What Is Collective Sale Agreement

24 Feb What Is Collective Sale Agreement

If you’re looking to venture into property investment in Singapore, then you’ll want to know about collective sale agreements. This process is a way for multiple owners of a property to sell their units together, typically at a higher price than they would receive by selling individually. In this article, we`ll explore everything you need to know about collective sale agreements.

A collective sale agreement, also known as an en bloc sale, is a process in which a group of private property owners come together to sell their units in a single transaction. This is usually done with the help of a marketing agent and a lawyer who help the owners negotiate the sale. The goal is to sell the whole property as one package, rather than individual units.

The collective sale process usually begins with a petition from the owners, who decide to band together to sell their units in one transaction. Once the petition is submitted, the process of finding a buyer begins. An appointed sales committee will work with a real estate agent to market the property, advertise to potential buyers, and negotiate with them on the final sale price.

If the sale is successful, the proceeds from the transaction are split equally amongst all the participating owners; however, there are certain conditions that must be met before the sale can proceed. The collective sale agreement must pass through several stages of approval, including obtaining more than 80% of owner’s consent to sell, obtaining an order of sale from the Strata Titles Board and obtaining a court order.

It is important to note that while the collective sale process may seem simple, it can take a long time to complete. There are also many legal requirements that must be met, and the process can be very complex. In addition, not all properties are suitable for collective sale, and owners may face challenges such as resistance from other owners who do not want to sell, or difficulties in finding a buyer.

In conclusion, a collective sale agreement can be an effective way for private property owners in Singapore to sell their units together, potentially resulting in higher profits than selling individually. However, it is important to understand the legal requirements and potential challenges of the process before embarking on a collective sale agreement. With the right guidance and support, this process can be successful, but careful planning and preparation are crucial.