The Singapore Institute of Surveyors and Valuers' (SISV) reply (Distribution of collective sales proceeds depends on structure of developments, July 11) sidesteps the point raised by Forum contributor Tan Wee Gee (Newer valuation method welcome for selling en bloc, June 26).
The institute said: "It is not a case for newer valuation methods... but what would be the methods of distribution that would give the fair and reasonable apportionment of the sales proceeds."
Mr Tan's point that SISV's recommended methods are "outdated and inappropriate" is not addressed.
SISV's Valuers' Guidelines on Collective Sales do not explain how the recommended methods give rise to fair and reasonable distribution of the sale proceeds, and have resulted in many disagreements.
The nature of a collective sale is very different from the selling of a unit in the open market.
Only by collectively selling all the units in the development are the owners able to get a higher price for their respective units, compared with selling their units individually in the open market.
The most logical, and hence most fair and reasonable, method of apportionment is the economic contribution of each unit towards the collective sale.
The value of a site to the developer depends on its location, permitted development type, and intensity, tenure, nearby amenities, and so on.
Development intensity is controlled by the plot ratio, which governs the maximum gross floor area of the future development.
In a collective sale, the difference in the contribution of each unit towards the value of the site is its respective gross floor area and type of use.
For example, in a purely residential development, the economic contribution of a luxuriously renovated unit on the highest floor with the best views - which translates into high sale value in the open market - to the collective sale is the same as that of another unit of the same size or design on a lower floor with all the negative factors.
As the development will be redeveloped, all the individual attributes of individual units are immaterial.
A developer does not take an existing small, high-floor unit to build a new small, high-floor unit, nor is it restricted to building only large units from the contribution of a large unit.
I urge the SISV to come up with better distribution methods and clearly explain their rationale, in order to reduce disagreements among unit owners.
Ho Chee Min