En blocs: Everything you need to know to avoid getting screwed by your neighbours

Photo Credits: Straits Times

The number one thing that all Singaporeans love (even more than stocks and REITs) is property. Start a debate about property valuations or HDBs vs Condos as an investment and even the most demure Singaporean will get hot under the collar.

Given the primacy of our residential prices to fellow islanders, and in light of the recent En-Bloc craze (Pearl Bank, Sim Lim Square etc), I thought it was an opportune time to discuss en-bloc sales. In this article, I will touch on:

  1. Decision making (How to decide whether you should participate in an En-Bloc)
  2. Timeline of an En-Bloc (Key milestones from start to finish)
  3. Objecting to an En-Bloc (Grounds of objection)
  4. Advanced techniques (How to ensure you don’t get cheated by your neighbours)

As you may know, Financial Horse is a lawyer by training. However, I do need to caveat that this article should not be your be-all and end-all when making a decision on en-blocs. This article is intended as a general guide, and may not apply to your situation specifically. Please also note the disclaimers below (job hazard, unfortunately):


The statements herein do not purport to be a comprehensive or exhaustive description of all the relevant provisions of the Land Titles (Strata) Act, or all the implications that may arise in respect of an en-bloc or private sale of your property. If you are in any doubt as to the action you should take, or on the implications of the Land Titles (Strata) Act to your situation, you should consult your property agent, solicitor, accountant or other professional adviser immediately.


Basics: En Bloc Sale

The en-bloc regime in Singapore is governed by the Land Titles (Strata) Act. If you are planning an en-bloc, take a look at Section 84 of the Act, it will set out almost everything you need to know.

The best summary of the rationale of an en-bloc comes from V K Rajah JA in the Horizon Towers case. I have set out an extract below, but in essence, a homeowner’s right to decide whether or not to sell his property is sacred. However, this has to be balanced with the country’s needs of urban renewal, as it is virtually impossible to get a 100% consensus for a sale. Accordingly, parliament, when enacting the en-bloc regime, took care to ensure that there are certain minimum safeguards to protect the interests of minority homeowners when they are compelled to sell their property.

The mandatory nature of a collective sale inevitably encroaches upon a homeowner’s entitlement to decide whether and when to sell his or her property and at what price. Although there is no constitutional protection of property rights in Singapore, a homeowner’s enjoyment of the property and the entitlement to decide on the sale of that property is undeniably an important one that can only be derogated from strictly in accordance with the law. A homeowner may have legitimate non-pecuniary reasons for refusing to sell a property, and for such a person, “the idea of compensation in pure monetary terms may be a poor substitute” … Whatever views one may hold on the desirability of the collective sale regime, Parliament has quite clearly decided to provide for this statutory scheme to essentially facilitate urban renewal … The Land Titles (Strata) (Amendment) Act 1999 (Act 21 of 1999) which came into effect on 11 October 1999 removed the requirement of unanimous consent for a collective sale application to be made. This was in line with Parliament’s aim to “make available more prime land for higher-intensity development to build more quality housing in Singapore” [emphasis added], and to that end, facilitate collective sales (Parliamentary Debates July 1998 at cols 601 and 634).

Parliament, nevertheless, was keenly aware that the interests of minority owners had to be strictly policed. The balance that has to be carefully struck between the rights and financial interests of the majority or consenting proprietors and the legitimate rights of the minority or dissenting proprietors is at the heart of the law on collective sales. In this regard, the LTSA scheme contains the “minimum standards of conduct [imposed by Parliament to ensure] that the whole process is fair, [and] transparent”… These “minimum standards” are the statutory baseline below which the majority owners cannot descend. Built within the LTSA scheme are important safeguards to ensure that minority proprietors, who are more often than not in a vulnerable position vis-à-vis the consenting majority, are “adequately protected from bullying and underhand tactics as well as any potentially collusive or improper conduct on the part of any of the majority owners” (Ng Eng Ghee v Mamata Kapildev Dave [2009] 3 SLR(R) 109 (“Horizon Towers”) at [3]). The need for procedural fairness and transparency cannot be overridden by the wishes of the majority proprietors (some of whom may concurrently be members of the SC) or by an undiscerning reliance on the policy of urban renewal…


1. Decision making (How to decide whether you should participate in an En-Bloc)

Do be careful not to be blinded by the amount of money being thrown around. You should note the following hidden considerations:

  1. Replacement Time and Costs

If the en-bloc is your primary residence, you will need to buy a replacement. If the en-bloc is an investment property, you may need to buy another property, or find alternative investment properties to replace the lost rental income.

When buying a new property, don’t forget to factor in the impact of Buyer’s Stamp Duty (BSD) and Additional Buyer’s Stamp Duty (ABSD). If its an investment property, you second or third property will incur 7% and 10% ABSD respectively. If it is your primary dwelling, you cannot purchase your new home until the sale agreement has been signed with the buyer/developer, or you will incur ABSD.

On a S$2 million property, this works out to about S$140,000 – S$200,000 for ABSD (assuming second or third property), and S$64,000 for BSD, so this is definitely something not to be trifled with!

On top of this, you also need to incur time and effort to hunt for and move to your new home. If you really enjoy your current location or view, you may not necessarily be able to find back a house you love equally.

ABSD Rates on the higher of the purchase price or market value

 Profile of Buyer

ABSD Rates from 8 Dec 2011 to 11 Jan 2013

ABSD Rates from 12 Jan 2013

Singapore Citizens (SC)1 buying first residential property

 Not applicable

 Not applicable

SC1 buying second residential property

 Not applicable


SC1 buying third and subsequent residential property



Singapore Permanent Residents (SPR)1 buying first residential property

 Not applicable


SPR1 buying second and subsequent residential property



Foreigners (FR) and entities2 buying any residential property



Source: IRAS Website

On or after 20 Feb 2018

Purchase Price or Market Value of the Property

BSD Rates for residential properties 

BSD Rates for non-residential properties 

 First $180,000



 Next $180,000



 Next $640,000



 Remaining Amount


Source: IRAS Website

  1. Cash flow issue

A 1 million dollar paper gain on a 2.5 million dollar property sale is amazing – until you need to buy a new house and the proceeds have not arrived.

Cash flow is a real problem. As you will see from this article, even after the sale agreement with the buyer is signed, there are many steps before you will receive the proceeds, if at all. In total, you are looking at anywhere from 1 year to 1.5 years from the time the sale agreement is signed, to receive your proceeds. If you buy a house in the interim, you will either need to take up a bridging loan, or use your saved up cash. You may not be able to take up a new mortgage to buy your new home until you pay off the existing mortgage on your en-bloc property. If you do, there are financing costs to take into account.

3. Time gap to purchase replacement

As a corollary of issues 1 and 2, this may potentially result in a time gap from the time when you sell your property, to the time when you buy back a replacement. In an upmarket, the market could have risen significantly in the interim, such that when you finally get the proceeds you many not be able to buy back a fancier/swankier apartment. Of course, this works both ways, and if the market crashes, you could be sitting on a massive windfall.


2. Timeline of an En-Bloc (Key milestones from start to finish)

  1. Laying the groundwork

At this stage, you will likely drum up interest for an en-bloc among fellow residents, and do basic due diligence on the recent en-bloc prices in the area. This gives you a rough sensing of how likely it is that your en-bloc attempt will succeed, and what is a reasonable price for your property.

  1. Starting the sale

The formal process is kickstarted by electing a Collective Sale Committee (CSC). This requires:

  1. The signatures of owners holding 20% of total share value or of owners comprising 25% of the total number of owners.
  2. If it is within two years from a previous failed en bloc sale attempt, you will require a higher threshold of 50% (by way of total number of owners or by their total share value).

As a general rule, owners should try to appoint CSC members representing all types of units in the development, to ensure that the interests of all types of units are represented. Candidates for CSC should also, at the time of election and at other relevant times, make full disclosure of any actual or potential conflict of interests. This will affect the “good faith” of the CSC below.

  1. Appointing consultants

The next step is to call for a tender, to appoint the property agent and lawyer. Apart from the fees, you should also examine the experience, track record, and amount of time each consultant can devote to selling your property. You should try to pick experienced and dedicated consultants, to ensure the smoothest en-bloc process.

Lawyer – The lawyer will manage the legal process and documentation for you. He is engaged on a fixed fee basis (depending on how complex/large your deal is). In most cases, the fee is on a “no sale no fee” basis, where the fixed fee is only payable if the en-bloc is successful. In some cases, the fee will be paid by milestones (eg. a fixed sum payable upon receipt of 80% approval).
Rough indicator of fees: 0.08% to 0.15% of gross sale proceeds. S$30,000 to S$50,000 the application to STB and another S$30,000 to S$50,000 for High Court hearing (ie. If STB did not grant approval).

Property Agent  The property agent is in charge of the tender and sale process. Like any other engagement, the property agent works on a conditional fee basis. This is typically done as a fixed fee component and a performance fee component (eg. if the valuation is S$100 million, they may charge 1% on any sale up to S$100 million, and 5% for any amount in excess of S$100 million).
Rough indicator of fees: 0.8% to 1% of sale price up to a “hidden reserve” price. 5% – 15% in excess of the hidden reserve price, depending on how aggressive the hidden reserve prce is. You should try to negotiate for a higher “hidden reserve”, to incentivise the agent to get a better sale price.

The consultants are either appointed at the Extraordinary General Meeting (EGM), or the CSC is empowered at the EGM to appoint the consultants.

  1. Setting a Reserve Price

The CSC will then propose a reserve price in the collective sale agreement (CSA). This is the minimum price at which the property will be sold.

The reserve price will take into account a number of factors, including market sentiment, the land area, the development gross plot ratio, special height controls (if any) and lease top-up premium (if any).

There is a bit of mindgames here, as a high reserve price will make it easier to collect the minimum amount of signatures from owners, but at the same time it will deter potential buyers. The CSC should commission an independent valuation to guide the CSC. They should also do due diligence to determine a reasonable price that fellow homeowners will accept. There is little point in going through all the trouble only to set a ridiculous reserve price that no developer will bid for.

  1. Method of Apportionment (MOA) *really important*

The MOA is perhaps the single most contentious point in the en-bloc process. After the decision of whether or not to sell your home, MOA is the number one factor to turn neighbours into sworn enemies, and creates an “us vs. them” mindset.

Simply put, the purchase price determines the price at which the buyer purchases the building. The MOA determines how much of this purchase price each homeowner gets. If the MOA says you should get 5% of the proceeds, you will get S$5 million from a S$100 million sale.

Theoretically, the CSC is supposed to propose a MOA that is fair and reasonable to all owners, and that should not disadvantage any particular type of units or class of owners. However, this is easier said than done. There is no “one size fits all” MOA for distribution of sale proceeds for en bloc sale, as each property is different.

The Singapore Institute of Surveyor and Valuers recommends one or a combination of two or more of the following methods or factors for a MOA, namely valuation, strata area and share value.

One potential way is to look at the share value, but this is problematic as it disadvantages owners on a higher floor, or owners who enjoy a fantastic view. It is worth noting that share value is approved by the Commissioner of Buildings at the onset of the development for purpose of determining the maintenance contributions and voting rights of owners in the MCST, and it is not for the purpose of apportionment of en bloc sale proceeds (take a look here for more information on determining Share Value).

Another way is to look at valuation, but ignoring the effects of renovation, facing or floor level. However, this is again problematic as many owners would argue that the facing, floor level, and renovation are crucial components that affect the amount they are entitled to.

Everyone thinks his unit or unit type deserves more than others, so as you can imagine, this will be hotly contested. Practically speaking, the MOA to be adopted must also be able to garner the support of 80% owners (90% if less than 10 years from TOP); otherwise the en bloc sale effort will fail since you will not be able to obtain STB/High Court approval at stage 7.

  1. Public Auction/Tender

To ensure that the highest market price is achieved, the CSC must conduct a sale by public tender or auction. This will allow maximum exposure of the development to the potential buyers so that there is competition to get the highest offer. The CSC must also obtain a valuation report prepared by an independent property valuer on the date of close of the public tender or auction.

Within 10 weeks from the close of the public tender or auction, the CSC may enter into a private treaty contract with a buyer. This is so even if no successful bids were received (for example, CapitaLand’s private treaty to purchase Pearl Bank)

  1. Approval from Strata Titles Board/High Court

Once the sale agreement is signed, the CSC will make an application to the Strata Titles Board (STB) to proceed with the en-bloc. The STB will ensure that the relevant approvals from:

1. 80% of owners by share value and area (if it is more than 10 years from TOP); or

2. 90% of owners by share value and area (if less than 10 years from TOP),

has been obtained. You can dispense with this step if you have unanimous approval for the sale.

At this point in time, any homeowner who objects to the sale can file an objection. The dispute will be mediated by the STB in the first instance. If it cannot be resolved by mediation, the STB will issue a Stop Order (putting the en-bloc on hold) and escalate the matter to the High Court.

The grounds of objection are of much interest, and I will dedicate a whole section to it below.

  1. Buyer takes possession

Once STB/High Court gives approval to proceed, the buyer will take possession of the property after a period for homeowners to move out (typically about a year). Once the buyer takes possession, you will finally receive the proceeds of sale.


3. Objecting to an En-Bloc (Grounds of Objection)

Of course, the easiest way to object is to not sign the CSA. However, even if you don’t sign, and your fellow homeowners obtain the respective 80%/90% approval, they can still proceed with the en-bloc without your consent. In such cases, your next opportunity to object is at Step 7 above. You can object on the following grounds:

1. Financial loss

You can always raise a valid objection on ground of financial loss. This is where the proposed sale proceeds, less stamp duty, legal fees, costs incurred in purchase, costs incurred pursuant to the collective sale etc, is less than your purchase price. While this is the easiest to prove, the CSC will almost always have considered this point when setting the reserve price, so this is unlikely to be a viable option

2. Not good faith

The Land Titles (Strata) Act states that Strata Titles Board or the High Court ‎will not approve a collective sale that is not in good faith, taking into account:

 (A)         the sale price for the lots and the common property in the strata title plan;

(B)          the method of distributing the proceeds of sale; and

(C)          the relationship of the purchaser to any of the subsidiary proprietors; or

Unfortunately, good faith is not defined in the statute, and we need to take direction from the landmark case of Horizon Towers. Essentially, the court held that CSC members are fiduciaries of all the owners including the owners who do not consent to the sale. The duties of the CSC members include:

(a)     the duty of loyalty or fidelity;

(b)     the duty of even-handedness;

(c)     the duty to avoid any conflict of interest;

(d)     the duty to make full disclosure of relevant information; and

(e)     the duty to act with conscientiousness to exercise its powers in the best interests of all owners, and to use all possible diligence to secure the best price reasonably obtainable.

What this means, is that if the CSC failed to discharge any of their duties above (eg. they failed to properly consider all competing bids at higher prices, they failed to consider all relevant factors when coming up in MOA, there was a conflict of interest by a CSC member that was not disclosed), that is potential grounds to set aside the en-bloc.

Ultimately, what amounts to good faith/bad faith is determined by the court, and depends heavily on the facts. Leave a comment if you would like to know more on this and I will look into writing a follow up.


4. Advanced techniques (How to ensure your neighbours don’t screw you over)

En-Bloc is no different from life. Give your neighbours a chance to screw you over for their own gain, and I can guarantee you that they will take the opportunity. It is a jungle out there (just look at Mandarin Gardens, or Horizon towers) and you really need to be on your toes all the time. To safeguard your interests, you can consider the following:

Join the Collective Sale Committee (CSC) – Information is power. The CSC determines the MOA, selects the consultants, and generally has an inside view into the entire tender and sale process. If you want to safeguard your interests, there is no better way than ensuring that you are a CSC member. This give you a wealth of first hand information the other owner may not be privy to, and may even allow you to ensure that your interests, or the interests of your unit type, are protected. By not being on the CSC, you are implicitly trusting someone else to look out for your interests. Is that wise?

Don’t sign the Collective Sale Agreement (CSA) – This may be slightly counter-intuitive, but not signing the CSA actually gives you some bargaining power.
For example, in the case of Allgreen, a number of minority objectors refused to sign the CSA. After the sale agreement was signed, they lodged an objection with STB/High Court. Unbeknownst to the other homeowners, the buyer then reached out to the minority objectors and offered to pay an additional sum if they were to drop their objections. Of course, the minority objectors accepted and the sale went ahead. The point of this case is that incentive payment arragenments (ie. A payment to an objector to sign the CSA) cannot be made by the CSC member or the property consultants. However, there is no similar prohibition on the buyer.
Of course, there is a bit of game theory involved here as well, because if too many homeowners refuse to sign, the en-bloc never goes ahead at all!

Control the Method of Apportionment (MOA) – As described above, the MOA is very very contentious, and you should always ensure that the CSC doesn’t use the MOA to pay themselves more money (especially if the CSC members all own a particular type of unit). Unfortunately, there are not many ways to control the MOA apart from joining the CSC. Your other alternatives are to not sign the CSA, or to raise an objection on grounds that the CSC was not acting in good faith when determining the MOA.

Rally like minded homeowners – This is where the us vs. them mentality comes in. If you are adamant on not selling your home, and there is a risk that the CSC gets the 80% signatures, you’d better start going out there and rounding up some like minded objectors, or try to convert some owners to your side. This dude even created a blog to fight against en-bloc for Tampines Court, so that’s the lengths some people will go to protect their home.

Go by the book (if you are the CSC and pro-collective sale) – If you are the CSC and in favour of an en-bloc, ensure everything is done by the book. This means ensuring all decision making processes are well documented and minuted, all relevant considerations are taken into account, and all relevant facts (including any potential conflicts of interests) are disclosed and addressed. Otherwise, this can be used against you as a grounds of objection to the en-bloc. Spare yourself the headache, and get it done right the first time.

Raise an objection under the Land Titles (Strata) Act – When all else fails, always remember that parliament has protected our interests in the Land Titles (Strata) Act. If all of the above fails, and you still need to object to the sale, you can always consider raising an objection on the grounds described earlier.

Closing Thoughts

Whichever side you are on, it is important to understand the procedure and the potential pitfalls when negotiating an en-bloc. Above all, always ensure that your interests are protected at all steps of the way, as raising an objection at the STB/High Court stage to get a “Stop Order” is a drastic remedy, and will earn you the ire of your neighbours.

How about investing in REITs with your newfound en-bloc proceeds? Find out why Financial Horse recommends Mapletree Commercial Trust here.


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  1. Hi
    If one refuses to sign the CSA, he/she cannot be a member of CSC( collective sale committee).
    There is a case, the development was short of two units to make up 80%, so two minority subsidiary proprietors were offered payment by a prospective buyer and the court threw out the case on the grounds of ‘no good faith’

  2. Wow! Horsey! So cynical one! I’m not sure why you use such strong language like “screw you over”. How is there “screwing over”? You either sign the CSA or you don’t. There’s no negotiation, or “screwing over” involved. You agree with it, or not. The end.

    While most of the stuff you say above is, in principle, possible; my personal experience is that it just doesn’t happen. The most popular MOA is evolving. Pretty soon it will be (I hope) 100%, or close to it, by valuation.

    • Haha! From my limited experience though, the MOA has been incredibly contentious and highly contested, with one camp always trying to tilt the MOA in my favour. I could be an overly cynical horse though. Really glad to hear that it hasn’t been as bad in your experience, there is still hope for Singapore!


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