong said the amendments form an “integrated package” that facilitates the renewal of older developments, while providing greater certainty and also stronger protections for non-consenting owners. “The lower consent thresholds make board-based renewal more accessible for genuinely ageing developments where there is support amongst the owners. “At the same time, the higher initiation threshold, shorter signature window, and extended restriction period ensure that the framework cannot be used to mount repeated disruptive attempts in developments for which there is really insufficient majority support,” he said. As buildings age, the cost of upkeep rises significantly, he added. The estimated cost of modernising a single lift starts from S$120,000 (US$95,000), and full replacement costs between S$200,000 and S$300,000 per lift. Repainting works can cost several million in larger developments, and the cost of mandatory façade inspections, spalling concrete repairs, waterproofing and structural inspections needs to be factored in as well, he said. “For the owners, this represents a real and growing burden. At some stage, continued investment in upkeep yields diminishing returns, and owners who wish to pursue renewal may nonetheless find themselves unable to do so under the existing framework,” he said. Mr Tong added that the law builds on previous efforts to ensure that Singapore’s framework for urban renewal remains “fit for purpose”, and allows for Singapore's urban landscape to continue to renew itself in an “orderly and sustainable fashion”. According to official government records, more than 360,000 private non-landed residential units are currently below 40 years, while 20,000 private non-landed residential units are above 40 years.

SIX-MONTH TIMELINE Several MPs raised concerns about the shortened timeline to collect signatures for a collective sale. MP Fadli Fawzi (WP-Aljunied) said that the administrative burden on a volunteer collective sale committee is “immense”, especially in larger condominiums. Gathering signatures involves door-to-door verification, coordinating with overseas owners, navigating complex probate matters for deceased owners and holding multiple town hall discussions to address individual anxieties, he said. “A rigid six-month window may inevitably penalise large estates where a vast majority of owners may actually favour a sale, but where the sheer logistics may prevent the committee from reaching the final finish line in time.” He suggested having tiered timelines based on the size of the estate, or introducing an automatic grace period extension to the signature collection period. MP Wan Rizal (PAP-Jalan Besar) said a shorter period to collect signatures can reduce uncertainty and prolonged campaigning. But if the timeline is “too tight”, owners may feel rushed and tensions between neighbours may rise, he said. Similarly, MP Ang Wei Neng (PAP-West Coast-Jurong West) suggested a mechanism allowing larger developments to apply for an extension where there are “genuine practical difficulties”. “This would strike a reasonable balance: protecting non-consenting owners from unnecessary prolonged pressure, while recognising that large developments should not necessarily be treated in exactly the same way as the small ones,” he said. In response, Mr Tong noted that the period of signature collection is usually the “most difficult” and “most polarising” phase of a collective sale exercise for all owners, “There will be sustained uncertainty and pressure in some cases, persistent lobbying. In one example, we received feedback that information on units that had not or refused to sign the CSA (collective sale agreement) were then named on social media, on WhatsApp, chat groups, other communication groups, to try and pressure these owners into agreeing to the sale,” he said. While this does not happen across developments, such practices tend to happen in longer signature collection periods, he said. He added that while they had considered the merits of a differentiated signature collection period, they decided against it as size is “not necessarily the only indicator of complexity” in the context of an en bloc sale. Mr Tong added that a significant majority of signatures are typically gathered within the first four months, or within a concentrated window of one to two months. Several large developments were also able to reach the 70 per cent threshold within six months. This data informed how they approached the revisions, he said.

SUPPORT FOR HOMEOWNERS Another concern raised was the cost of finding a replacement home, should a collective sale succeed. Non-Constituency MP Andre Low (WP) said a successful collective sale could leave a household struggling to afford a move. “For an older owner, making up the shortfall could mean drawing further on retirement savings, and a younger family with limited savings may need substantial new borrowing if it can obtain a loan at all,” he said. He asked the government to consider requiring a standardised disclosure of the likely financial and rehousing consequences before owners sign the collective sale agreement. Owners should be able to see indicative net proceeds based on the reserve price and apportionment method, with sale costs and relevant mortgage and CPF implications clearly explained, he said.

MP Yip Hon Weng (PAP-Yio Chu Kang) suggested that owners’ information packages should include indicative prices for comparable nearby homes, major relocation costs and the expected timetable. While this would not guarantee replacement, it would reveal the “real cost” of starting again, he said. MPs pointed out that elderly and vulnerable households, in particular, might require more assistance in the collective sale process. In the face of maintenance cost pressures and a lower consent threshold for a collective sale, MP Alex Yeo (PAP-Potong Pasir) asked whether some homeowners would be left with no other choice but to accept a lower and less competitive collective sale. He asked whether the government would consider setting up a support mechanism, particularly for senior homeowners who may require advice on their rights and relocation prospects in the collective sale process. MP He Ting Ru (WP-Sengkang) said there may be homeowners who feel they have no housing alternatives. They may be elderly, in poor health, or vulnerable in other ways, she said. She asked the government to clarify what specific bridging support or relocation assistance could be extended to elderly or vulnerable minority owners who did not consent to the sale, but are compelled to give up their primary home under these lower thresholds.

In response, Mr Tong said it would be useful to have a lawyer introduced into the process, as included in the 2007 amendment, to offer owners an opportunity to ask questions about legal terms, liabilities, what is outstanding on the mortgage, what they might have to incur by way of cost, and address any doubts that they might have. If needed or necessary, the collective sale committee can already work with the appointed lawyers to make special arrangements to accommodate signing by individuals who may face mobility issues or require additional assistance. The requirement of a physical presence of a lawyer only applies when the collective sale agreement is signed in Singapore, not when it is signed overseas, he added. Mr Tong added that information on the collective sale process is available on the Strata Titles Board (STB) website. Owners can also tap into legal support resources available to members of the public, including from Pro Bono SG's community legal clinics. “We will work with STB to enhance the relevant information after these amendments are introduced, as well as the guides that are available on the collective sale process, so that … those who are affected by the collective sales will be better informed,” he said. Collective sale committees must also provide a preface to the collective sale agreement, which states the clause numbers and page numbers where key information can be found, including the apportionment method for the proceeds of sale. That perhaps is the most important information for a seller, as well as the fees payable to parties involved in handling the collective sales, such as lawyers, professional agents, and others, said Mr Tong.

OTHER PARTS OF BILL Under the new law, the limit on court-ordered increases to the sale proceeds paid to objectors will be raised from 0.25 per cent to 0.5 per cent of the sale proceeds for each lot or flat, or S$2,000 for each lot or flat, whichever is higher. This increases the pool of proceeds available to be awarded to non-consenting owners. The amendments would also extend the collective sale regime to non-strata-titled private residential developments where flat owners hold long leases over their units but do not own the underlying land. Such developments require unanimous agreement between flat owners and landowners before they can be sold. Under the new framework, they could instead proceed with a majority-consent sale, with safeguards to protect landowners' interests. Currently, they can only undergo collective sale by majority consent if the flat owners own flat leases of at least 850 years. Most of the amendments would apply to ongoing en bloc exercises where the first signature to the collective sale agreement has not been obtained before the law comes into force. In estates where the first signature has already been obtained, the ministry said the rules will continue to apply. However, committees that are still collecting signatures will be allowed to convene general meetings to decide whether to terminate the agreement, and if so, to approve terms for a new agreement that will be subject to the new rules. Such collective sale committees will be given seven months from the start date to meet the required consent threshold for the new agreement.