En-bloc sale — grievances behind ‘successful’ Singapore stories

• The National House Buyers Association (HBA) has time and again highlighted the ramifications and repercussions that will affect the house owners’ rights and interests, should the URA be enacted without 100% consent from all homeowners.

The proposal of the Urban Redevelopment Act (URA) has been reported to be going ahead despite a host of dissenting voices. 

Among the main concerns regarding this URA is the consent threshold rate for en-bloc sale, which the Minister of Housing and Local Government (KPKT) Nga Kor Ming is proposing to be lowered to 75%-80% from the current 100%. 

Nga has said that the lower consent threshold aligns with international standards such as those in Singapore, where unanimity is not required. 

Read: Nga sees 534 potential areas in Peninsular Malaysia for urban redevelopment
Read: Housing Ministry: Urban Redevelopment Act being drafted; 139 potential redevelopment sites in KL

The National House Buyers Association (HBA) has time and again highlighted the ramifications and repercussions that will affect the house owners’ rights and interests, should the URA be enacted without 100% consent from all homeowners.

Read: Potential en-bloc sale under proposed Urban Renewal Act unconstitutional
​Read: Urban Renewal Act: Is KPKT biting more than it can chew?
Read: Why need new urban redevelopment law when a list of existing laws are in place for the purpose?

Not all fine and dandy in Lion City

While our housing minister has often touted Singapore as the model of success in en-bloc sales, where only an 80% majority is required, not all are fine and dandy behind the scene. 

Cries of outrage against the long-enforced en-bloc strata law in our our neighbouring country are prevalent, and here we highlight some of those grievances gleaned from our online research:

1. The other side of the story

“Every news article reports a successful en-bloc sale in a similar way: How much is the project sold? What is the estimated amount each owner can pocket? Which developer pays the top price? What is the potential of the future project?, and so on.

The media is only covering part of the story of a successful sale. Have they interviewed the rest of the 20% of owners who voted ‘no’ to sell their homes? En-bloc sale is a battle between the two camps of ‘sell’ and ‘stay’ owners. You will be surprised how a quiet and peaceful housing estate suddenly turns upside down when the money talk begins. It is not a straightforward business deal. It is about money, greed, emotion, uncertainty and fear.

There will always be rumour mongers that feng shui of the place has (suddenly) become bad. This will be followed by stories of harmful radiation from a rooftop antenna, terminal illness of a few residents, a suicide case … The en-bloc sale fever will conveniently be escalated.”

2. Majority wants to sue minority

“Outsiders may think that there is celebration of joie de vivre for a successful en-bloc sale. You should scour the blogs on both sides of the debate to know the sentiments. The once-serene neighbourhood is now filled with tensions with both sides to the en-bloc sale accusing one another of extirpating each other’s dreams and hopes.

Some members of the majority (albeit having 84%) want to sue the minority for deliberately delaying the process for them to have a quick access to their windfall and capitalise on the ascending property market for a bigger gain. They ignore the legal rights of the minority to object, simply brushing aside their empathic and visceral positions without even allowing the minority the right to a proper hearing at the STB (Strata Titles Board). 

The ersatz presumption of simply stating upfront that the minority have no grounds whatsoever is denying the minority of a legal right and is surely an affront of any system. Have the majority forgotten that it is they who initiate the sale of not only their roofs but also the roofs of the minority by exploiting the legal 80% rule, to achieve their selfish greed and intemperance? Now they have the gall to sue the minority! The bestiality of the minds is manifested simply because millions ($$) is in the air.

The abnormally quick joining of the en-bloc sale orgy is indeed worrying. The intervention by the authorities of these situations can potentially split our nation.”

3. Unwilling to sell integrity

“I was secretly happy that the en-bloc sale didn’t get through. It has nothing to do with ‘sour grapes’. It is also not because I am so rich that I don’t need the proceeds. I don’t want this kind of windfall if our neighbours have to compromise their integrity and destroy the serenity of our place (we call home). Who wants to go back to their home after a long day to be surrounded by nothing but banners, posters and social media full of politics, attack and hatred?

Peace of mind is priceless. Only people who have gone through an en-bloc sale (like you and me) understand. In property investment, there are many ways to make the same or even larger amounts of money. Under all circumstances, it is not worth compromising your integrity to win the jackpot of an en-bloc sale. Put aside my conscience and graciousness for S$1.75 million? Never!”

4. Loads of stress and uncertainties

“Many residents who face a collective sale of their homes are going through a lot of stress, tensions, frustrations and disappointment in the whole process of en-bloc sale.

When the sale finally goes through, residents have to deal with the new uncertainties in the near future:

- Will they have sufficient time to find new homes, given the timeline to move out of the old estate?

- Can they afford a similar or better unit in the same location with the money from the en-bloc sale?

- Will they miss the familiar environment and friendly neighbours they have had for many years?”

Potential disharmony and distrust 

A caring government should not create laws that will potentially create disharmony amongst fellow owners in a strata community. The homeowners have, through the years, been able to take turns to serve on their voluntary bodies: be it the joint management committees or the management corporation. Why then drive a shaft through the communities and create mistrust amongst themselves for the sake of money and windfall? 

The spirit of the Strata Management Act 2013 was to create active participation and cooperation; neighbourliness of diverse individuals sharing common tasks within strata living settings. Instead of building community, the proposed URA laws, to meet its desired goals, will break up “families”, which are an integral part of the community. The collaboration, team spirit and communal friendships that they have cultivated through the years would be destroyed.

Successful redevelopments sans the URA

In 2013, Perbadanan Negeri Selangor (PKNS) was successful in its redevelopment of a block of dilapidated low-cost flats in Shah Alam, Selangor. The inhabitants were living in slumps of 300-sq ft units, and PKNS procured for a 100% mandate from the owners for a makeover. Their low-cost flats were eventually exchanged for a condominium with 900-sq ft units, complete with common facilities, and the owners returned to where they once lived. 

Another case is the 1 Razak Mansion in Sungei Besi, Kuala Lumpur, where the walk-up flats were torn down and replaced by a condominium with three-bedrooms units and a car bay included. The owners were immensely fortunate that they participated in the redevelopment. No one was “forced”.

Do not override rights to own property

HBA continues to oppose the entire idea on URA, as we are of the opinion that it is a mere facade to hide the true intention of overriding or eroding a host of other legislations currently in place to safeguard the fundamental rights to own property. The said legislations include the Land Acquisition Act, 1960; the National Land Code, 1965; the Federal Constitution, 1957 (rights to property); and the Strata Titles Act, 1985. 

HBA sees this as a coercive acquisition for profit, disregarding the rights of dissenting property owners. Any law enforcing a consent threshold would deprive homeowners of their properties unlawfully. We believe that the proposed URA by KPKT is regressive, potentially violating property ownership rights. 

Read: Urban Redevelopment Act forum: Don’t wage war between ‘sell’ and ‘stay’ homeowners

The association urges the Madani government to refrain from succumbing to developer influence and to uphold constitutional principles, safeguarding homeowners' rights across the country.

This article is written by National House Buyers Association (HBA) honorary secretary-general Datuk Chang Kim Loong. HBA is a voluntary non-government and not-for-profit organisation manned wholly by volunteers.

HBA can be contacted at: 
Email: [email protected]
Website: www.hba.org.my 
Tel: +6012 334 5676
The views expressed are the writer’s and do not necessarily reflect EdgeProp’s.

Looking to buy a home? Sign up for EdgeProp START and get exclusive rewards and vouchers for ANY home purchase in Malaysia (primary or subsale)!