Share Value: The Common Mistake To Be Avoided

The common mistakes on self-estimation of share value iwhen you sell the residential property. 

Do not assume, ask the official sales or developer of what is the approved share value. Read below if you want to know more. original link

Many of us includes the experience buyers, sellers, developer and realtors knew that "Maintenance fee" of strata title property determined by its "share value" and share value computed by the sizes of the property. That is partly true" but in some cases it might be totally wrong. 

When you make mistake in buying, selling it might make you huge loses. Usually, developer or Architect will do a computation following this guideline and submit to authority for approval. Authority will double-check If the computation is correct, it will give approval to be used for that building.

Please look at the full explanatory notes from Building Construction Authority of Singapore or BCA.  >>click here

In summary, maintenance fee has 4 types of computation. Please see page 3  >>click here

1. Single Use Residential Developments

The share value for single use as residential property is quite straightforward. It determined by size of strata units 

calc sv
residential development share value

2. Single Use Non-residential Developments

For single use non-residential development comprising wholly of shops or offices or factories, etc, the share value shall be allotted on floor area. Please see page 4  >>click here

3. Mixed-use Developments

This type of development comprises different user groups e.g. residential, shop, office, etc. Allotment of share value is to be made based on floor area of the strata units and the use of weight factors for each type of strata units. The computation of weight factors for each user group is based on the share of the maintenance costs proportionate to the expected use or benefit each user group will derive from or the risk it will contribute to the common property. If there is income to be derived from the common property e.g. carpark fees, they could be considered in a similar manner like for expenses. Any of the following factors may be considered in determining the weight factors: 

  • a)  Total area 
  • b)  Common area 
  • c)  Strata area 
  • d)  Frequency of usage 
  • e)  Human traffic 
  • f) Risk factor

The reasons behide is because of each type of property has different needs in common facilities. Those need more or use more on facilities shall pay higher than the other one. Please see page 5  >>click here

4. 2-tier MC (Management Corporation) Strata Developments.

For example: Residential with Retails Development on the lower part of development which has 2 difference MC. A 2-tier MC scheme comprises a top tier MC to manage the common property used by all subsidiary proprietors in the development (e.g. driveway, car parks, etc), and a lower tier of sub-MCs to manage of their respective limited common property. For example, in a mixed- use development, the residential sub-MC can manage the swimming pool meant for their use only and the commercial sub-MC can manage the central air-conditioning for the shops. 

The common areas and services/facilities, which are to be enjoyed and used by all the subsidiary proprietors will be considered as common property. The same method as provided in paragraph 5.2 should be used to work out the weight factors in a 2-tier MC scheme.

Principle of computation are similar to Mixed-use developments. It based on needs, usages and weight of use(how frequent) of each facilities for each type of properties i.e. residential, shop, office. They are grouping by different MC. Fr example: Office Shop might not have access to pool and gym, at the same time residential users might not need cargo lift and unloading platform. Each MC will have different computation on share value and they are allocated to different MC to be in-charged. Please see page 15  >>click here 

Source: Building Construction Authority of Singapore (BCA)

©2015 All Right Reserved by Paul Poon