The CSA and S&P

Since ‘all’s quiet on the western front’ at the moment, it’s as good a time as any to go back and reflect on the Collective Sales Agreement (CSA) and the Sales and Purchase Agreement (S&P). It could serve as a warning for others reading this blog who are perhaps undergoing an enbloc sale of their own in their estate.

There’s very little to say about it except that my copy (the draft copy given to all owners) of the CSA has 30 pages of clauses defining the obligations of the signatories, the Sale Terms, the Sale Committee etc. All very detailed, covering every eventuality and written in opaque legalese.

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(The following is my layman's reading of the said documents and as such may contain errors, If you find any faults or question the analysis then PLEASE LEAVE A COMMENT! I will amend accordingly)

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CSA:

Sale Terms -

4.1.5 COMPLETION OF THE VALID CONTRACT OF SALE SHALL BE SCHEDULED NOT EARLIER THAN 3 MONTHS AND NOT LATER THAN 6 MONTHS FROM THE DATE OF THE VALID CONTRACT OF SALE

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So according to the CSA the expiry date should have been 25th September 2007.

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BUT

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4.3.1
“THE SALE COMMITTEE SHALL, IN CONSULTATION WITH THE SOLICITORS AND/OR THE PROPERTY CONSULTANTS (but, importantly, not the owners!) HAVE THE ABSOLUTE DISCRETION TO NEGOTIATE AND AGREE WITH ANY PROSPECTIVE PURCHASER OR TENDERER ON THE DETAILED SALE TERMS OF THE COLLECTIVE SALE, AND TO ACCEPT ANY QUALIFICATIONS, ADDITIONS, MODIFICATIONS, OR AMENDMENTS PROPOSED BY ANY PROSPECTIVE PURCHASER OR TENDERER TO THE SALE TERMS OF THE COLLECTIVE SALE, INCLUDING. BUT NOT LIMITED TO, THE SALE TERMS STIPULATED IN 4.1 (in short, change anything and everything in the CSA pertaining to the Sale Terms, which they subsequently did) HEREIN, SAVE AND EXCEPT CLAUSE 4.1.4 (this refers to lowering the reserve price; the one thing they cannot do by LTSA regulations)…”

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And

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12.5
"ALL INSTRUCTIONS GIVEN BY THE SALE COMMITTEE TO THE SOLICITORS AND/OR PROPERTY CONSULTANTS OR OTHER THIRD PARTIES IN ACCORDANCE WITH THIS AGREEMENT SHALL BE DEEMED INSTRUCTIONS GIVEN TO THE SAID PARTIES BY ALL THE SIGNATORIES (thus covering themselves so that they don't have to go back to consult with the owners before selling the property lock, stock and barrel)."
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These two clauses together give the SC absolute power.

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So what did the now all-powerful Sale Committee do ?

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Well, they went forward and 'agreed and negotiated with the proposed purchaser' and made the following 'amendment' in the S&P
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S&P
6 - ...THE SALE AND PURCHASE HEREIN IS SUBJECT TO AN STB ORDER BEING OBTAINED WITHIN 12 MONTHS FROM THE RPA APPROVAL DATE....

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Calculating the RPA approval date is a little tricky and if I am wrong PLEASE CORRECT ME!

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Order of official approval: OPP >>>LTU>>>RPA

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OPP: (Outline planning permission) - granted on 3 May 2007 (see pg 4 of S&P)

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Lease Top Up Approval Date: as of now unknown but up to 10 weeks + 2 wks extension from OPP = July 26 (actually this is also open-ended as they can 'mutually agree' to extend even this etc). (see page 5 of S&P)

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RPA (Residential Property Act): approval to be obtained within 6 weeks from the LTU = 6 Sept 2007 . But, this is tentative as it all depends on the LTU date which is, as already mentioned, unknown. (see pg 7 and 16 of S&P)

So, using the time frame above they have , approximately 18 months from March 25, 2007 (date of sale) to September 2008 to get the sale approved at the STB (and even then they can extend the deadline if they mutually agree to do so).

Owners signed for 6 months in the CSA.
The Sale Committee, without owner consultation,   TRIPLED the length of time the consenting owners thought they had agreed to when they signed the CSA.

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UPDATE (25 Oct 2007)

Letter from Sale Committee dated 23 October 2007:-

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OPP date - 03 May2007

LTU date - 22 June 2007

RPA date - 10 July 2007

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So, I believe this means the expiry of the S&P is 09 July 2008 (12 months from the RPA in principle date of approval). But of course, these things are always extended in perpetuity or so it seems ...........

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UPDATE (Mediation 2008)

Qualifying Certificate expires on 25 July 2008

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The in-principle date of approval and the Qualifying Certificate are one in the same Please check the Residential Property Act at the side 31 (2).

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QC for each unit: $400

So, I suppose

560 units = $2,240,000

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