Jun 29, 2007

5% Conundrum

A sale is usually completed about three months after the STB order. 

On completion, the sale proceeds are deposited into the owners' accounts. The S&P should have a clause whereby the owners can stay in their apartments for up to 6 months before they have to vacate. This is the norm. The buyer will usually withhold 5% of the sale proceeds until vacant possession is given.

This is all well and good if, after the bank mortgage and CPF charge have been fully redeemed, there is sufficient cash left over to cover the 5%. Owners run into trouble when the remainder in cash is insufficient or zero* and they then have to scrabble to find extra cash to cover the 5%. Not an easy task if you are also house-hunting and need cash for the down payment / cash-over-valuation for your new home 

This letter was copied from the government's Reach Discussion Corner
Posted : 07/05/2007 4:42 PM (the thread closed July1)

“I am one of the co-owners of Waterfront View. I have just been informed by the lawyers today that CPF does not allow deductions for the various expenses related to the en-bloc sale of the property. We have already incurred CPF losses of close to $90,000.00. On top of that we now have to pay $19,000.00 in cash for the various legal, marketing expenses, compensation fund etc. Under the terms of the sale, $50,000.00 has to be withheld from the sale price until vacant possession is given. In our case, since there is a shortfall where the sale proceeds are fully utilised to pay the loan and CPF refund, we are told to pay the $50,000.00 in cash upon completion date if we cannot vacate the flat. We still have to incur significant cash losses, on top of our CPF losses. We were not aware that CPF will not allow deductions of the various expenses/required payments from the balance sale proceeds before the refund to CPF accounts. I am sure that there are other owners out there who suffer the same fate”

The solution here is to make sure your SC negotiate with the prospective buyer to waive the 5% if an owner suffers such a shortfall.

Of course, if owners find themselves in this situation to begin with then the sale price is definitely too low! No owner should ever walk away from an enforced sale of their homes in a collective sale with no cash to move forward.

Farrer Court Sold


Jun 28, 2007

Minority meeting

The en bloc solicitor will be holding a dialogue session this coming Saturday at the CC to ‘try and understand each parties’ concerns and views in the hope of arriving at an amicable resolution to the matter”.

Their invitation is extended not just to the 38 minority owners who have engaged legal represeantation at the upcoming STB appeal, but to all minority owners in the estate. It will be the first time that minority owners will meet apart from the majority group. In such a large estate as ours, it is easy to feel isolated and acting as a lone voice. Minority owners may wish to take the opportunity to see that they are not alone in this matter of opposing the collective sale of Tampines Court.

Update on meeting 01 July
Only 20 out of a possible 100 owners attended the meeting. The meeting itself was very quiet and owners did not share many of their ‘concerns and views’. I suspect they were there, like myself, just to observe and listen.
The sale committee may not have gotten anyone to sign their CSA, but the appealing minority added 2 new members to their group!

Farrer Court Tender


Jun 16, 2007

Don't want to move out, don't like the payout

IN APRIL this year, the Gan family made headlines in a big way. Unhappy with the collective sale of their Lincolnsvale condominium in the Newton area, they called up the press to complain that the transaction had gone through 'without their knowledge'.

And subsequently, they said they were the only family left in a building with no lights in the corridor and had demolition workers for new neighbours.

The rest of Singapore watched, some in amusement, as the Gans - who have two teenage sons - declared they were staying put in the 23-year-old development that Sim Lian Land had bought in late 2005 and was now ready to demolish.

Would the Gans have to be physically thrown out with their belongings, kicking and screaming? Would they stand in front of the wrecking ball, daring it to strike?

It never came to that as the Gans were ordered by the court to move out last month.

From refusing to move out to rejecting millions in sales proceeds, the anti-collective sale brigade is becoming increasingly vocal, and they are making sure they are heard in more ways than one.

Apart from challenging the keen sellers at residents' meetings, they also write to the media, the Government, their MPs and neighbours, and even post it on their blogs.

Property consultants have noticed that they are an increasingly knowledgeable bunch and getting more aggressive.

Some of these objectors take on the fight alone, others in a group. Some are open about their objections, some prefer to say no without giving away their identities.

On the whole, collective-sale dissenters tend to be older home owners who have worked for - and established - a comfortable lifestyle. Many are in the so-called upper middle class segment.

Beyond the practical issue of how much a replacement home will cost, these home owners are unhappy for a whole host of more intangible reasons.

Some talk about the loss of community when they are split up from neighbours they have known for years.

Others bemoan the loss of architectural heritage and environmental wastage when relatively young buildings are torn down and rebuilt.

These are the reasons why, somewhere in Ulu Pandan, a group that calls itself Save The Pine Grove is still hard at work even though a first attempt at a collective sale fell through earlier this year.

A new collective-sale initiative has since been launched and the activist group has already written to voice objections about the way it is done, lest it gets in the way of estate maintenance.

For their efforts, they have had one of their letters posted at one of the condominium's lift lobbies, and on it a vaguely threatening scrawl: 'A few ladies from the Save Pine Grove group - Please get out of Pine Grove.'

Another dissenter, 58-year old retiree Ms Brown (not her real name), puts the resistance down to 'attachments' that people have formed with each other and the area in which they live.

Ms Brown, who had bought her unit at The Claymore back in 1989 with the view of spending her retirement in Singapore, has written to the media to voice her unhappiness at the collective- sale bid at her estate.

'It's almost like the 'villages' of London where local communities have their own dry cleaners, restaurants, grocer and so on,' she said.

'Even though we are close to Orchard Road and its many shopping centres, we also patronise small local businesses nearby and have come to know the people who run and work in them. And they, us.'

Dr D, a 39-year-old academic who has lived half his life in Britain, agreed. His Singapore property was also recently sold en bloc.

'It'll mean re-establishing everything again. But my worry will be that in 10 years, we'll need to move again.'

In a twist of irony, some home owners have bonded as they work towards warding off a collective sale, further deepening the feeling of community in their estates.

Madam Lee Woei Shiuan has held a few collective-sale discussions at her Hong Leong Garden Condominium apartment in the West Coast area.

Attendance, she said, is generally good. She serves her guests tea, but some bring fruits, cookies and even bottled mineral water for all the attendees.

'We need to 'unite' the owners so that we can collectively resist the sale application at the Strata Titles Board when the time comes,' said the accountant.

The Hong Leong Garden sale is pending the convening of an extraordinary general meeting before the sale application can be made to the Strata Titles Board. It was sold in March for $131.5 million, a sum some home owners there - who are upset with the entire sale process - now think is too low in today's market.

Madam Lee then decided to talk to her MP about the issue and was surprised when six of her neighbours went along to lend her support.

In other estates, blogging has proved to be a secure yet possibly far-reaching option.

A group of residents at Botanic Gardens View recently created a blog to gather views from dissenters.

'Are you happy with the RP (reserve price)?' asked one of the postings on the blog.

'I urge you to think carefully before the agents do the song and dance and try to persuade you to sign the CSA...!'

But getting the strength in numbers to resist a collective sale is only the beginning.

The collective sale is a multi-step process with plenty of legal twists and turns along the way.

Dissenters may need expert help and lawyers do not come cheap. Over at Hong Leong Garden, unwilling sellers are pooling their own resources to pay for $60,000 in legal fees.

The initial fee for each unit comes out to $5,000, but should go down to $3,000 when more come on board.

'We should fight for our rights to keep the roof over our heads,' said Madam Lee.

But the potential cost of fobbing off a collective sale goes beyond simple dollars and cents.

Often, dissenters have to bear with threats and unpleasant surprises. There have been stories of cars being scratched and verbal abuse being hurled publicly at dissenters. This is why most dissenters prefer to speak only on condition of anonymity.

In the end, the dissenters say the sacrifice is worth it.

'You cannot find such designs like Habitat One anymore,' said home owner Vicky, referring to well-known architect Moshe Safdie's classic project in Ardmore Park that was sold en bloc last year.

'Cairnhill Heights is also unusual. It's painted in metallic silver and has a retro science fiction feel to it,' she said.

'We won't have an architectural heritage if we don't have such interesting buildings around.'
Asked another home owner: 'What signal is being sent to developers if buildings can be torn down after 10 years?'

'Developers know that they need not build a condominium to be sustainable over 30 years if most are going to be demolished in 10.'



They've lived for decades in the same home. It's where they've brought up their families or shared memories with deceased spouses. Money is not an issue - they simply refuse to move out. One widow was afraid her husband's spirit would not be able to find her if she moved; others say they had no idea their home was being sold. One thing they have in common: really annoyed neighbours who want a quick sale.

Who's who on the homefront
Sell! Sell! say some. No! No! scream others. Hmmm, if the price is right... In every en bloc soap opera, weird and wonderful characters emerge. Here are seven.

1. The Stayers
They've lived for decades in the same home. It's where they've brought up their families or shared memories with deceased spouses. Money is not an issue - they simply refuse to move out. One widow was afraid her husband's spirit would not be able to find her if she moved; others say they had no idea their home was being sold. One thing they have in common: really annoyed neighbours who want a quick sale.

2. The Sharks
They sniff out estates with 'en bloc potential', hoping to make a quick killing. Passive investors tend to 'flip' a unit even before the sale, but more active ones may insinuate themselves onto the sales committees to push through a deal. They've been called troublemakers and agitators by those resisting a sale, but other residents welcome their experience in en bloc sales.

3. The Bochap Investors
They are landlords, not residents. They're bochap (couldn't care less) for good reason. When their unit goes en bloc, they're more than happy to cash out. If it doesn't, they can still collect rent. The real losers: their tenants, who have to find a new place to stay in a quickly rising market.

4. The Activists
They are articulate, passionate, and well-informed. They distribute fliers, write letters to their MPs, and read up on property laws. They are the en bloc rebels of today with only one cause: to stop a sale from going through.

5. The Fence Sitters
They are the ones who sit on the fence, not knowing which side to gun for. Some are not keen to sell but they don't want to hold up the sale either. Some just aren't sure if selling is a good idea while others want to be the last one to sign.


6. The Troublemakers
They are hoping to get more than the rest either because they think their units are superior or because their circumstances are more pathetic. Their actions vary from dragging their feet on the signing of the agreement to bringing their cases to the Strata Titles Board. But do not be fooled: they are definitely pro-sale.

7. The Happy Sellers
Some have toiled their whole life to buy that one apartment which will net them an en bloc sale. Some are investors. An en bloc sale would bring them more quick money than they could have dreamed of. Needless to say, they are the first to say yes.

Joyce Teo, Property Correspondent
Sat, Jun 16, 2007
The Straits Times