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Parliament No: 9
Session No: 1
Volume No: 69
Sitting No: 4
Sitting Date: 1998-07-31
Section Name: BILLS
Title: LAND TITLES (STRATA) (AMENDMENT) BILL
MPs Speaking: Assoc. Prof. Ho Peng Kee (Minister of State for Law); Assoc. Prof. Chin Tet Yung; Dr Teo
Ho Pin; Mr Chiam See Tong; Mr Chng Hee Kok; Mr Chuang Shaw Peng; Mr J. B.
Jeyaretnam; Mr Lew Syn Pau; Mr Shriniwas Rai; Mr Simon S. C. Tay; Mr Zulkifli Bin
Baharudin; Mr Tan Soo Khoon (Mr Speaker);

LAND TITLES (STRATA) (AMENDMENT) BILL

2.40 pm Order for Second Reading read.

The Minister of State for Law (Assoc. Prof. Ho Peng Kee): Mr Speaker, Sir, I beg to move, "That the
Bill be now read a Second time."

I had informed this House on 19th November last year that Government would be amending the law to
make it easier for en-bloc sales to take place. The current position is that a single owner, for whatever
reason, can oppose and thwart the sale. Government has received many appeals and feedback from
frustrated owners whose desires to sell their flats or condominiums en-bloc have been so thwarted. As a
result, these buildings cannot take advantage of enhanced plot ratios to realise their full development
potential, which would have created many more housing units in prime 999-year leasehold or freehold
areas for Singaporeans. A secondary benefit is that these developments, especially the older ones, could
have been rejuvenated through the en-bloc process.

I said that the law would be amended to remove the need for unanimous consent. I highlighted the fact
that such a practice would not be peculiar to Singapore, as it already exists in some American and
Canadian states. I emphasised that in land-scarce Singapore, such an approach was even more
imperative as it would make available more prime land for higher-intensity development to build more
quality housing in Singapore. In fact, since then, Hong Kong has also passed legislation along the same
lines. In February this year, also in this House, I outlined the main features of the new scheme. In
particular, I highlighted the fact that safeguards would be put in place to protect the interests of the
minority owners.

Let me now highlight the key features of the proposed new scheme.

Firstly, Government will not decide which developments are ready or ripe for en-bloc redevelopment.
The owners will decide that for themselves. There are too many factors at play, such as the age and state
of repairs of the development, market conditions, sentiments of the owners and the relationship amongst
them. As announced previously, what the Bill will do is peg the required majority consent to the
development's age - the majority owners must account for at least 90% of the share values for
developments less than 10 years old, and 80% for developments 10 years or more. This approach will
facilitate the redevelopment of older buildings. It is also in line with the approach in other countries - Nova
Scotia, New Brunswick and Ontario in Canada (80%); British Columbia, Canada (75%); Hawaii (80%) and
Hong Kong (90%, but where the law also provides that the Chief Executive in Council may specify a lower
percentage not less than 80% in certain circumstances). A higher percentage is not practical, a lower
percentage not appropriate given the importance of the matter.

The current requirement of unanimous consent is untenable. The case of Kim Lin Mansions which was
recently highlighted in the press brings this out clearly. Community living, which is the heart of living in a
condominium, all but disappears when owners have to drag out their disagreement in court, incurring
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huge financial outlays in the process. There is uncertainty; there is delay; there is acrimony. Also, as
more developments age and incur large upgrading and repair bills, opting for en-bloc sale will increasingly
become a viable option. But the existing law which requires unanimous consent makes it extremely
difficult, if not impossible, to realise en-bloc sales.

Sir, the principle of majority rule is evident in other areas of shared social and corporate life. Examples
abound. They include decisions relating to managing and maintaining common areas in condominiums
under the Land Titles Act; privatisation of HUDC flats; upgrading works under the HDB Upgrading
Programme; voluntary liquidation of a company or dissolution of a society.

Developments with 10 or fewer units will still require unanimous consent. With the small numbers, it is
not possible to designate a clear 80% or 90% majority. Even if we base it on an approximation, it would
not be meaningful, as one owner's disagreement in such small units may constitute a large percentage.
For such small developments, the owners should be able to negotiate and agree amongst themselves.

Secondly, there will be adequate safeguards to protect the interests of minority owners. These
safeguards are found in the procedures as well as in the substantive powers of the Strata Titles Board.

Let me first touch on the procedures. The majority owners will first enter into a conditional sale and
purchase agreement to sell to a purchaser, subject to their obtaining an order from the Strata Titles
Board. Thereafter, they must give notice of the proposed en-bloc sale in the newspapers. They must also
separately serve notice of the proposed en-bloc sale on all interested parties, including the owners,
mortgagees and chargees of the minority owners as well as on the management corporation. This notice
must be accompanied by a copy of the advertisement published in the newspapers, the conditional sale
and purchase agreement, the valuation report and the buyer's statutory declaration stating his
relationship, if any, to the owners. The conditional sale and purchase agreement must state the price and
method of distributing the sale proceeds. The majority owners must then apply to the Strata Titles Board
for an order of sale, enclosing the documents mentioned earlier. The minority owners and their
mortgagees or chargee would then have 21 days to file their objections, if any, with the Board.

These procedures will ensure that all relevant parties will have adequate notice of the sale and its
terms, in order to decide whether or not to lodge objections with the Strata Titles Board. I should add that
no application needs to be made to the Strata Titles Board if all the owners agree to the sale. In other
words, application to the Board is not a pre-requisite to all en-bloc sales but only when there is no
unanimous consent.

Let me now elaborate on the role of the Board, in particular, how it acts as a safeguard. The Board will
first satisfy itself that the required consent has been obtained and that prescribed procedures have been
complied with. It will not review or intervene to determine the terms of sale. Essentially, its role is to
determine that the proposed sale is bona fide and an arm's length transaction so that the proposed sale
can proceed. It will do this by considering the minority's objections, the interests of all the owners, all the
circumstances of the case and the scheme and intent of the en-bloc provisions in the Bill. The Board will
look at the sale price, method of distributing the sale proceeds to ensure that the minority owners are
treated no less favourably than the majority, and the relationship of the purchaser to the owners, to
ensure that there is no collusion. If the Board decides that the transaction is bona fide and an arm's length
transaction, the sale will proceed. Otherwise, the sale cannot proceed and the majority owners would
have to rework their proposal if they still wish to sell en-bloc. The Board will not rewrite the agreement for
the parties.

The Board will consider, as I have said, all the objections filed by the minority owners, their mortgagees
and chargees. Some minority owners may raise objections which are personal in nature or peculiar to
their own circumstances, eg, he has bought his unit recently at a much higher price than that paid for by
the other owners, or he has spent a large amount on renovations. Others may raise objections based on
sentimental reasons, eg, he has lived in the development for a long time and does not wish to move out.
The Board will mediate in these situations. It is expected that skilful mediation will overcome many of
these objections. If mediation fails, the sale will nevertheless proceed as long as the transaction is bona
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fide and at arm's length, unless there are exceptional circumstances to warrant the Board assuming a
more pro-active role; for example, the sale proceeds are lower than the purchase price he had paid for
the unit or are insufficient to redeem the outstanding mortgage or charge on the unit. This is based on the
underlying assumption that none of the owners in an en-bloc sale should lose out financially.

Sir, the Board's decision will be final. An appeal can be made to the High Court only on a point of law,
or where there is alleged irregularity in the process. Owners will be precluded from applying to the court
under section 78 of the Act to terminate a strata development if they are not granted an order from the
Board for an en-bloc sale or are unable to secure the required majority consent, unless there are
exceptional extenuating circumstances such as the majority owners refusing to pay for repairs to prevent
a building from being unsafe. In other words, section 78 will remain in the Act but is used for very specific
circumstances. There will therefore be finality.

Sir, the new scheme will apply to three types of strata developments: those registered under the Land
Titles (Strata) Amendment Act where the owners own their units and share in the common property,
which is the vast majority; those not registered under the Land Titles (Strata) Act where the owners own
their units and a share in the land but do not have a management corporation framework under the Act;
and those not registered under the Land Titles (Strata) Act where the developer still owns the land.

Sir, let me now deal quickly with a few other ancillary matters. The first is strengthening of the Strata
Titles Board. The Bill provides for a number of changes to facilitate the expeditious hearing of
applications. These include increasing the number of panel members from 20 to 24; appointing two
Deputy Presidents instead of one; empowering the Secretary of the Board, to be called the Registrar, to
deal with interlocutory applications and empowering the Board to allow any person to represent an
applicant before the Board.

One other noteworthy amendment, which is not related to en-bloc sales, is that the Board's jurisdiction
will be expanded to enable it to have wider powers relating to the exercise or failure to exercise a power,
authority, duty or function imposed by the Act or by the by-laws. For example, it will be empowered to
hear and settle disputes arising from a breach or failure to perform any statutory duty or by-laws relating
to a strata development. Currently, a subsidiary proprietor or Management Corporation must apply to
court to enforce the performance or restrain the breach. On the other hand, the Board will no longer hear
cases on the liability of a developer. Proceedings against a developer for defects are based on contract,
which is a matter for the courts.

Lastly, Sir, I should add that the new scheme will only apply to strata developments. It will not apply to
landed developments. Strata developments, unlike landed developments, are founded on the concept of
community living, shared ownership of common property in designated values, and individual ownership
of strata title which is essentially air space. All these distinguishing features of strata developments
support the new approach based on majority consent for en-bloc sales.

Sir, as the Bill has attracted considerable public interest, Government has decided, as suggested by
several MPs, both in and outside the House, including the Chairman of the GPC for Law and Home
Affairs, to refer this Bill to a Select Committee. This will also enable interested members of the public to
share their views on the provisions of the Bill.

Sir, I beg to move.

Question proposed.

Mr Chng Hee Kok: Mr Speaker, Sir, I rise in support of the Bill. At the peak of the property boom, this
Bill or its underlying principles would have been welcomed by most. Minority subsidiary proprietors who
choose not to sell their property in en-bloc sales would have been dismayed.

This Bill is controversial. Some say that it is to aid majority subsidiary proprietors who stand to make
substantial gains when their apartments are sold en-bloc than
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they would otherwise not have. It can also be said to oppress the minority who refuses to sell for
whatever reasons, whether it is to demand exorbitant prices for their property or for sentimental reasons.

Sir, doing nothing will not be the responsible approach in land scarce Singapore. Whether it is the
tyranny of the minority or the oppression of the minority is a secondary concern. The most crucial
consideration is in achieving a balance between the two conflicting needs and that there are statutory
instruments in place to ensure that ultimately a proposal for redevelopment fits into and blends well with
the long term development plans of Singapore.

Without legislation, the redevelopment of old and inefficient land use developments is a costly process.
There is presently a case in our courts, and the Minister of State has mentioned the Kim Lin Mansions
case, on this very issue and the legal wrangling is causing owners on both sides of the divide a great deal
of money. This is not taking into account the human costs of uneasy neighbourhoods and of course
sleepless nights for some of the owners. This Bill when passed will go a long way to address this issue.

For whatever reason one wants to remain in a home, there is a need to ensure that the overriding
interests of society at large must be met. There must be a mechanism in place to ensure that our city-
state does not contain pockets of slums and that sufficiently old buildings are safe and well maintained.
Having said that, however, I am of the view that a 10-year old building is still a new building and using 10
years as a yardstick may be too short a benchmark. The stringent requirements of the Building Control
Department have resulted in much money being invested to ensure that our buildings will withstand the
test of time and more. It will indeed be a waste of money and resources if a building that is less than 10
years old be allowed to be torn down and redeveloped. It may also create uneasiness amongst potential
buyers who cannot be sure if an intended purchase will be the target of an en-bloc sale.

Sir, therefore, I urge the Government to reconsider a change in some of the details in the Bill. Hence,
as this Bill when passed will have a substantial impact on a majority of private property owners, I welcome
the Government's move to commit this Bill to a Select Committee.

En-bloc sale and redevelopment is an excellent way to rejuvenate some old estates which are devoid
or lacking in amenities and facilities. This complements what is being done in the public sector. With the
Government spending billions of dollars in main and interim upgrading programmes in public housing
estates, private housing estates, especially the older ones, should be encouraged to do likewise through
en-bloc sales.

Assoc. Prof. Chin Tet Yung: Mr Speaker, Sir, I rise to speak in support of the Bill in principle, and
appreciate the opportunity to express a number of concerns that I have regarding its provisions for en-
bloc sales, that is, the new sections 84A to F.

Sir, property rights in law are traditionally distinguished from other legal rights because they are of such
importance and value to those who hold them. The right to enjoy one's property and to choose a time to
dispose of it is regarded very much as a basic right of ownership. People pay higher premiums to acquire
interests in land that allow them to enjoy such rights and eventually to pass them down to their
successors in title in perpetuity. These rights should be overridden only in the most compelling
circumstances, where the public interest requires it, and must be seen to be manifestly beneficial to the
public in general, for example, building infrastructural facilities such as roads, MRT lines, stations and
airports. In Hong Kong, where they have a similar law - the Land (Compulsory Sale for Redevelopment)
Ordinance No. 30 of 1998 - the objective was to redevelop many of the old estates in Hong Kong through
private means. In Singapore, the need to do so may not be so obvious, as many estates are fairly new
and, in any case, are well maintained, as regulated by law.

The public interest in the proposed law therefore is not so evident. It is altogether different when what
is at stake is a purely economic or pecuniary decision. That is, when the decision to take away the right of
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ownership, albeit with compensation, on pure economic grounds alone - such as the redevelopment of an
estate that may just be 10 years old - to make way for a more lucrative development. It is essentially a
private deal, between majority owners and developers. In such an instance, there is a need to ensure that
all minority owners' interests are well protected.

People acquire property for different reasons - I am not concerned for those who are acquiring property
as an investment, since that essentially is a matter of economic compensation, which fits well with the
idea of en-bloc sales. For someone else - let us say a retiree - who purchases a property to stay in, and
who chooses a particular flat in a particular location to be, for example, near her children or a medical
facility, the idea of compensation in pure monetary terms may be a poor substitute. The costs of
relocation, the giving up of a home that one has spent many happy years - these are neither easy to
quantify nor easily compensated in monetary terms.

The cynical among us may say that there is a price for everything - and so there may be, but in reality, I
do not know how these issues are likely to be dealt with in the Act, despite the Minister of State's
assurance. Or whether such issues can be dealt with satisfactorily, no matter what the Act says. As it
stands, the Act gives no guidance on how such non-material considerations are to be taken into account,
if at all. It is interesting to note in this context that the Hong Kong legislation referred to earlier mentions,
for example, the age or state of repair of the existing development. The Hong Kong Ordinance also
requires subsidiary legislation specifying the grounds on which an order for sale may be made. In my
view, it is necessary to enact similar regulations, especially if the decision is left to the Strata Titles Board.
This is the next issue to which I shall now turn.

It is stated that these matters may be brought before the Strata Titles Board, and that the Board will
have powers to mediate, to call for valuation reports and finally, to make orders. Such orders are binding
on minority owners who object to the sale. These are orders that significantly affect property rights. I
wonder whether it is not altogether appropriate to have an application made to the High Court instead of
the Tribunal.

Sir, the Land Titles Act, sections 77 and 78, actually provides for application to the court in relation to a
variation of strata subdivision scheme consequent upon damage to or destruction of a subdivided
building, and to termination of a strata subdivision scheme. Surely, the powers of the court can be
extended to cover the matter of en-bloc sales. This may at least provide some comfort to minority owners
who may be dispossessed by such an order. The judiciary is used to matters involving private parties; the
judges are used to quantification of damages, including large amounts of damages. They are used to
taking into account non-economic considerations, such as pain and suffering. The Strata Titles Board,
talented though it may be in property matters, is not used to this type of work. In any event, it is in my
view imperative that if such a Board were to decide on this matter, Parliament should ensure that there be
specified grounds on which an order of sale can be made, similar to that provided in the Hong Kong
legislation.

There are two other matters that I should like to draw attention to. The first, as has been mentioned by
the GPC Chairman, relates to the 10-year rule. That is to say, if a development is more than 10 years old,
only 80% of the subsidiary proprietors need to agree (or if it is less than 10 years, 90%). Sir, in the
context of estate development in Singapore, where estates are generally well maintained, this seems too
early a period to speak of en-bloc sales. Would it not be a waste of economic resources to tear down a
development that is only 10 years old or less? Especially, if some subsidiary owners would like to
continue to live in it. Would this sort of rule adversely affect the maintenance level of estates? Is there a
commitment, for example, to upgrade the lifts if it were known that a developer has been eyeing the
estate with a view to redevelopment? Again, it would seem that more specific regulations are needed to
control such a situation and a review of the 10-year rule should take place.

Finally, I refer to a technical problem, the issue of notice and objections. This relates to the safeguards
that the Minister of State has just mentioned. Under the proposed section 84A(1), majority subsidiary
proprietors who have secured a conditional agreement of sale may apply to the Board for an order of sale
to be made out. Under section 84A(4), a subsidiary proprietor who does not agree to the sale has to file
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an objection within 21 days of the date of notice served in the normal case. The failure to file an objection
has serious consequences under subsection (6) - the Board is under a duty if it does not receive any
objection to order a sale! Nowhere in the section is it provided as to who is to inform those subsidiary
proprietors who have not entered into agreements of sale about the application to the Board. Subsection
(10) provides for notice by registered post but does not make clear who has the obligation to inform the
minority. Would it be the Board or the applicants for the order of sale? Such matters have yet to be
clarified in the legislation.

Sir, I am aware that in land scarce Singapore, optimal land use is always a priority. Yet, for the same
reason, property interests are so much more important to those who have purchased them, especially on
the open market. There is a need therefore for the Minister to reassure this House, and indeed, the
people, that encroachment into the proprietary interests of minority owners should be allowed only in the
most convincing of circumstances.

Sir, I give my qualified support to this Bill and hope that these issues would be taken up in the Select
Committee.

Mr Lew Syn Pau (Kreta Ayer-Tanglin): Mr Speaker, Sir, this Bill was introduced to facilitate the en-
bloc sales of certain property. I support the underlying principle of the Bill because I believe that en-bloc
sales, if made easier, would prevent old properties from degenerating into slums. In the last few years
when property prices were higher and plot ratios in certain areas were increased, we saw many
condominiums and apartment owners attempting to sell their properties en-bloc. Some succeeded while
others failed. Those that failed owed it to the few owners who held out for various reasons. Some have
noble, sentimental reasons, while others just wanted more money than their neighbours. Those that failed
to sell en-bloc have missed the boat for the time being and are in danger of degenerating into slums
during the trough of the economic cycle as many of these properties are fairly old. In a case like this, one
could say that we had a tyranny of the small minority over the majority. I sympathise with the majority of
the owners involved.

In debating this Bill, one cannot do so without going into the issue of individual rights over that of
society. Although one of our core values is society above self, in this context, we must look at what this
larger society is, that self must sacrifice too. In the case of private land acquisition for public roads,
highways, drainage or MRT lines, one can understand the need for this as the larger society that benefits
would be people one can count in the realm of thousands, if not tens of thousands or hundreds of
thousands, who use the public facilities. In the case of en-bloc sales, the larger society that benefits is
one's neighbours, maybe 10, maybe 100, who just want more money for their units if sold en-bloc than if
sold individually. The question therefore is: should the individual be made to subsume his interest to that
of the society so that the latter can make more money?

One could argue that money is not the only issue and that the main reason is really to prevent the
condominiums or apartment blocks from degenerating into slums. If that was true, then one could argue
that en-bloc sale is not the only way to prevent this from happening. One could go for upgrading
programmes and refurbishment as in the HDB major upgrading programmes. In this case, under the
current law, only 75% of share values in the estate need to approve for such upgrading to proceed. Since
the larger society that benefits from self-sacrifice is not as noble in the case of en-bloc sales of private
properties for redevelopment as in the case of acquisition for public projects, I contend that we should
maintain a balance of individual rights over that of the other neighbours. The question then is: what is that
correct balance? I suggest we should then go back to the fundamental reason for which this Bill was
meant to achieve and, that is, to prevent the degeneration of old private properties into slums.

This Bill proposes that, in the case of properties less than 10 years old, 90% of the share values would
suffice for an application to be made to the Board for an order for sale of all the lots in common property
to proceed. In the case of properties above 10 years old, 80% of the share values agreeing would suffice.
My question is: are properties less than 10 years old in danger of degenerating into slums? To me, the
answer is obviously no. In my view, the age of properties should be the key deciding factor here which
determines whether the individual's right to hold out should be ridden roughshod over. For older
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properties, the danger of degeneration into slums becomes more real. In this case, we should give
greater weightage to the needs of the majority of the other owners.

I agree that some judgement and subjectivity is involved. However, in my own view and judgement, I
propose that for properties less than 10 years old, 100% of share values should still be maintained for en-
bloc sales to proceed. For properties between 10 and 20 years old, 90% of share values could suffice,
and for properties above 20 years old, then 80% of share values could suffice.

In addition, tearing down of fairly new buildings is a waste of national resources and should not be
encouraged. I believe my suggestion is more equitable and maintains a better balance between individual
rights and the good of the larger society. And with this, at least the individual has the peace of mind that
in the first 10 years of the life of his new property, he would not wake up one morning to be rudely told
that he has to move out, because his neighbours have decided to cash out in an en-bloc sale.

Mr Chuang Shaw Peng: Mr Speaker, Sir, as everybody is aware, the emergence of en-bloc sales in
Singapore is mainly due to the present Development Guide Plan (GDP), where the usage of land is
capable of being intensified from that which is currently being used. This Land Titles (Strata)
(Amendment) Bill is meant to facilitate the redevelopment of land for more intensified use, and I think it
covers most of the possible situations.

However, in my opinion, there are two situations which have been missed out and should be
considered. Situation 1. The Bill deals with a case where the subsidiary proprietors of the lots holding not
less than 80% or 90% of the share values wish to sell to the purchaser. But it does not, however, appear
to deal with a situation where one subsidiary proprietor of the lots already owns 80% or 90% of the share
values and wishes to purchase the remaining 10% or 20%. If the said subsidiary proprietor wishes to sell
to the purchaser, it would be possible under the Bill to apply to the Board for an order. There is, however,
no provision to allow this subsidiary proprietor to apply to the Board for an order to purchase the
remaining 10% or 20%. I feel that the Board, in the spirit of the Bill, should assist such a subsidiary
proprietor. Of course, some safeguards must be built in for such a situation, for example, the appointment
of two independent valuers or the said subsidiary proprietor must acquire the remaining 10% or 20% only
for the purpose of redevelopment. If this situation was not covered, the said subsidiary proprietor who
meets with objection from the remaining subsidiary proprietors of the building would then not be able to
redevelop the land to its fullest potential.

This situation is similar to an en-bloc sale which has resulted in this Amendment Bill in the first place.

The only recourse for such a subsidiary proprietor would be to sell to a purchaser. Of course, one can
argue that he can always set up a company to be the purchaser, but the procedure would attract more
stamp duties, more legal cost, etc. And I feel that the spirit of this Bill should be to facilitate the en-bloc
sale and not to collect more revenue for the Government if the situation does not require it.

Situation 2, and this is a more complicated one. Currently, there are some land developments on
sizable plots of land in Singapore where the DGP allows for more intensified use than its current use. But
the intensification is not to the extent that it warrants the demolition of the existing buildings on the land,
particularly if they are still quite new. And in some cases, due to the layout of the existing development,
there is no need to demolish any building and an additional building can actually be erected on the site.
But it means that the consent of 100% of the subsidiary proprietors of the lots in the development have to
be obtained, and some objections would definitely be raised. I would like to ask the Minister whether in
such a situation the same approach as taken by the Bill for en-bloc sale can be adopted, ie, if the
subsidiary proprietors of the lots in the development holding not less than 80% of the share value consent
to such a proposal, an application can be made to the Board for an order to allow the proposal.

Mr Speaker, Sir, so far I have spoken about the benefit of the majority of the subsidiary proprietors of
the lots. The interests of the minority, of course, cannot be ignored. I came to understand that some
subsidiary proprietors object to en-bloc sale because of their desire to send their children to a school
within 1-2 km or their need to look after their elderly or sick parents nearby or they have just recently
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completed extensive renovations to their premises. I see a need for the Board, as defined in the Bill, to be
empowered to consider these intangible factors in their mediation or arbitration between the disputing
parties and possibly make adjustment to the share values to achieve an equitable distribution of the
values. It will not be wise to pass this Bill to facilitate the development of land and ignore its possible
detrimental effects on the other ongoing good policies which are meant to encourage stronger family ties
and equitable treatment of our people. As pointed out by Prof. Chin, the Bill is not clear on this. I would
call for more details on these issues to be addressed in the Select Committee.

Sir, in principle, I support the Bill.

Mr Speaker: Order. I suspend the Sitting and will take the Chair again at 3.45 pm.

Sitting accordingly suspended at

3.18 pm until 3.45 pm.

Sitting resumed at 3.45 pm

LAND TITLES (STRATA) (AMENDMENT) BILL

Debate resumed.

Mr Zulkifli Bin Baharudin: Mr Speaker, Sir, I rise to support this Bill.

Singapore has successfully managed to remain a vibrant and efficient city-state because of our ability
to rejuvenate and redevelop our infrastructure. In this regard, the primary aim of this Bill, to allow changes
in its Development Guide Plans to be translated into better utilisation of scarce land resources and
infrastructure can be supported.

We have the Land Acquisition Act that would allow the Government to acquire land and properties if it
is in the public interest to do so. Therefore, if it is in the public good to acquire residential properties even
though it may be a building of, say, less than 10 years old, then it must be done. After all, the law
provides for compensation at market prices. I would go as far as to say that we should also consider
invoking the Land Acquisition Act if property owners or management corporations fail to maintain their
buildings. Therefore, the provisions to allow management corporations greater powers to compel owners
to maintain their properties are appropriate.

However, it is another thing to say that neighbours and other property owners can now decide or
influence whether they can now remain in their house, especially when en-bloc sale is justified purely on
monetary gains and considerations, not necessarily for general public interest.

I can understand the frustration some property owners feel when they cannot sell their property en-bloc
because, under present law, even a single owner can frustrate an en-bloc sale. However, I cannot accept
or understand the extreme some owners have gone to force and intimidate other minority owners to sell
their properties en-bloc. The opportunity for quick and substantial capital gains has blinded many of these
owners into thinking that everyone like themselves should decide to sell their houses simply on monetary
considerations. Many give scant attention to other genuine reasons why some property owners prefer not
to sell their homes despite the potential for huge windfall. The elderly may not want to move out or be
burdened by new financial obligations. The unique thing about property is that there is only one of its kind.
Another house is never exactly the same. There are also genuine concerns about location, for example,
nearness and proximity to family members, school amenities and the comfort and familiarity with the
general neighbourhood. Even on purely monetary considerations, as different purchasers may have paid
different prices for their property, the monetary gains to different owners are not the same. Therefore,
owners do not necessarily have the same incentives and motivation to sell, especially in the current
property market. What if the minority owners have to sell at a loss?
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It is for this reason that I think the Strata Titles Board should be strengthened not only in numbers, as
stated in section 87, but also in terms of its representation so that the Board can effectively perform its
function of protecting minority interest. I would urge the Minister to provide for clearer guidelines to assist
the Strata Titles Board so that the genuine interests of the minority are not sacrificed purely because of
the monetary interest of the majority. It must be on the onus of the majority to ensure that every possible
way has been explored to protect the minority interest through preferential purchase of new apartments
on redevelopment sites. It should also be the responsibility of the Strata Titles Board to ensure that non-
monetary issues and the interest of the minority owners are given sufficient weightage before the Strata
Titles Board can make an order under section 84A(6) or (7).

Until now, property ownership has a proprietary value which is permanent and cannot be removed
except for special circumstances, for example, by Government Land Acquisition. As such, the idea of
Singapore as our home can be promoted because there is a sense of permanence to one's
neighbourhood and home. It may be bricks and mortars that make a house, but a home is about shared
experiences, fond memories and emotional attachment that can never be equated in monetary terms.
These are matters that deserve very careful consideration. Given the current property market, there is a
lesser need for quick action. I therefore welcome the Minister's decision to refer this matter to a Select
Committee so that views from a wider cross section of the people can be obtained. This issue has
attracted much public debate. Clearly, a consensus on this matter is preferred.

Finally, I believe that there should exist in Singapore the recognition that in our homes or friends and
our neighbours, our emotional attachment to our neighbourhood are matters which are far more important
than the windfall gains one can make from an en-bloc sale.

Dr Teo Ho Pin (Sembawang): Mr Speaker, Sir, I would like to declare my interest as the owner of a
strata title lot.

Sir, I rise in support of the Bill. In land-scarce Singapore, we have no choice but to maximise land use
through proper land use planning. The recent revision and development of the Concept and Development
Guide Plans by URA clearly indicates the need to update land use plans in Singapore. This is necessary
so that we can keep up with changing population and economic trends.

This Bill indeed will facilitate better utilisation of land through en-bloc sales of certain property. At the
same time, it will enable the Strata Titles Boards to function more effectively and efficiently for the benefit
of all subsidiary proprietors and flat owners.

Sir, I would like to raise the following points on the principles and implications of this Bill.

Collective sale of property

Clause 8 inserts a new Part VA (containing new sections 84A to 84F) to facilitate en-bloc sales of land
within a subdivided building. But it only applies to owners of flats or units in a strata or subdivided building
or development with more than 10 units or flats. The clause seems to discriminate against developments
of 10 units and less. I hope the Ministry could clarify the need for this requirement.

Sir, to be consistent in encouraging en-bloc sales, we should remove this requirement and allow all
developments that are eligible for en-bloc sale to make an application for collective sale.

Time period requirement for en-bloc sale

This Bill permits owners of 80% share value in a development to apply for collective sale if the lots are
more than 10 years while a 90% share value is required for lots which are less than 10 years. In principle,
I agree that the 80% and 90% share value requirement will facilitate en-bloc developments. However, the
10-year time period requirement may result in wastage of resources. This is particularly so for
developments which are less than 10 years old. Technically, the life span of a building is about 60 years
before physical obsolescence takes place. But in a fast-pace society like Singapore, buildings tend to
 10

have shorter life span due to economic obsolescence and changing social trends.

Despite this, it is wasteful to facilitate en-bloc sale and development of buildings that are less than 10
years old. In fact, with the introduction of new building materials and technology, buildings are built to last
much longer. Thus, I hope the Ministry will reconsider the time period requirement for en-bloc sale
application.

In addition, it would be prudent to specify that applications for en-bloc sales for developments below 10
years should obtain approval from the Minister. This would curb any speculative developments which may
have other repercussions or economic implications.

Distribution of sale proceeds

One of the stumbling blocks in en-bloc sale is the obtaining of consensus among subsidiary proprietors
or owners with regard to the sharing of the sale proceeds.

Subsidiary proprietors or flat owners often have differing opinions as to the methods of sharing the
proceeds. This has indeed hampered a number of potential en-bloc sales. The Bill has not addressed this
problem. To facilitate en-bloc sale, the Bill should state clearly the method or formula for sharing the sale
proceeds. Based on past en-bloc sales, the use of share value has been commonly adopted as an
acceptable means to distribute the sale proceeds.

Jurisdiction of Strata Titles Boards

Clause 14 has removed the jurisdiction of the Strata Titles Boards to adjudicate disputes between
management corporations and developers. In practice, management corporations often encounter
problems when taking over new developments from developers. These problems may range from simple
disputes concerning handing over of relevant documentation to major disputes such as repairs of major
building defects. Very often, these disputes are technical in nature and could be either mediated or
adjudicated by the Strata Titles Boards. However, with the new amendment, all these disputes would
have to go to the courts for settlement. As such, it may create an influx of cases, thus hampering the
efficiency of our courts.

Instead, we should expand the jurisdiction of the Strata Titles Boards to adjudicate disputes between
management corporations which have become common in recent years.

Composition of Strata Titles Boards

Clause 11 increases the number of persons on a panel from which the Strata Titles Boards may be
formed to 24. The increase of panel members from 20 to 24 is probably attributed to the increase in the
number of strata title developments, and the amendment in section 86 which allows parties to a dispute to
have a say in the choice of members forming a board.

As the real estate and construction industry is small, it may be better to increase the panel members so
that the Minister would have more leeway to appoint one or more Strata Titles Boards to expedite dispute
settlement.

Thus, I would suggest that in line with the principle of appointing management corporation council
members, we should allow the Minister to appoint a panel of members but subject it to a maximum of 30
members. In this way, the number of panel members may vary from time to time depending on the
availability of expertise and the number of disputes.

Sir, I support the Bill.

Mr Shriniwas Rai: I am obliged to you, Sir, for giving me this opportunity. Sir, I rise to support the Bill
and I congratulate the Minister for agreeing to send the Bill to a Select Committee. This has been
 11

proposed by Members as well as the public, because it is a very important question that we are going to
deal with, ie, the question of property rights.

I must, first of all, declare my interest. I am a practising lawyer and I am also a member of the Strata
Titles Board.

Sir, Singapore has limited land supply and it is of utmost importance that we utilise this to the maximum
benefit of the community. This is why the success of Singapore has largely been attributed to the very
equitable way in which land acquisition has worked. In this particular case, no acquisition is being made.
All this Bill hopes to do is to facilitate en-bloc sales.

Mr Speaker, Sir, one question that has bothered me and other Members is this 10-year period. It is not
adequate. We should at least allow a minimum of 15 years. I am happy with the requirement of a
percentage of at least 80%, because I think that is also the practice in other jurisdictions. Prof. Chin also
spoke about the Strata Titles Board. Sir, the Strata Titles Board is made up of the President, Deputy
President and two other members. In fact, it is better than what you get in the High Court because in the
High Court only a single judge hears the matter. It would also be more expensive and time consuming.

The other advantage which Members may want to know is that the Board always tries to mediate. In
fact, I have been sitting on the Board for more than a year now. The matters which I have dealt with have
always been settled without going through a full hearing. So I would like to tell the Members of this House
that the Strata Titles Board may be a more appropriate panel because it is made up of people who are
not just lawyers but also engineers and architects who appreciate the dispute better. So I hope Prof. Chin
would change his view after hearing my arguments.

Sir, there have been some complaints from members of the public, both in the news media as well as
some people who have approached me. I know of a case of a retired librarian in the University of
Singapore who lives in Holland Road. Her worry is that if her property is put up for en-bloc sale, she
would miss the company of relatives who are nearby and other facilities. But I tell people who have this
problem that it is in the interest of the community at large and especially, in view of the MRT
development, that we should allow maximum utilisation of our land. We have got limited land supply and
community interest must take precedence over that of the individual right. As I said earlier, one of the
advantages that we have is that because we did not enshrine in the Constitution the right to own property,
as some other countries did, we have this development.

Sir, I move to another area which I am a little concerned. Prof. Chin has also mentioned this. This is
new section 84A(10). The notice to be given requires only two days' notice. I do not think that is sufficient.
If you post a notice on Saturday, the next day is Sunday. I think we should at least have a minimum of
five days' notice. Another Member also raised the question of who is to give notice. I think that could be
easily addressed. The Registry of the Strata Titles Board would give the notice where members have not
been served. It could be a condition that before an application is heard, all the parties have been served
properly.

Sir, another area that I am concerned is this. If we do not change the law and allow, as I have said
earlier, the period of 10 years to stand, then a lot of properties that have been developed recently and are
in good condition would be torn down and rebuilt, which would be an economic loss.

Another area which I think we should also consider is that probably the owners of terrace houses in
older estates may wish to have them developed if the plot ratio is increased from two storeys to three
storeys. Because some of these estates are in fact in worse condition than some of the HDB estates
which are better managed. This is something which the Minister may want to consider.

Sir, the office of Registrar is being created and I am grateful to the Minister for this because, with this
amendment, many applications could be dealt with by the Registrar. So the full Board does not have to
sit. All we require is the Registrar to deal with applications which are not controversial in nature and it
would be helpful when the law comes into existence to appoint a Senior Legal Officer as the Registrar. At
 12

the moment, the person holding office is actually qualified for District Judge. I hope the practice will
continue.

As I said earlier, I would like to assure Members once again, my experience over the years is that both
parties always want to discuss the matter and, in fact, in most cases, mediation succeeds.

Sir, I support the Bill.

Mr Simon S C Tay (Nominated Member): I am much obliged, Mr Speaker. I rise to welcome the
reference by the Minister of State of this Bill to a Select Committee, which some of us have asked. I think
we need to carefully consider the Bill because we are changing existing rules and private rights. We are
changing the ball game. And I want to share some comments and thoughts with the Minister, hoping that
this will go to the Select Committee, based on four topics: first, the question of public interest; second, the
difference and balance between private property and what the Minister of State has called "communal
living"; third, the safeguards; and fourth, the use of the Strata Titles Board as opposed to court.

The first is on public interest. As many Members have said, land is a scarce resource and
Singaporeans accept the principle of land acquisition for public interest by the Government. Some,
however, will feel that these amendments differ on the public interest but instead serve windfall private
profit. I also agree, as many have pointed out, that there is a public interest to protect Singapore's
landscape against slums. However, I urge us just to consider that this concern can be met much more
simply. Government authorities may issue orders to management councils of such slummy buildings to
maintain properly or to face court proceedings. And if they persistently refuse or fail to do so, then
condemnation orders can be served or the management corporation may be dissolved. So I do not see
this strongly as a matter of public interest. It is more a question of that majority in the building of private
owners against a minority.

It is certainly true that under the present law, many may be frustrated. Some have called this the
tyranny of the minority. I believe the Minister of State used this term in an earlier parliamentary sitting
when he introduced the outline of the present Bill. But others did not see this as a tyranny but rather as a
minority simply protecting their rights. They point out that the majority is not stopped from selling their
units if they choose to do so. What they cannot do is to get the windfall premium by selling en-bloc. No
one is trapped in a building but they are stopped from selling somebody else's house under them. And I
think in this sense, this is a debate not simply about efficiency in land use, about abstract rights. This is a
debate about the idea of Singapore as our home. We have encouraged home ownership. We wish that
Singaporeans feel that the nation is their home, their permanent home which no one can take from them.
Of course, this is best served by allegiance to the nation as a whole. At our National Day, I am sure many
people will feel that allegiance. But on normal days, in our dreams, in our thoughts, in our hearts, that
sense of rootedness of home belongs to one's specific home, one's specific neighbourhood. And in many
ways I think that is why private property in Singapore has demanded a premium not merely for the
facilities or the quality - the HDB quality is going up all the time - it is for that idea that this home is a
private property belonging to me.

Therefore, I do not agree that condominiums are about communal living. The way I look at it is what is
common is very small. If we ask ourselves: can somebody by vote at the management committee invite
them to my front door, I think the answer is no. If the answer to an invitation to the front door is no, then
how can it be that the majority can also sell out not just my front door but my whole house from under
me?

So I want to distinguish between this idea of public interest and the majority in a private building and,
secondly, the idea of communal living against the idea of private property. As I said also, there is an
emotional attachment to a home and this is very difficult to translate purely to monetary terms. As such, I
share the concern many Members have expressed that the conditions of a bona fide sale at arm's length
transaction are simply not enough. The attachment which an older member may feel for his or her home
of 20 years would be considered irrelevant in this equation. This is a monetarisation of emotional
attachment and that idea is contrary to the idea of Singapore as home.
 13

There are many personal reasons for preferring not to sell. It includes circumstances like the owner,
such as an elderly or ill person, who may not be able to stomach the idea of having to pack everything
and move. There is a convenience factor of being near to other family members or the school or
amenities, or to simply a neighbourhood with which you are familiar. Additionally, there are hard
economic reasons for some preferring not to sell. The purchase price paid by different owners at different
times may vary considerably. For example, a condominium unit that fetched, say, a quarter million dollars
in 1986 or 1987 may cost by 1990 some $400,000, and then 1994, perhaps at the height or later, to fetch
$1 million for the same unit, more or less. As such, if an en-bloc sale results in a price of $1.1 million, say,
to all the buyers, the profit of different owners would differ considerably. And so they have different
incentives to sell. This is a rational decision, not an emotional one. This is a hard dollar and cent reason
for us to help people hang on to their properties and not have them pried out from their hands. And, of
course, I do not think this House needs to remember that in the present market where prices are lower
than the peak, it could result in a loss. I am gratified that the Minister of State now says that we guarantee
that deals do not go through if they result in a loss.

I move on to my third point that more safeguards are needed. I share Prof. Chin's concerns that it is the
court who is much more appropriate to fathom the mixture of personal loss, economic loss, rather than
the Strata Titles Board. And I do not echo the sentiments expressed by my fellow NMP Mr Rai. I also
share the concern that if we are to consider any factors put forward by anyone, this is not in the Bill as
drafted. I think we have to consider this particularly because, as I understand them, en-bloc proposals
may differ considerably not just in terms of price but also in additional terms such as preferential
treatment for new apartment once it is built, rent-free periods - all these differ from deal to deal - and there
must be room for the Board or the court to fully consider these reasons as well as the price. I also noted
the Bill, and the Minister of State has emphasised mediation. But I suggest that this mediation is not
sufficient because if it fails, the majority can still rely on the price.

I share the concern about the timeframes regarding the 10-year properties and the voting percentages
outlined earlier by the Minister of State. I wish to finally close on just a few broader points or suggestions.

The first is that when this Bill goes to a Select Committee, I ponder who would speak for the minority
owners. I think the developers are well taken care of. They are well organised and can speak with an
equal and loud voice. There has been some anecdotal evidence about Kim Lin Mansions or other isolated
cases. The Minister has not shared with us how much feedback, how many complaints. And I would ask
that the Select Committee go beyond just being open to views but rather seek to survey, study and
genuinely solicit views.

The second wider suggestion I have is that the Bill be better served and the minority interest better
protected if the majority who wish to sell be placed in a fiduciary relationship to the minority whereby
undertaking the sale, they will take on duties to safeguard the interest of the minority as best as possible.

The third and a more general point I wish the Minister of State to put before the Select Committee is
that, might it not be better not to exchange existing private rights, but rather to change them prospectively
for land and developments that will now arise. This of course has the disadvantage of making different
types of land and making choices more complex. But this has the advantage of making sure the people
who are presently situated in one system of rights do not find that system changed to their adversity.

Mr Jeyaretnam: Mr Speaker, Sir, may I voice my unhappiness about the Bill. A number of other
speakers, particularly Prof. Chin and the speaker following him and now Mr Simon Tay, have voiced their
concerns which I was going to voice, and so I do not propose to repeat them. Suffice to say that I think
they are well-founded and these views must be given sufficient consideration.

Mr Speaker, Sir, let us not make any pretence. This is not a case of a minority or even a single man
holding out against the society. It is not a question of society's interests that will be adversely affected if
we give way to the man's wish and freedom to do what he wishes. This Bill simply panders to the greed of
the developers and the other co-lessees who see, as has been said, a way to get rich quickly. That would
 14

appear to be the only reason for this Bill. There is no question of any national interests coming into this.
There is, as has been pointed out, the Land Acquisition Act and even there, let me say, it is felt by many
that that Act itself is being abused from its primary, original purpose which was that it should only be used
for national interests; it is used for lots of other reasons now. So let us not pretend that a minority, even if
it be a single man, is holding society to ransom.

This adds another instance to the list that is already growing in Singapore where the citizen is coerced.
He is coerced to do something against his will, against his freedom to do what he wishes to do. Is that the
kind of society we want in Singapore where a citizen is coerced at every turn and corner? Or is it a
society where the citizen feels that he is free to make his own choice provided of course it does not harm
the society at large? I am sure the answer to that must be quite plain.

The second point that I wish to raise, and that has been raised by Prof. Chin, is why cannot we allow or
ask the majority of the owners to take their application to court. What is wrong with the courts hearing it?
Then at least we have an open public hearing. We will have representations on behalf of the minority and
we will hear representations from the majority. In a hearing before the Strata Titles Board, we do not get
this openness and we may not even get a reasoned decision from the Board when they do come to make
a decision. But the courts do have to give their decision. So is it not more preferable that this matter
should be left to the courts? After all, they are vested with the judicial power in this country and we should
allow them to function in the role that they are intended to function and not keep taking away from the
courts their function and giving it to statutory boards and civil servants and the like.

My objection to this Bill is on principle. I think it is wrong to force one man to give up his property. I do
not want to go into the reasons why he may be against the sale. Some reasons have been advanced but
whatever it is, it is the principle. Do we rob a man or woman, as the case may be, of his or her freedom to
do what he or she wishes to do with the property? Why is that necessary in Singapore? As I said, in a
number of things, citizens are now being coerced. I think there should be a limit to this coercion.

Mr Chiam See Tong: Thank you, Sir, for allowing me to join in this debate. I am surprised, Sir, that the
Government should succumb to the greed of property owners and take away the principle of unanimity in
regard to en-bloc sales. In 1987, at the last major amendment to the Land Titles (Strata) Act, the
Government held firm to the principle of unanimity as regards the sale of the whole development
comprised in a Strata Title plan. Why should the Government now make a complete about turn and go
back on its own belief?

I believe that the principle of unanimity is correct and the Government should hold on to it. The
principle has been upheld by the Government up till now because it believes that the minority interests
must be protected. There will normally be a few people who live in a large block of private flats who do
not want to be moved out. These people are not spoilers or people who want to hold the other flat owners
to ransom and demand high prices for their own units. They just do not want to move out whatever the
going price is paid to them. I know of such instances in a private development where an en-bloc sale was
proposed. Each flat owner was offered about $1 1/2 million as compensation. Those flats were first
purchased in 1969 for only about $27,000 each. So the price of $1 1/2 million was a windfall. It was like
touching a lottery. But there were two ladies who refused to sell their units. Those two flat owners did not
ask for more money. The compensation paid to them was not an issue. They just do not want to move out
and live somewhere else. Many people of course will call them stupid or unable to comprehend them for
refusing such large sums of compensation money. But if we value freedom and value the principle that
one has a right to live where one chooses for whatever reasons, then I believe we can start to understand
the refusal of those two ladies to budge from their places of residence.

Normally, one is only forced to move out of one's home in times of war, or in times of natural disaster
like an earthquake, or where there is a widespread contagious disease in the community, or one's
property is required for public development. Other than those instances, I do not think that in a civilised
society, one should be forced to be evicted from one's own private property against one's own will. The
governments of other countries may want to do it to their own citizens. But I do not think that we should
follow them. If a property owner wants to make money out of his own property, he is entirely free to do so.
 15

But I do not think that he has a right to drag other residents into his money-making scheme if the other
residents do not want to have a hand in it.

I think a society must have some ideals, some principles to hang on to. If a society has no principles,
no ideals at all, that society, for the short term, may prosper but in the long run, it shall surely collapse. I
cannot accept the belief of a well-known businessman in Singapore when he said that everything is up for
sale except his own wife. I am certain we do treasure certain things which cannot be sold whatever is the
price offered.

Expediency as a philosophy is not a good philosophy for our nation. The American nation, despite its
commitment to business and seeming expedient ways, has endured for over 200 years, because it still
holds on to certain sacred beliefs and ideals as enshrined in its constitution. As for Singapore, it must not
throw all ideals and principles to the wind. For me, I believe in the sacrosanctity of my home. I should be
allowed to stay in it as long as I like. I therefore cannot support a law which will allow others to force me
out of my home all because they want is to make more money out of it.

Assoc. Prof. Ho Peng Kee: Sir, first, let me thank the many speakers who have spoken. Since the Bill
will be going to a Select Committee, I will not address all the points, especially the technical ones which
can be considered at the Select Committee. However, Sir, I should take this opportunity to outline the
reasons why the Government has taken this approach.

As stated by many Members, the underlying objective of the Bill is recognising land is scarce in
Singapore and the fact that the plot ratios of many developments have been enhanced, there is a need to
facilitate the realisation of more housing units for Singaporeans. We are talking in many cases of prime
areas, freehold, 999 years. From the records that are available, some developments have yielded two to
three times more units for ourselves, for our children. So this is a step that we take which will have long
term impact.

Of course, as many Members have stated, yes, indeed we are dealing with property rights that can be
sensitive. But I think we have to also understand that in land scarce Singapore, we should not flinch from
taking measures that are necessary which will benefit both Singapore and Singaporeans, which indeed
we did in the 1960s when we introduced land acquisition. These land acquisition policies have facilitated
and resulted in developments that have made Singapore one of the best cities in the world. Of course,
some Members may say that the example may not be quite the same. But I would argue that there is a
public interest element, not just in land acquisition but also in en-bloc sale. Let us not forget that, unlike
land acquisition where a person's property is acquired, he may lose out financially, the distinguishing
factor here is that in an en-bloc sale, the minority owner would very often benefit substantially financially.
That is the first point I want to make.

The other point which we should also bear in mind is that, like I have said in my speech, the new
scheme will not apply to landed properties, even though one of the Members had urged for it to be
applied to terrace houses. I think the difference is fundamental and this is one point that perhaps
Singaporeans do not fully grasp, the legal significance of buying a condominium where what a person
buys into is a strata lot. He buys into common property. He is designated share values in common
property. He has no specific land lot. He has got strata rights, essentially enjoyment of the air space
where his unit is located. So what the majority want to do, in effect, is to exercise their rights over the
common property. If there are 99 owners in a 100-owner development, assuming the share values are
equal and equal area also, what the 99 owners say is, "We want to exercise our rights to sell this strata
development" where every owner who comes into this development, unlike buying landed property,
knows what he is going in for.

The other point, of course, is besides just the legal nature, one cannot understate the fact of communal
living in strata development. And this is another point, which is that Singaporeans over time will better
understand what the Land Titles (Strata) Act is all about. It is a complex Act with 130 sections. Why?
Because living in a condominium is not just buying your own property and living away from everybody
else. There are legal duties; there are legal liabilities. And that is why a management corporation is
 16

formed in all developments with powers over many areas. So this is the other point which we should note.

Members have talked about the 10-year rule. Our approach, as I said in my speech, is not to dictate
which developments are ripe for en-bloc sale. We leave it essentially to the owners. So there is minimum
intervention, unlike Mr Simon Tay who had asked why we do not stipulate terms and conditions in the
sale and purchase agreement. We take a non-interventionist approach. I think the starting point is that we
leave it to the majority owners. If 80%-90%, all like minded, all with their own faculties to decide what is
best, say that this is the way to go, provided, of course, the transaction is at arm's length, there is no
collusion, then the sale goes ahead.

Mr Simon Tay: Sir, I just want to clarify that I did not mean that I was encouraging the Bill to allow
stipulation of terms and conditions. I was only pointing out that terms and conditions in different en-bloc
offers do differ, which may then have to be considered by the Board.

Assoc. Prof. Ho Peng Kee: Thank you for the clarification.

Sir, going on this basic objective of creating more space for Singaporeans, we have decided on the 10-
year rule. Going on present records, it will not lead to national wastage. One or two speakers had asked
whether the 10-year rule, where the buildings are relatively new, would lead to wastage at the national
level. From the records, only about 20% of en-bloc developments have been less than 10 years.
Nevertheless, we also know that there may be good reasons why owners in a development which is less
than 10 years would want to sell en-bloc. It could be because the plot ratio has been enhanced
substantially. It could be because the development is next to a vacant plot of land and there is reason to
sell it so that development can be built on a larger piece of land. Or it is next to another development
which is perhaps also less than 10 years old, but it makes economic sense to sell it together. As the
approach we take is to facilitate en-bloc sale, we have adopted the 10-year rule.

Mr Lew says that this will mean that it goes against another objective which is to rejuvenate estates.
That is a secondary objective. In time to come, when estates become older, I think this will come to the
forefront. But at the moment, the primary objective is to help realise enhanced plot ratios so that many
more homes can be created for Singaporeans.

The other big area that we looked at was the role of the Strata Titles Board. I think, like I have said in
my speech, it is an important safeguard. The Strata Titles Board will be enhanced. There will be more
members. And as Mr Rai has rightly pointed out, based on personal experience, the Board comprises
senior professionals in the various fields which are relevant to what the Strata Titles Board will have to do,
not decide on the law, but decide on whether the sale price is one where there is no collusion, decide on
the method of distribution, whether it is unfair to the minority owners. The composition of the panel will
ensure that this task is better done, rather than a judge sitting in court fettered by the rules of evidence.

The other point, of course, I think Mr Rai again brings it out poignantly is the mediatory role of the
Board, which again a court will be less suited to do. In a more informal setting, the Board takes a
mediation role. That is very critical. As I have said in my speech and Mr Rai, based on his experience,
has also backed up, in many cases, the Board will mediate. In many cases, they will succeed in
mediation. In many cases, people who may not want to sell, especially those who are not based on
financial reasons, if there is skilful mediation, if the parties, especially the majority parties, are encouraged
to give some latitude to the minority owners, maybe arrange, if a person wants to live in the area, for the
developer to give a right of first refusal, so that he or she can continue staying in the area, relocation or
whatever, I think many of these problems can be settled. The Board will be much better.

The other point which I want to say is that I would agree that we should not typecast majority and
minority owners, because there are minority owners who may not want to sell based on financial reasons.
Yes, there will also be other minority owners who, because of emotional or sentimental attachment, do
not want to move. Therefore, I would agree that we should not fix them with the term "tyranny of the
minority". When I used it in this House in the earlier debate, it is not to characterise them with a slur, but
to describe the situation where one person saying no will prevent the transaction from going through. In
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this sense, it is one person's objection which has prevented the realisation of the desires of the vast
majority.

So the corollary to that is that we should not characterise majority owners, which has been done in this
House by several speakers, that they are greedy, they are avaricious, all they want is to make money. I
think it is not fair on majority owners, if it is what they are waiting for. But it does happen that
Government's actions result in certain people getting richer, getting a windfall. So shall we begrudge that?
I would say no. Shall we facilitate it? Well, if it results in a public interest being met, which is the creation
of more homes for Singaporeans, a lot of them in prime freehold areas, then I will say yes, provided, of
course, there are sufficient safeguards, and the interests of all parties are taken into account. And this
indeed is the approach we take in the Bill, if you look at the specific criteria in the Bill taking into account
all the objections of the minority, all the circumstances of the case, all the interests of the parties.

Nevertheless, part of the basic approach is that we know that it would be difficult to go away from basic
objective criteria. That is why I said in my speech earlier on in this House, that the primary function of the
tribunal would be to see whether it is an arm's length transaction, bona fide, no collusion and so forth.
But, at the same time, there may be exceptional circumstances. I have mentioned one, which is that no
party should lose out financially. If you sell your property at a loss or you sell your property and you
cannot redeem it with the bank, then it will be a ground for the Board to intervene. So let us take that
approach and see how the Board works.

Sir, the Bill will go to a Select Committee. So I do not think I need to go into the details. I want to thank
Members for their many suggestions. Some of them are technical suggestions to improve the working of
the Board, to improve the working of the Bill, which can be considered at the Select Committee.

Mr Jeyaretnam: Sir, the Minister of State seems to base his main ground on land scarcity in
Singapore. That would appear to be the primary reason. Has the Government considered taking over
some of the golf courses? Do we not have too many golf courses in this country?

Assoc. Prof. Ho Peng Kee: Sir, this matter of golf courses is nothing new. Government has defended
in this House why certain lands are designated for golf courses because they cannot be used for built-up
developments.

Question put, and agreed to.

Resolved,

"That the Bill be committed to a Select Committee consisting of Mr Speaker as Chairman and such
Members as the Committee of Selection may nominate." - [Assoc. Prof. Ho Peng Kee].