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April 23, 2008

Flaw in en-bloc mediation process

IN A collective property sale, minority objectors create uncertainty, resulting in hardship for the 80 per cent majority owners, as follows:

They cannot commit to a new home and property prices may rise against them;

They may commit to a new home but are unable to get the sales proceeds to pay for the new property;

They lose interest on the sales proceeds (which may be a substantial amount) while the minority holds out; and

They are unable to rent at market rates because of the long sale process.

To add insult to injury, under the mediation process, minority objectors are legally allowed to negotiate with buyers for higher compensation, which can run into millions of dollars.

When successful, such payments to minority objectors are kept 'strictly confidential'.

As the law should be equal for all Singaporeans, the authorities should remove this legal loophole by abolishing the mediation process. Objectors should object on the grounds of whether the sale process is fair, transparent and handled in good faith. There must be transparency in the legal system.

Ong Boot Lian (Mdm)

'I think 99 per cent, as she suggested, is too high. Perhaps 90 per cent is more reasonable.'
MR WILLIAM TAY, responding to Ms Susan Prior's suggestion to increase the percentage required before a collective property sale can be approved. The current rate is 80 per cent