PROPERTY EN BLOC
En bloc lists are taken based on the past en bloc attempted by the respective developments. Listed en bloc properties may or may not have en bloc potentials. The success rate is extremely low for en bloc re-development.
The potential sale proceeds serve as a carrot for homeowners to sign their consent. En bloc collective sale deal is likely to fall through if the asking price is too high. Developers must reap a reasonable profit margin from the collective sale with a view of redeveloping the property into a new project for sale in the future
1) to appoint members of a new Collective Sale Committee (CSC),
2) to empower CSC to appoint a marketing agent, lawyer, valuer and/or consultants for the purpose of the collective sale,
3) to empower CSC to perform duties and functions as stipulated by the Land Titles (Strata) Act (LSTA) and/or any governing bodies’ laws / schedules.
To requisite EOGM for en bloc process, at least 20% of owners’ consent are required. If it is within two (2) years from the last failed en bloc attempt, 50% of owners’ consent are required.
Prior to the collective properties for sale,
1) minimum 90% consent from owners required for development that is less than 10 years old or
2) minimum 80% consent from owners required for development that is more than 10 years old.
The common resistances against en bloc are the low en bloc asking price, replacement property of similar size and location. Some owners may be liable to pay seller’s stamp duty if the collective sale takes place within three years from the date they bought the property. Foreign nationals and 2nd property owners onward would also have to fork out additional buyer’s stamp duty if they were to buy a replacement property.
How to identify properties with En Bloc potential?
En bloc potential properties are likely older developments of more than 25 years. The design and appearance of the properties are out of date and the plot ratio is normally not fully utilised. The allowable plot ratio across Singapore under the Urban Redevelopment Authority (URA) master plan can be found at https://www.ura.gov.sg/maps/?service=MP
One has to do research on the development’s zoning, land area, potential plot ratio enhancement, past / current price transactions and if there were past collective sale attempts and why they failed.
There could be a sharp rise in land and property values in tandem with the economic growth, an exciting new development or a new MRT station nearby. These may result in your property’s land spaces not used efficiently. If your property has large open spaces or mostly low-rise blocks, there may be a chance of en bloc potential.
Potential plot ratio enhancement is when the plot ratio in the prevailing URA master plan is higher than the development’s existing plot ratio, the land can be redeveloped into higher Gross Floor Area (GFA).
Freehold versus leasehold en bloc properties, Age (older developments have higher success rate), Scarcity of vacant sites, its location and proximity to amenities and transport hubs, Good collective sale committee, lawyer, marketing agent and owners’ support level, Number of units in the development (smaller developments have better success rate), Market cycle and availability of quality sites on the Government Land Sales program, Premium of new sale and sub-sale price over the collective sale price, before and during the en bloc sale process, Act in good faith, yield the best price, with proper apportionment of the sale proceeds, so as not to create any ground for objection.
In en bloc sale, the entire property and land are sold collectively. For private commercial or residential properties, the buyers are usually the property developers, Singapore. At times, government may acquire the land en bloc for public uses or safety reasons, such as the Thomson Road building https://www.straitstimes.com/singapore/thomson-road-building-to-be-demolished-owners-of-residential-units-left-stunned-by-sudden
For freehold en bloc properties, developer does not need to pay to URA for any lease top up.