Collective Sale and EnBloc Sale are terms which are normally used interchangeably. A collective sale refers to the sale of two property units or more. The sale is normally aimed at a common purchaser. Often times, this type of sale is normally placed in newspapers and involves a renowned full-development. However, this does not mean that there are no smaller versions of collective sales. The latest enbloc would be Ki Residences located at Clementi by Hoi Hup Realty.
Enbloc Sale of Property
When a sale is described as an en bloc, it means that the owners have agreed to collectively sale the property. Note that each individual in this scenario will get a golden handshake. The complexity of this sale normally arises when some parties are not satisfied with the deal.
If you own a property, you have power over it. But did you know that in Singapore you don’t have the absolute power? Well, there are some instances where the government or a private developer may want your property. This is usually the case during the construction of major infrastructure. In the end, you will be forced to sell your home. This oft-cited method that involves several property takeovers what is known as collective en bloc sale.
Enbloc Means Collectively Sold Property
A common menace in large cities is land scarcity. So, sometimes old developments have to be destroyed. This is important for meeting the growing population and shifting the city’s landscape. The government of Singapore has laws regarding collective sales. For instance, if owners who have 80 percent or more of the share property value and also 80 percent of the total area of strata can agree, then the property can be sold. What this means is that votes aren’t assigned by the number of units but by share value. Note that the 80 percent rationale is great to ensure that more than half of the parties involved agree to it. Though the financial compensation in such instances is usually so high, it’s not easy to reach the recommended 80 percent target.
Profitable Outcome for Enbloc Owners
1. Where the owners notice a highly profitable opportunity and collectively agree to sale the whole en bloc as a group.
2. An interested buyer can approach the owners. This is not an easy process because the buyer has to get enough people to agree to the sale of the development.
3. A company may act as a middleman. It approaches a group of owners and then buys the property. After that, the company sells it to a 3rd party.
There have been many en bloc sales in Singapore. But the largest one which cost S1.339B occurred in 2007. It involved the collective sale of a total of 618 apartments! Generally, en bloc sales are profitable. In some instances, a person may end up receiving up to 200 percent of the total value of their property.