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Legal fee

When the enbloc phenomenon first started in the mid 80s, both the real estate agency and the law firm in a proposed collective sale would charge no fee until the deal goes through, when the fee written into the contract would be taken from the payment from the buyer. The legal process has since become more complex, partly because of increased chance of litigation, and partly because of changes of laws governing collective sales.The chance of a proposed deal not getting sufficient support among condo owners or failing for other reasons is higher than before.

While the real estate firms are usually willing to take a chance on possibly doing a lot of work for nothing, the legal firms incur certain expenses in carrying out searches and getting contract signing witnessed by a registered lawyer, and would like to charge a upfront payment from owners at the time of contract signing. The amount is usually a couple of hundred S$; this might seem a small sum, but its psychological impact is considerable - if the deal falls through, the payment is for nothing. By deterring owners in this way, the chance of failure is increased, thus deterring more owners from signing.

Further complicating matter is the 5-day cooling off period during which an owner can rescind his/her consent - so one could say at the time of initial signing he/she has not made a final commitment to take part, and therefore also not incurred a due payment of the upfront legal fee.

I dont think there is a "solution" to this issue, but the following "arrangement" would seem to be psychologically more satisfactory and could make it less likely that such a small matter would become the deal breaker:

1. at the time of signing, the unit owner is handed a bill due in 5 days, assuming the consent is not withdrawn.

2. a reminder after 5 days, thanking the owner for not withdrawing consent.(I would guess 50% chance of getting paymant)

3. another reminder when 80% approval (or some other number as the case may be) is reached, or if the deal is aborted, describing the work done and expense incurred - I guess the majority would pay up.

The worst possible attitude would be one of up front entitlement. Even an attitude of "it would be easier if you pay up front" raises the question "easier for whom?" and "give me a good reason to make it easier for you"