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We are one of 9 owners in a strata townhousese complex.
There are a number of developments around us already had construction works began.
Recently, after those works strated, we had real estates agents approched us proposing selling the complex as a whole.
After some discussion, all 9 owners are willing to sell, but at what price and what’s the share for each owner:
– The price would only be known if the complex is put onto the market.
– The share would only be ascertained if all owners agree on the split-method.
And that’s the problem – “how to spilt the proceed, if the complex is to be sold as one”.
The most logically one is to use the Unit Entitlement as the split-method – as the Unit Entitlment should be a reflection of the value and size of each unit comparing with other.
If all units had the same or similar value and size, then using Unit Entitlement would seem to be fair and fine.
However, the 2 largest units have 36% of the area but only 24% of the Unit Entitlement.
So, using the Unit Entitlement, on paper, would seem to, unfairly, benefit the other 7 with smaller areas.
Since there is no agreement of the split-method, so the group of 7 owners (G7 – with smaller areas) decided to go to the market on their own – excluding the other 2 who have the larger unit area.
Interesting questions then arised:
Considered the future strata law (if it passes and in its current proposed form), only 75% of owners are needed to dissolve the strata scheme.
And that, once acquired these 7 properties, the developer (or buyer) would have:
– 78% of the votes (based on one-unit-one-vote)
– 76% of the votes (based on Unit Entitlement)
1. Would they (G7 owners) find developers (or buyers) NOW willing to buy just 7 out of 9 properties – for FUTURE development?
2. If these 75%-owners become 75%-developer (once propreties acquired by the developer), would the develper be allowed to force the 25%-owners to sell – in the same way as the 75%-owners?
3. If the G7 owners sold at a developement premium, would the ‘market prices’ then be the prices-with-the-developement-premium or just the market-going-prices at the current market? (with the new proposed law, the 25% owners could be forced to sell their properties at the ‘market prices’ plus moving costs)
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