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Collective sale of condominium - steps to a successful sale
11 Dec 2021 (246 views)  

For a collective sale to be completed, the owners of the units in a condominium have to go through the following steps.

1. Form a collective sales committee (CSC)
2. Get 80% of owners to sign a collective sale agreement (CSA)
3.  Advertise and get developers to submit a bid that meets the conditions set out in the tender and the CSA
4. Get the collective sale approved in the strata title board or high court

Part 1 is relatively easy. Many condominiums have reached this stage.

Part 2 is not easy. The CSC and the appointed marketing agent has to get 80% of owners to sign the CSA. Some owners are unwilling to sign unless the reserve price is set at a high level. The CSC often has to keep increasing the reserve price to get the remaining owners to sign the CSA. This may push the reserve price to a level that is too high to interest the developers.

Part 3 is more challenging. Many collective sale sites have been advertised. However, only a small proportion can find an interested owner. I do not know what is this proportion, but my guess is that is is less than 20%.

If there is no bid from a developer, the marketing agent may enter into a private negotiation with an interested developer. If the developer submits a bid that do not fully meet the requirements of the CSA, the CSC may call another meeting to inform the owners and go through another round to get 80% of the owners to approve the revised CSA (usually with a lower reserve price) that meets the bid of the developer.

Shunfu Estate is an example of a collective sale that had to go through a new round of singing of the collective sale agreement to lower the reserve price. See this report. 

Part 4 can pose a challenge. Some dissenting owners (who refuse to support the collective sale) may lodge an objection to the strata title board (STB). The STB will attempt to mediate on this matter. If the objecting owners are still not satisfied, the dispute has to be settled in the high court. This can be costly, and will take a few more months. However, most of the collective sales do not result in a dispute that goes to the court.

After the sale is approved by the Strata Title Board, the owners are given 3 months to delivery vacant possession. The owners (or their tenants) have to find alternative place to stay.

Recently, Chuan Park close the tender for the collective sale site and did not receive any bid. The marketing agent is now going through a private negotiation with a potential buyer. See this report. 

If they receive a bid, they will go back to the owners to get at least 80% to sign a new CSA.

I am the owner of two units in Thomson View Condominium. The tender will close in mid January 2022. I hope that there wil be at least a bid. If not, the CSC and marketing agnet will have to go through a private negotiation phase. 

Tan Kin Lian
 

Collective sale of condominium - steps to a successful sale
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For a collective sale to be completed, the owners of the units in a condominium have to go through the following steps.

1. Form a collective sales committee (CSC)
2. Get 80% of owners to sign a collective sale agreement (CSA)
3.  Advertise and get developers to submit a bid that meets the conditions set out in the tender and the CSA
4. Get the collective sale approved in the strata title board or high court

Part 1 is relatively easy. Many condominiums have reached this stage.

Part 2 is not easy. The CSC and the appointed marketing agent has to get 80% of owners to sign the CSA. Some owners are unwilling to sign unless the reserve price is set at a high level. The CSC often has to keep increasing the reserve price to get the remaining owners to sign the CSA. This may push the reserve price to a level that is too high to interest the developers.

Part 3 is more challenging. Many collective sale sites have been advertised. However, only a small proportion can find an interested owner. I do not know what is this proportion, but my guess is that is is less than 20%.

If there is no bid from a developer, the marketing agent may enter into a private negotiation with an interested developer. If the developer submits a bid that do not fully meet the requirements of the CSA, the CSC may call another meeting to inform the owners and go through another round to get 80% of the owners to approve the revised CSA (usually with a lower reserve price) that meets the bid of the developer.

Shunfu Estate is an example of a collective sale that had to go through a new round of singing of the collective sale agreement to lower the reserve price. See this report. 

Part 4 can pose a challenge. Some dissenting owners (who refuse to support the collective sale) may lodge an objection to the strata title board (STB). The STB will attempt to mediate on this matter. If the objecting owners are still not satisfied, the dispute has to be settled in the high court. This can be costly, and will take a few more months. However, most of the collective sales do not result in a dispute that goes to the court.

After the sale is approved by the Strata Title Board, the owners are given 3 months to delivery vacant possession. The owners (or their tenants) have to find alternative place to stay.

Recently, Chuan Park close the tender for the collective sale site and did not receive any bid. The marketing agent is now going through a private negotiation with a potential buyer. See this report. 

If they receive a bid, they will go back to the owners to get at least 80% to sign a new CSA.

I am the owner of two units in Thomson View Condominium. The tender will close in mid January 2022. I hope that there wil be at least a bid. If not, the CSC and marketing agnet will have to go through a private negotiation phase. 

Tan Kin Lian