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RECENTLY the Government sought the views of the public (twice) through its Working Committee (WC) to give clarity/equity to en-bloc sales (EBS).

There are also a number of court cases on EBS.

The Strata Titles Board (STB) members who rule on EBS matters are volunteers. I think it is appropriate that a judge take charge of the STB to give confidence, guidance and consistency in STB’s rulings.

One thorny/disturbing issue is the Apportionment of Price in an EBS.

The Singapore Institute of Surveyors (SIV) recommends three methods and/or a combination of the three.

The prevailing method is to use a combination of the shares value (SV) and built-in area (PSF) methods.

This is generally acceptable when the types and sizes of the properties are uniform. However, injustices happen when various types of properties and different sizes are involved and, worse still, disproportionate SV.

The Commissioner of Land, in apportioning SV in the early days, obviously had in mind maintenance charges and matters pertaining to the common property and voting rights in condo living and not EBS. Hence the use of SV apportionment is called into question when it is used for EBS price apportionment.

It is misconceived and misplaced .

By way of illustration, is it not absurd that by using the SV method - even on a 50 per cent (or higher) apportionment - a townhouse more than four times the size of a studio flat is given only 5 SV and the studio 3?

This leads to great conflict and unhappiness especially when the majority insists SV be the major component in price apportionment. An oppression of the minority arises needing the court’s intervention.

Is it not the market’s norm that property is sold and bought on PSF basis?

Have you ever seen property bought and sold or advertised on SV basis?

Does it not make more sense and would it not create less conflict if the PSF method were to be used for the built-in area and the SV method, if at all applicable, be confined to the common area?

It does not hold water to argue that a smaller area commands a higher value; in fact, a quick glance at the property ads will show that the opposite is equally true.

Also, would it not be ideal that EBS be handled by an independent (non-resident) official sales tribunal (if feasible) to do away with all the vested and conflict of interests of the sale committees and also to ensure fairness and transparency?

There should also be a qualified tribunal to look into apportionment of price issues and make fair and equitable rulings and not leave it to estate agents and sales committees members to decide.

They are hardly qualified or impartial enough to make price apportionment decisions.

Richard Chia Chee Keong
 
Source : Straits Times - 1 Aug 2007