The en bloc process in Singapore gained a lot of interest when the private residential market was abuzz with en bloc sales fever in 2017 and 2018. Since the 2018 property cooling measures were introduced, the en bloc fever has cooled. However, some housing projects, particularly smaller ones and boutique developments, are still undeterred from seeking windfalls via collective sale.
Additionally, some developers may revisit previously unsuccessful en bloc sites. Many failed en bloc sale sites cut their asking prices in their second and subsequent collective sales attempts. For instance, the freehold condominium Island View is set to be relaunched for collective sale on 5 March 2024 for $532 million, down from their previous $575 million asking price.
If you’re one of those hopefuls hoping for their condo development to en bloc, we’ve put together a guide to the en bloc process in Singapore. And if you’re not hoping for an en bloc but still want to sell your house at a good price, let us help.
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En Bloc Meaning: What Is En Bloc?
En bloc sales in Singapore refer to when the majority of the owners of a residential property decide to sell their homes at the same time.
These collective sales could also occur when there is an offer from the buyer’s side to the owners. Usually, buyers for an en bloc sale are the government or property developers.
En Bloc Process Timeline
| Set up a pro tempore committee to stimulate interest in the sale and persuade other owners to approve the sale | Two months |
| Establish a collective sales committee. Need 20% share value and 25% of the total number of unit owners voting in favour | One to two months |
| Engaging a law firm, valuer and property consultancy. With these experts’ help, the committee can draft the Collective Sales Agreement (CSA) | Four months to look for and approve experts. Two months to draft the CSA |
| Meeting the required number of signatures for Collective Sales Agreement (CSA). For developments 10 years and above, at least 80% of owners must consent. Newer projects need at least 90% | Three to 12 months |
| Conduct a public tender. Pre-marketing updates, updates on offers, and consideration of the Sale and Purchase Agreement will also occur | One month for the pre-marketing update. Two months for the update on offers during the public tender |
| Close tender exercise and an evaluation of the bids will occur. Negotiate via private deal if the offer is lower than the reserve price. Then, the winning bidder (if any) is announced | Four to five months, assuming no application to the courts |
| Application for sale order. Seek ‘order of sale’ from Strata Titles Boards or High Court | Three to six months |
| The collective sale is concluded. Vacate unit and turnover to the buyer; receive payment | Up to six months |
How Is the En Bloc Process Triggered?
The en bloc process can be initiated through two things. First, an entity such as a property developer, an investment fund or a consortium of home builders can give an unsolicited offer to acquire an entire private development, including its land, from its owners.
Second, the subsidiary proprietors (owners) jointly agree to launch their residential, commercial or mixed-use project for sale in its entirety. One of the reasons they do this is to dispose of an ageing property that is getting difficult to maintain, like the case of the Pearl Bank Apartments (now One Pearl Bank).
Another is to monetise a private property before its lease ends, during which the government takes back the development and its land without compensating the owners.
1. Banding Together for En Bloc Sale
Thereafter, a group of like-minded property owners can form a ‘pro tempore’ committee to stimulate interest in the proposed collective sale.
The members of a pro tempore committee need not be elected. It’s set up to persuade other owners to approve the collective sale. Its other objective is to determine whether the required level of consent to launch the property for en bloc sale successfully can be met.
2. Establishing the Collective Sale Committee for the En Bloc Process
Owners can go on to form the Collective Sale Committee (CSC). The CSC is an entity empowered by the owners to officially undertake the en bloc sale and represent them to the Strata Titles Board. To create the CSC, a General Meeting must be held, with at least 20% of a project’s share value or 25% of the total number of unit owners voting in favour.
Unlike the pro tempore committee, CSC members need to be voted upon, and the candidates for such positions need to make full disclosure of any actual or potential conflicts of interest. Those who previously failed an en bloc sales process will require 50% share value and 50% strata size.
3. Appointing a Legal Adviser and Marketing Agent for the En Bloc Process
If a CSC is successfully formed, among its main tasks is to engage a real estate consultancy to help market the entire development, as well as hire an independent valuer to ascertain the entire project’s market price. Among the well-known property consultancies are JLL, CBRE, Propnex, ERA Realty, Huttons Asia, Knight Frank, OrangeTee & Tie and Colliers International.
Another responsibility of the CSC is to appoint a law firm which will provide legal advice regarding the en bloc sale and handle all essential documents for the transaction. Local companies providing such service include Tan Lee & Partners; Dentons Rodyk & Davidson; along with Consultant, Rajah & Tann Singapore.
With the help of these experts, the committee can draft the Collective Sales Agreement (CSA), which includes the Method of Apportionment or the provision specifying how the proceeds from the sale will be divided among the unit owners. If you inked the CSA, you have consented to the en bloc sale and the splitting of profits.
At this point, the collective sale schedule should also be published to unit owners. Marketing the development and netting the sales proceeds could take around one year, so you need to prepare to eventually move out from your home if the deal pushes through. If you need help, you can start browsing properties with the help of an agent.
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4. Signing the Collective Sale Agreement and Obtaining Approval for the En Bloc Process
Under the Land Titles (Strata) Act, a collective sale can only proceed if a certain percentage of owners signed the Collective Sales Agreement.
In particular, at least 80% of the subsidiary proprietors by strata area and share value need to give their blessing for developments age 10 years and above. However, newer projects need to secure at least 90% approval. If all unit owners unanimously consented, there’s no need to get an order of sale from the Strata Titles Boards or High Court.
Important: the age of development is based on when it obtained its Temporary Occupation Permit (TOP). If this is not applicable, it will depend on the issuance of the Certificate of Statutory Completion (CSC). Moreover, the number of votes is based on strata area and share value, so those with larger and more expensive units have greater voting power.
Typically, those who oppose a collective sale are owners who have acquired their units during the last three years. This is because private properties bought since 11 March 2017 cannot be sold within three years. Otherwise, the owner must pay the Seller’s Stamp Duty (SSD).
Another group that is likely to reject the proposed bloc sale is those that have forked out huge amounts of cash to spruce up their properties but have not yet recovered the renovation cost through rentals.
5. Marketing Agent Launches En Bloc Tender
If you frequently read local news websites like the Straits Times, you’ll notice that real estate consultancies announce the opening of an en bloc tender. Part of their job is to carry out the tender exercise on behalf of unit owners, and this process usually takes more than a month.
If there is already a willing buyer that offers an acceptable price to the owners, the subsidiary proprietors can skip this part. Otherwise, dream big that several major developers or at least one comes knocking at your development’s doorstep and quotes an attractive price.
Getting a dizzying bid depends on Singapore’s private housing market. And even if there is a successful bid, there is a chance that the buyer can call off the deal later.
Pre-marketing updates on the collective sale process will be held. Throughout the launch of the En bloc tender, updates on offers and consideration of the Sale and Purchase Agreement will be made.
Once the tender closes, the bids will be evaluated. If the offer is lower than the reserve price, negotiations can be done via private deals. If all goes well, a winning bidder is announced.
6. Obtaining a Sale Order from the Strata Titles Board
If not all property owners inked the Collective Sales Agreement, the Collective Sale Committee is required by law to apply for a sale order from the Strata Titles Boards or High Court. To demonstrate fairness, the authorities need to hear the side of the unit owners opposing the en bloc sale during the proceedings.
Fundamentally, suppose the CSC has complied with all requirements for the collective sale. In that case, the Strata Titles Boards cannot disapprove the transaction unless it can be proven that any objectors will suffer “financial loss” once the en bloc process is completed.
There is a financial loss if the property is compulsorily sold at a lower price versus what the unit owner had paid for. For instance, a condo will be sold for $1.3 million, and the owner’s net proceeds will only amount to $1 million, even though it was originally acquired for $1.2 million.
7. Ending the En Bloc Process by Completion of Collective Sale
Once the Strata Titles Board grants the sale order for the transaction, the entire development will be turned over to the buyer based on an agreed schedule.
Typically, the buyer provides sufficient time for the previous owners to move out of the premises. However, if any of them have rented out their units, they need to cancel their leasing agreement and remunerate their occupants prematurely.
As for the payment, the sellers will receive it no later than the agreed time. It’s strongly recommended that before the launch of the en bloc tender, you should have made adequate preparations if the collective sale is successful. Buyers are unlikely to grant an extension for moving out to unit owners who have yet to secure replacement housing. Once the new owner gets vacant possession, the property will be torn down and redeveloped.
Furthermore, unless you have sufficient savings to buy another property before getting the proceeds, you need temporary accommodations. You may also turn to bridging loans, which must be repaid within six months.
Selling Your Property If the En Bloc Process Fails
Should your en bloc process fail to go through and you no longer wish to live in your current home, selling your property on the open market is an option.
The Singapore Property Market Outlook 2024 reveals private property prices are at an all-time high and have demonstrated price resilience, despite declining transaction volumes. There’s a good chance you will still be able to profit from your property, especially if you bought your home a long time ago. Not sure where to start? Read our guides on selling your property for more information.
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