EOGMs- Do's and Don'ts

YOU, yes you, little subsidiary proprietor man - you DO have the power to take on the sale committee and their entourage at the EOGM and direct the proceedings in a way that you feel is correct. Yes, YOU CAN MAKE A DIFFERENCE.

EOGMs are NOT all in their ballpark. Remember an EOGM is not held by the Sale Committee, enbloc lawyer or property agent - it is convened by the MCST (the Management Committee of your estate). Ever wonder why the pro- enblocers take over the MCST as a pre-requisite to enbloc? Because it is neseccary to their agenda. But all is not lost. They have to follow the BUILDING MAINTENANCE AND STRATA MANAGEMENT ACT 2004 (BMSM Act 2004) (see side table ->). Read the First Schedule in particular with regard to the holding of general meetings.

1)You want your questions to be answered but are not sure if you will get a chance to be heard? Then TABLE YOUR QUESTIONS BEFOREHAND.

What this means is that you write in to the Secretary of the MCST by email and by hand, (no harm in cc-ing it to the REGISTRAR of the STB, too). Include all the questions you wish to be addressed. It is vital that you do this before the Notice of the EOGM has been sent out to the residents - so send them in early so as not to give the MC an excuse to deny your request.

2) You want your questions and answers to be reflected in the minutes of the meeting?

When you stand up at the meeting, give your name and unit number and say "I want my question and answer to be reflected in the minutes of this meeting, please." they will have to comply.

3) You want to add a resolution to be voted on?

Then write in to the Secretary of the MCST with your request before the Notice has been sent out. He has to comply. CC it to the Registrar of the STB, too.

4) You want the minutes to be accurate?

Then TAPE THE EOGM YOURSELF. Buy one of those small tape recorders and edit the official minutes yourself. They may come in handy a year later - at the Strata Titles Board.

In fact- whenever you have a meeting/dialogue session/ house visit from any member of the enbloc team - be sure to have your handy-dandy tape recorder at the ready.

Remember, don't just think it -DO IT!

Post-EOGM

The EOGM was a rowdy, explosive 4 hour long affair. It’s hard to know what came out of it. Tempers flared with both sides shouting at each other. Lawyers, Property Agent and Sale Committee on one side, the angry owners on the other. It was interesting to note that the Sale Committee was flanked by the 2 lawyers, with the Chairman in the back row, mostly out of sight.

The Sale Committee refused to answer questions directly, deferring always to the enbloc lawyer and property agent.

Two Sale Committee members were ineligible to vote (had there been one).

The Property Agent admitted that at no time did he advise the Sale Committee to raise the reserve price.

His reason for not getting a formal reserve price was that it would cost $20,000 and therefore too expensive!
A quick calculation will tell you that $35/-unit is peanuts and owners would have been very willing to pay that amount if it meant getting an up-to-date and accurate assessment of the true value of their homes + common property. Indeed, they might have agreed to a new Valuation being done every 2 months for that price!!

The Lawyers/ Property Agent/ Sale Committee Chairman refused to reveal what the majority percentage was at the time of sale. Why?

The lawyer seemed to claim that the beta sum mentioned in the Sale Committee minutes many moons ago was altogether different from the beta sum that materialized with the purchase price, even though they both served the same function.

One majority owner expressed her disappointment at having put her trust and faith in the SC. It turned out her trust was misplaced and her faith blind.

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The Chairman of the MCST wanted to close the meeting even though there were many tabled questions left unanswered. A quick thinking subsidiary proprietor (SP) pre-empted his action by seeking and obtaining permission from the school official to extend the meeting by 1 hour. This was announced by the SP and so the meeting continued for another hour, by which time most of the important questions had been covered though not necessarily answered satisfactorily.

Even after the EOGM, it seems that what all of them have done collectively is to have contracted for the sale of this sstate with the barest of majorities and in the shortest possible time at the lowest possible price to a buyer who met the informal and never revisited or reviewed 15 month old prospective reserve price after marketing and tendering only one time.

TOP / CSC

According to the Land Titles (Strata) Act

84A – 1
(a): (a) the subsidiary proprietors of the lots with not less than 90% of the share values where less than 10 years have passed since the date of the issue of the latest Temporary Occupation Permit on completion of any building comprised in the strata title plan or, if no Temporary Occupation Permit was issued, the date of the issue of the latest Certificate of Statutory Completion for any building comprised in the strata title plan, whichever is the later;

Tampines Court was privatized on 01 April 2002. Being an ex-HUDC estate, it does not have a TOP certificate. What it does have is a Certificate of Statutory Completion CSC (Full) issued on 14 May 2003.

Technically, therefore, we are only 4 years old and should require 90% majority signatures before proceeding with the enbloc sale.

But will the Strata Titles Board follow the LTSA rules and regulations? Current rules do not allow the STB to rule as invalid that which is valid. Their hands are tied until the new amendments kick in.

But then again, HUDCs have always fallen through the cracks; we have always been a ‘special’ case. When buying our units off the open market, before privatisation, we were forced to take a Bank loan like a private property yet were bound to all the housing ownership rules set by the HDB. All private properties are CPF first charge if bought before 1996. All properties, that is, except HUDC's; which are inexplicably set before 1991.

Rules are rules. Laws are laws. Will the rule of law prevail?

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10 September

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Gilman Heights will be challanging the TOP/CSC at the STB on 23th, 24th Sept and 3rd,4th,5th Oct.

Minton Rise (another HUDC) will follow hot on it's heals on Oct 8th.

Far East, Frasers Centrepoint buy Waterfront View

Far East, Frasers Centrepoint buy Waterfront View

July 20, 2007

In a move seen as reducing the risks of undertaking a massive development, Far East Organization and Frasers Centrepoint have set up their maiden joint venture, which has bagged Waterfront View, a privatised former HUDC estate facing Bedok Reservoir, for $385 million.

The price for the private treaty deal sealed late Tuesday night before the planned tender close for the property this Friday works out to a land price of $241 psf per plot ratio inclusive of an estimated $102.2 million payment to the state for lifting title restriction to enhance the site’s plot ratio, and upgrading the site’s lease from a remaining 78 years to 99 years.

The 809,037 sq ft site can be developed into a new condominium with a whopping gross floor area of over two million sq ft – enough for a massive project with about 1,600 units.

This is the biggest residential collective sale to date in terms of number of units involved (there are 583 units in the existing development), land area as well as dollar quantum, says DTZ Debenham Tie Leung, which brokered the sale.

Far East’s and Frasers Centrepoint’s breakeven cost could be about $450 psf, say analysts. Currently, 99-year condos in the area are going for above $500 psf for units that face the reservoir and below $500 psf for those that don’t.

Depending on how Far East and Frasers Centrepoint come up with their design scheme, about 80 per cent of units in the new development may face the reservoir.

Industry watchers reckon that instead of competing with each other for Waterfront View at the tender, Far East and Frasers Centrepoint figured it made more sense to team up.

This reduces their risks in terms of exposure to such a huge development – and eliminating at least one competitor in the process. The duo are said to have made their offer, good for only a day, late Tuesday afternoon, accompanied by a $19.25 million cheque (for a 5 per cent deposit).

The collective sale agreement signed by Waterfront View’s owners give the sales committee the mandate to negotiate a private treaty deal as long as the reserve price is met. This is understood to have been $370 million.

‘The sales committee could either take the offer on the table, good for only a day – or take the risk of waiting and hoping for a higher offer at the tender that may or may not come,’ said a source.
Waterfront View’s sales committee chairman Matthew Yu said: ‘We are very happy. It’s a good price. The outcome came earlier and is better than we expected.’

DTZ’s director for investment advisory services Tang Wei Leng said: ‘Given the size of the development, there were really only a few parties who have demonstrated genuine interest. The sales committee was decisive, having considered all the options carefully. We are very happy for the owners.’

The $385 million price is above an independent valuation for the property which DTZ did not disclose. Owners controlling 82.33 per cent of share values in Waterfront View have agreed to the collective sale, which will be subject to approval from the Strata Titles Board. Owners of the existing 583 apartments and maisonettes have equal share values, which means they will each receive about $660,377 per unit, which is over 60 per cent more than what the units would fetch if sold individually today.

The site is zoned for residential use with a 2.5 plot ratio.
While the deal involves the maiden tie-up between Far East and Frasers Centrepoint, it is not the first time that the men helming the two organisations have joined hands. Far East is headed by property magnate Ng Teng Fong while Frasers Centrepoint is the property arm of listed Fraser & Neave group, which is now headed by Han Cheng Fong who, during his days as group CEO of the former DBS Land, oversaw many tie-ups with Mr Ng’s Singapore unit Far East and Hong Kong arm Sino Land.

Market watchers are wondering if the two sides will team up for other acquisitions, including the second Somerset site being offered by the state. Far East clinched the first Somerset plot, the former Glutton’s Square site, in January.

Waterfront View is the fifth site Far East has bought here this year. The five total $1.2 billion.
Source : Business Times – 25 May 2006

Waterfront View up for en bloc sale

Waterfront View up for en bloc sale

July 19, 2007
 PRIVATISED HUDC development, Waterfront View in Bedok, is up for collective en bloc sale for an estimated $380 million. If it finds a buyer, it will be the second such development after Far East Organization bought Amberville in Katong for $183 million in January.

Although the amount for the 809,037 sq ft Waterfront View site is high, the price based on the plot ratio of 2.5 is $240 per square foot per plot ratio (psfpr), lower than the $396 psfpr paid for Amberville.

A differential premium of about $102.2 million based on the new plot ratio of 2.5 and upgrading of the lease on the 20-year-old development back to 99 years will be paid by the future developer. At the asking price of $380 million, existing owners could get around $650,000 for their units, or about a 40 per cent premium over current market prices.

Tang Wei Leng, director of Investment Advisory Services at DTZ Debenham Tie Leung, which is also brokering the deal, says that 1,400 condominium units with an average unit size of 1,300 sq ft can be built.

She also estimates that the breakeven cost is about $450 psf. Last week, a 99-year leasehold condo site near Tanah Merah MRT Station was sold to NTUC Choice Homes/Wing Tai for $210 million or $318.50 psfpr.

The breakeven cost was estimated at between $520-530 psf.

Also for sale is a good class bungalow (GCB) site on Astrid Hill for about $13.5 million or about $500 psf. The 26,510 sq ft site cannot be subdivided into smaller plots as GCBs must be a minimum of about 15,000 sq ft.

Consequently, Steven Ming, director and head of Prestige Homes, which is brokering the deal, says such a large site for one house is quite ‘rare’. He also says that there are only 20 GCB plots on Astrid Hill.

There is an old two-storey house on the site but Mr Ming expects the future owner to tear it down. He adds that recent GCB transactions in the nearby Belmont Road area have also gone for about $500 psf. This is less than the asking price of around $600 in neighbourhoods like Jervois Hill.
Source : Business Times – 18 Apr 2006

Enbloc owners' Dilemma

If you're thinking of taking out a term loan to purchase a property now whilst waiting for your enbloc money to be deposited into your account 6 - 9 -12 months down the line - well, think again. The Banks are saying NO to this one.

Please read the following article here

STB appeal process

What to expect if you are an appealing minority owner.
It shall be a learning process and I will amend accordingly as we go along.

• Newspaper advertisement in the Classifieds section under Notices. This Notice will list the names and addresses of all the majority and minority owners (old rules, the new rules have dropped this requirement) it will give the % of majority attained and where to view certain enbloc documents.
• Appealling minority owners have 21 days from the Notice in the newwspapers to put in their appeal to the STB. If you have engaged a lawyer, he will do this for you obviously. if you are appealing on your own, then go to the STB website http://www.mnd.gov.sg/stb/and download FORM 4 (objection filed under S84A/D/E by an individual.
• 7 days: time taken for STB to send a letter to minority owner.
• 2 weeks: time taken to set date for STB mediation

Mediation: 2 days maximum which may not be consecutive.

All appealing minority owners will be summoned on the same day to appear before the STB panel. All minority owners, their lawyers, the enbloc lawyer, the representatives of the sale committee and the 5 STB mediators will begin a process of negotiation. How they go about this depends very much on the personalities of the STB members. There is no set way.

The mediation is closed to the public and is without prejudice.

If no settlement is reached between the appealing minority and the sale committee then either party can request to proceed to the next stage - the STB Hearing

The STB Hearing is the expensive part. You really should get a lawyer for this as it is a real court proceeding and any layman proceeding alone would be at a severe disadvantage. A typical hearing, I believe, lasts around 5 days (which may not be consecutive) and can run into thousands of dollars in lawyer fees, expert witness fees etc. If the appeal is deemed 'frivolous' by the STB, then the appealing minority could be saddled with the whole bill. If it is not frivolous the STB would probably award costs to all SPs; majority and minority including the appealing minority. The costs will be deducted from the sale price. I have attended one of these hearings, I suggest you do, too, if you intend to take it that far.

The hearing is open to the public.

Strata Titles Board

45 Maxwell Road,

#01-11The URA Centre East Wing

Singapore 069118

Tel : 6325 1585/6

Fax: 6325 1607

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Questions

For the sake of clarity and openness, the sale committee will need to address the concerns and questions of the residents of Tampines Court at the upcoming EOGM on 21 July. I have compiled a list which I hope the sale committee will be forthcoming enough to answer clearly at the upcoming EOGM. The list of questions following may not be exhaustive but they are pertinent, and many are as yet unanswered.

1. When was the first formal valuation done?

2. How do you justify the reserve price of $389,719,233.00?

3. Do you have a fresh top-up valuation to the Valuation Report that is the basis of $389,719,233.00? If so why has it not been disclosed? If not then why not?

4. Why didn’t the sale committee get a valuation report in the face of escalating property prices between expression of interest in 2005 and the conditional sale on March 25th 2007? Please explain.

5. Why was the Sale Committee not aware that the Market was rising? Did not the property agent advise the sales committee?

6. Why was no mass meeting held with the subsidiary proprietors after the 80% had been reached and before the property was sold? Would it not have been expedient?

7. How was the committee acting in the best interest of the owners by NOT seeking a higher reserve price or providing for a Top Up Valuation?

9. You had a year to market the property from January 2007, explain why you rushed to sell in March 2007 just when it was obvious that the Market was rising in leaps and bounds?

10. Can minority owners appeal to the STB under section 84A (7) (a) to obtain the Alpha sum?

11. Can minority owners, who will incur a cash outlay to cover their costs and expenses of the enbloc sale and/or the outstanding privatization costs appeal to the STB under section 84A (7) (b) to have those costs covered?

12. Will the CPF agree to allow 5% of sale price not to return to the Member’s Account as it will be withheld from the gross sale price until the unit is vacated?

13. If the STB does not approve of the sale, how will the sale committee pay the professional fees of the enbloc solicitor and the property agent?

14. Was the tender exercise open to scrutiny by the owners?

15. Wasn’t this a ‘lack of transparency’ on the part of the sale committee?

16. Why wasn’t a new open tender called?

17. How do you know you got the highest purchase price when there was no new open tender and no one to bid against the purchaser (2)?

18. Why were the names of the Party A and Party B in the tender exercise and the amount tendered kept secret?

19. Explain why owners were not informed of the tender offers as is the norm in other en bloc sales?

20. If Purchaser (1) organization put in a written offer for $390 million + $10 million for the whole site, why did the sale committee enter into a conditional sale with Purchaser (2) , which is not Purchaser (1).

21. Was the possibility of a Beta sum ever mentioned and recorded in the Minutes in any of your meetings with subsidiary proprietors prior to the sale?

22. Was the Beta sum ever discussed at any of the sale committee meetings prior to the sale? Which set of Minutes?

23. Why wasn’t the Beta sum in the CSA along with the Alpha sum?

24. Why didn’t the sale committee commence collection of the Beta sum after the 40% signatures had been reached, as stated in the minutes of the 4th Sale Committee meeting held 10th April 2006 at the MCST office?

25. By not mentioning the Beta sum directly in the CSA, but adding a catch-all clause that sanctioned the sale committee to do anything they wanted (except lower the reserve price), were the signers unwittingly signing for the Beta sum as well?

EOGM to 'consider the sale'

The EOGM is confirmed for 21 July 2007 and the Notices have been sent out to all owners. The requisition forms will be inspected for irregularities by minority owners on Friday.

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Added as an addendum to the official notice are the questions* tabled by minority owners.

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*The questions are in error and the MCST and SC Chairman have been sent a copy of the amended questions to be included at the EOGM. A copy of these amended questions has been sent to all homes and they will also be handed out to the SP's at the EOGM.

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Having questions tabled at the meeting is a 2 edged sword. It gives the Sale Committee time to think of a suitable response but it also guarantees that the questions will be asked as it is uncertain how much time will be given over to Q & A.
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This is the first and ONLY minuted and recorded meeting of the entire en bloc process and it is imperative that minority owners raise their objections at this meeting.

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Owners should stand up, say their names and

ask that their questions and answers

BE REFLECTED IN THE MINUTES.

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EOGM's come in all shapes and sizes. A recent EOGM at an ex-HUDC estate lasted all of 10 minutes (or so I was told). Since questions have been tabled by minority owners at our EOGm, the SC cannot make a run for it so fast.

ALL MINORITY OWNERS ARE ENCOURAGED TO ATTEND

The Valuation

The valuation issue is perhaps the most contentious issue in the whole en bloc process of Tampines Court

The facts as subsidiary proprietors know them:

The reserve price was not based on a formal valuation.
This was revealed at an un-minuted dialogue session in April 2007. But a figure like $389,719,233.00 could not have been plucked from the air, so who did the initial, estimated valuation?

At the EOGM held in July 2007: their rationalisation was that the STB regulations only stipulate a valuation not more than 3 months old at the time of application to the Board. Owner's expectations and normal practice do not seem to figure at all in their decision making.

The reserve price was not revised upwards in the 15 months prior to the sale.
Where was the option to revise the price upwards in the escalating property market? Other en bloc estates were keeping pace with the bullish market, why not ours? The Property agent obviously treated the RP as a maximum price, rather than the minimum it should have been.

Let’s look at how the reserve price was adjusted in another ex-HUDC estate Farrer Court:

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Farrer Court (ex-HUDC):
DECEMBER 2006 ----------$700 MILLION
JANUARY 2007 -------------$840 MILLION
MARCH 2007 ---------------$1.2 BILLION ---------SOLD!
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TAMPINES COURT (ex-HUDC)
DECEMBER 2005-----------$389,719,233
JANUARY 2007 ------------$389,719,233
MARCH 2007 --------------$389,719,233 ------SOLD for $395 million!
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Note: it is not the actual figure that is important, but the fact the the RP was ADJUSTED UPWARDS reflecting market conditions at the time
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Media Corps Press, Today online.com
"Jones Lang La Salles national director of investments Lim Song Hai said " For the first quarter of 2007, we've seen a rise in reserve prices in the region of about 30% on average"."
Channel News Asia