|
Step 1:
|
Requisition for Extra-ordinary General Meeting (EOGM)
The first formal step in starting the collective sale process is requisition for the first EOGM to elect the Collective Sale Committee (CSC). Experienced property consultants and lawyers will be able to assist with requisition templates.
|
|
Step 2:
|
Formation of Collective Sale Committee
CSC members have a fiduciary duty to act as trustees of all owners in the development and should act in good faith at all times. It is advisable to form a strong, active and committed team who is prepared to engage with the owners.
|
|
Step 3:
|
Appointing Professional Consultants
Once a CSC has been formed, the sale committee should proceed to appoint a property consultant and law firm in connection with the collective sale. The recommended set of criteria should be around three key factors – experience and knowledge, communication skills and fees.
|
|
Step 4:
|
Terms & Conditions of the Collective Sale
The appointed property consultant and law firm will guide the CSC in setting the reserve price, method of apportionment and the terms and conditions of the collective sale. Once these have been determined, the next EOGM will be convened to appoint the property consultant and law firm (where the CSC has not been authorised at the first EOGM to make such appointments) and approve the method of apportionment and terms and conditions of the CSA (including the reserve price).
|
|
Step 5:
|
Obtain Requisite Majority Consent
After the apportionment method and the terms of the CSA have been approved at the EOGM, consenting owners can proceed to sign the CSA. Developments which are less than 10 years old will require 90% owners; consent (by share value and strata area), while those aged 10 years and above will require 80% owners’ consent (by share value and strata area). The requisite majority consent (80% or 90% majority depending on the age of the development) must be obtained within one year from the date of obtaining the first signature to the CSA.
|
|
Step 6:
|
Securing a Buyer
In the event the tender does not yield a definitive outcome, the sale can then be concluded through private treaty, within a 10-week period from the date of close of tender. The buyer must be secured and an application made to the Strata Titles Board within one year from the date of obtaining the requisite 80% or 90% consent.
|
|
Step 7:
|
Application to Strata Titles Board
After securing a purchaser, owners of collective sale developments that do not have unanimous consent are required to submit an application to the Strata Titles Board (STB) for an Order for sale. An independent valuation report to comment on the method of apportionment is required for the submission. For collective sale projects that fail to come to a settlement at STB, an application will be filed to the High Court.
|
|
Step 8:
|
Completion of Sale
Completion of sale usually takes place 3 months from either the date of sale contract, the date 100% owners’ consent is obtained or the date the STB, High Court or other court approves the collective sale of the development. Monies in the management and sinking funds will be returned to the owners after final auditing of account.
|
|
Step 9:
|
Delivery of Vacant Possession
Owners are usually given 3 to 6 months to deliver vacant possession after completion of sale.
|
|
The collective sale process is often a complex and lengthy exercise, with no certainty of success. It is advisable to seek professional advice and guidance from experienced property consultants on the viability of your estate and to guide you through the collective sale exercise.
|