Distribution of collective sales proceeds depends on structure of developments

We refer to the letter by Mr Tan Wee Gee (Newer valuation method welcome for selling en bloc, June 26).

Strata-titled developments are planned and designed in different forms, which give rise to different unit types and share values.

The appropriate methods of distributing the sales proceeds for these developments undergoing collective sales would also vary according to the unique structure of the developments.

While valuation may be one of the preferred methods used to determine a reasonable share of the sales proceeds, other methods of distribution may also be applicable.

It is not a case for newer valuation methods for distribution of the sales proceeds in collective sales, but what would be the methods of distribution that would give the fair and reasonable apportionment of the sales proceeds to the owners of the development selling en bloc.

For example, the method based purely on share value is appropriate when all units of the development have almost similar floor areas.

The Singapore Institute of Surveyors and Valuers' Guidelines on Collective Sales have thus recommended different methods of determining the collective sales proceeds, which can be adopted singly or in combinations, to suit the unique structure of the development.

The final test of the proposed methods is that the majority and minority owners must not be disadvantaged by the proposed methods of distribution, and the proposed methods must be fair and reasonable to all owners.

The final safeguard is that the court would need to be satisfied with the methods of distribution, among other things, before granting approval of the collective sale.

Teo Li Kim

Director (Projects)

Singapore Institute of Surveyors and Valuers

A version of this article appeared in the print edition of The Straits Times on July 11, 2019, with the headline 'Distribution of collective sales proceeds depends on structure of developments'. Print Edition | Subscribe