Compensation Thresholds for Collective Sales: Singapore & Australia Compared

Strata titles are a critically important Australian legal export. New South Wales’ (NSW) strata legislation has been particularly influential, having been adopted in numerous jurisdictions, including Singapore in 1967. As a statutory framework, strata law solves the problem of ‘floating freeholds’ by creating indefeasible ownership of individual units in a building, guides owners in managing the development, and sets out the dispute resolution process when disagreements occur. In an increasing number of jurisdictions (including Singapore and three states in Australia), strata legislation also enables the strata scheme to be terminated and sold for redevelopment where the requisite majority, as opposed to an unanimity of subsidiary proprietors’ consent to the sale. Strata law imposes compensation thresholds that must minimally be paid to dissenting owners. In Singapore, the rule is that no minority owner should suffer a ‘financial loss,’ while in NSW and Western Australia (WA), this amount is pegged to what the owner would theoretically have obtained had the unit been acquired compulsorily by the state. In this article, I compare strata law in Singapore, NSW, and WA in relation to compensation thresholds and explain why the Australian market value standard should also be adequate to compensate unit owners in Singapore.