FINLAND GARDENS WIN

Finland Gardens Minority
Win their Case at the STB!
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This is such encouraging news!

Finland gardens: En bloc sale dismissed Weekend - 1 Dec 2007

STB rejects Finland Gardens’ collective sale 

Lawyer says rare decision is based on sale price and less than 80% approval

THE Strata Titles Board (STB) threw out the collective sale application of Finland Gardens in Siglap after it failed to meet statutory requirements.

The rare decision to axe a bid for a sale en bloc followed five days of hearings that took place in July and early September.

The STB delivered its decision on Wednesday in an oral announcement but has yet to disclose the grounds for rejection. It may do so at a later date.

Mr Denis Tan, the lawyer for the owners objecting to the sale, heard the oral announcement. He said: ‘The board dismissed the application on the grounds that it found there was no 80 per cent majority and that the sale price was not obtained in good faith.’

The Finland Gardens sale required approval from at least 80 per cent of the owners.

Mainboard-listed company Sing Holdings bought the freehold 48-unit site in November last year for $49.5 million. The owners of each unit would stand to reap about $1 million to $1.27 million, depending on the size of the unit.

The owners of eight units objected to the sale; their grounds included not getting the best possible price for the estate.

In addition, they argued that a higher offer had come in after Sing Holdings’ offer, but the sale committee, instead of asking Sing Holdings to come up with a better price, had simply asked the company to match the later offer.

Clinic manager Valerie Chia, 46, said she and owners of the other seven units had objected to the sale from the start, more than a year ago.

The managing director of Sing Holdings, Mr Lee Sze Hao, said he would be asking the majority owners to file an appeal against the STB decision.

An industry observer said the ruling is significant because there is a general perception that collective sales are usually approved.

‘If you look at collective sale rules, their purpose is to facilitate such sales,’ he said.

Finland Gardens, located in the Siglap area at East Coast Avenue and East Coast Terrace, has a land area of 98,309 sq ft.

It comprises 48 units of walk-up apartments housed in two three-storey blocks.

Sing Holdings partnered Forum Asian Realty Income II to buy the estate. The United States-based fund holds a 30 per cent share of the joint venture.

In late October this year, the STB threw out the collective sale application for Airview Towers at St Thomas Walk.

Developer Bukit Sembawang, which had agreed to pay $202.17 million to buy the site in April, said recently that the application had been dismissed on a technicality. The sellers are planning to file an appeal, it added.

 Straits Times- 1 Dec 2007

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About Finland Gardens:

48 unit freehold development off Siglap Road

Land area: 98,309 sqft

Property Agent: Credo Real Estate

Sold: November 2006

Buyer: Sing Holding Ltd for $49.5 Million

The Wait

It has been 8 months since the conditional sale of Tampines Court - and still no application for the sale to the Strata Titles Board has been made by the invisible and silent sale committee. This surely must be the longest delay between sale and application ever in enbloc history. Tampines Court might break a few more records before its over; largest number of appealing minority owners being another.

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The cost of a replacement unit on the open market continues to sky-rocket with the latest 30 yr old 5-room HDB in Marine Parade going for $750k (paid for in cash, no less). Being forced to sell a 1700 sqft private apartment to buy a much smaller HDB is hard to swallow. For new units: "Selling prices of the finished units [ in Bishan and Toa Payoh] could hit $600 per sqft or even more, which means HDB prices may reach the levels of private 99-year leasehold condos" Savills. Of course, even if we wanted to avail ourselves of these ridiculous prices, privatised ex-HUDC-ers like ourselves cannot buy directly from the HDB for another 30 months.
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Enbloc has made a mockery of home-ownership and turned a generation's aspirations and achievements to dust. Suddenly, that decision not to emigrate 20 years ago looks like a lost opportunity. One wonders what social / financial / housing policies will be hatched in the future, should we be encouraging our children to leave these shores with their shifting sands to find a real home on real soil? Let the 2.5 million people yet to come (from where, they never said) take on the mantle of false hopes and pipe dreams.

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Enbloc is the very antithesis of 'heartland' building. All those years put into improving and promoting good neighbourliness through neighbourhood committee activities, block parties, MP walk-abouts and the like are all laid to waste. Singaporeans are being reduced to mere tenants in their 'own' home. It is a well known fact that tenants do not contribute or participate to the same degree as those who want to put down roots in an area. With the root system clipped; who will bother?

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Picking up on a point made in Comments by poeima; why do we even bother with 99 yr leases when there is no intention of allowing people to hold onto properties for that length of time? Why not just dispense with the charade of property ownership altogether and rent out properties on a 10 year lease instead of the bogus 99? But of course developers could only build paper houses for that price; so hence the lure and false bait of home-ownership.

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An MP gave me this statistic "most Singaporeans move house every 5 years". How true is this? Is this really indicative of a genuine cross-section of society or were only those affected during the last economic downturn taken into account. It cannot be a healthy societal norm to relocate every 5 years - those with children know the impracticability of this - are we becoming a nation of rootless nomads? Houses, houses everywhere, and not a home to call my own? Perhaps those newly married couples, who bought new units in 'ulu-ulu' land and were eagerly waiting for their 5 year compulsory residence period to be up before selling off and moving closer to civilization (eg Tampines!), skewed the statistics. Has it become an impossible dream to live in the same spot for 30 years or more? Not everyone seeks financial riches, aspires a change of scenery every few years or possesses a 'must have or die, die' mentality; some of us are quite content with our achievements to date and wish to partake no more in the relentless and ultimately pointless treadmill of upgrading (or forced downgrading), home improvement and maximising potential. After over 20 years of such exhortations - 'enough already'!

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Ultimately, where does it get you anyway? The property market has become a game of snakes and ladders. You start at square 1 with a subsidised HDB (as most of us do), move up the squares to a larger home (by working hard and saving diligently) to accommodate a growing family, then you are hit by an enbloc. Well, enbloc can either be a ladder to greater riches or a snake to take you down. Mind you, you didn't land on this reptilian square by your own volition or bad luck; that I could accept. Instead, it is forced upon you by your majority neighbours and how far down you slide depends on your own particular length of snake But sell and buy back into HDB on the open market at 4 times the original price you must, effectively putting you all the way back, or close to square 1. You could lose 20 years on a snake.

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Of course, it is pointed out to us that we must sacrifice our homes for the common good.

I say, so be it........... but if the "80% want to jump over a cliff and the other 20% have no choice but to follow" then in all fairness to the 20% ; remuneration should at least be commensurate with replacement cost.

Replacement cost is of course not provided for in the LTSA - its only determining test is whether there be financial loss (Eng Lok Mansion STB decision, 2006). Yet, it is clearly not enough to consider only the buy price when reality for the regular guy, who owns only ONE home and LIVES in it, is that a roof lost must be replaced by another roof. It should be a roof if not on the same square, then at least on the same line!

Raw Deal

Waterfront condos coming up at Bedok Reservoir Information about upcoming launch can be found here

FOUR condominiums will be built where the former Waterfront View estate in Bedok Reservoir Road used to be. The first will be launched in the first quarter of next year, It will be called Waterfront Waves and have 405 units, of which more than half will be three- and four-bedroom apartments. More than 60 per cent of the units will also have reservoir views, the developers added. Prices may start from $700 psf.
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Well, few from the original Waterfront HUDC will be able to buy these units from their enbloc sale price, few from Tampines Court either. The units to be built on our land will be similarly priced out of reach to minority 'mass market-ers' such as ourselves who are now middle-aged or retired and are unceremoniously thrown out into a red hot property market against our will and better judgement.

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What kind of people agree to sell at $255 psf ppr knowing that the replacement cost for owners in the new condominium would be $700 - $850 psf; a price completely unaffordable to many who had hoped to stay in the area. Would the majority owners have agreed to this raw deal had they been informed beforehand? I think not. And is that one of the reasons why the sale committee didn't dare canvass views and seek consensus before selling the property?

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Another enbloc article in the paper today:-

Enbloc Millionaires To Drive Market

but such fairytales are not for us Tampines Courters, perhaps they should counterbalance that rosy article with one reflecting the grim reality of ex-HUDC's like Waterfront View, Gillman Heights, Minton Rise and Tampines Court entitled 'No-Win Enblocers Forced Back into HDB'.

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PHOENIX COURT

Sorry, there was some confusion earlier - there were not one but two different cases brought before the High Court concerning Phoenix Court. The first involved 12 majority owners against the Sale Committee (06 Nov) and the second the lone minority couple trying to block the sale (09 Nov).

1) The decision of Justice Lai Siu Chiu on 06 Nov
In short,

• the court came down hard on the 12 majority owners (the plaintiffs) who tried to scuttle the sale. He pointed to the clause in their CSA that stated :-

In attempting to set aside the CSA and the Supplemental Agreement, the plaintiffs had also breached the covenants and undertakings in cl 7 of the CSA. The relevant sub-clause states:
Every Owner agrees as follows:
(p) not to do anything whether by an act or omission that may prevent or otherwise be detrimental to the Collective Sale or the fulfillment of any of the purpose under this [CSA] or the [SPA].

• the S&P supersedes the CSA (as we all knew already, but here is the case that puts the seal on that argument).
• and finally:

It was because of the frivolity of the plaintiffs’ claim that I ordered indemnity costs against them in favour of all nine defendants.
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2) The decision of Justice Andrew Ang on 09 Nov

The minority couple lost the case.

A landmark decision and one which lays down the law regarding the consequences of non-compliance with a statutory requirement.

"The elusive historical approach of characterising procedural provisions as either directory or mandatory is largely anachronistic today. The preferred approach in modern times in determining the validity of an Act is to understand the purpose of the relevant procedural rule as well as the scope and intent of the governing statute. This approach does not entail ignoring the usage of words such as “shall” or “must” in legislation. It suggests that any prima facie inference raised by such words may be dislodged after taking into consideration the scope and objectives of the legislation and the consequences arising from alternative constructions.'

'To conclude, the modern approach in Singapore as well as in England, Australia and Canada is to treat the question as one of statutory construction to be answered by looking at the whole scheme and purpose of the Act and by weighing the importance of the particular requirement in the context of that purpose and asking whether the legislature would have intended the consequences of a strict construction, having regard to the prejudice to private rights and the claims of the public interest (if any).'

'This is not to say, however, that apart from the express grounds, there cannot be any other circumstance in which a Board may decline (or even be precluded from) ordering a sale.'

'At the end of the day, each objection must be examined on its own facts and the particular requirement breached set against the overall purpose of the legislation. One should then consider whether a strict construction and the invalidation of the Board’s order is what Parliament would have intended, taking into account any prejudice to the rights of parties and the public interest (if any).'

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Just as a matter of interest, I found another case on lawnet dealing with 'procedural' matters and how another judge views their importance. In a High Court decision on 06 Nov 2007 (Lee Hsien Loong v SDP and Others), Justice Andrew Phang Boon Leong wrote:

36 Enough has been said to illustrate a broader – albeit related – point. The rules of procedure – such as the one presently considered – are intended to ensure that one of the two twin pillars of justice is achieved, viz, procedural justice. The other pillar is that of substantive justice. As was observed in the High Court decision of United Overseas Bank Ltd v Ng Huat Foundations Pte Ltd [2005] 2 SLR 425 at [4]–[9]:

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'It is axiomatic that every party ought to have its day in court. This is the very embodiment of procedural justice. The appellation “procedural” is important. Procedural justice is just one aspect of the holistic ideal and concept of justice itself. In the final analysis, the achievement of a substantively just result or decision is the desideratum. It is more than that, however. It is not merely an ideal. It must be a practical outcome – at least as far as the court can aid in its attainment.

However, the court must be extremely wary of falling into the flawed approach to the effect that “the ends justify the means”. This ought never to be the case. The obsession with achieving a substantively fair and just outcome does not justify the utilisation of any and every means to achieve that objective. There must be fairness in the procedure or manner in which the final outcome is achieved.

Indeed, if the procedure is unjust, that will itself taint the outcome.

On the other hand, a just and fair procedure does not, in and of itself, ensure a just outcome. In other words, procedural fairness is a necessary but not sufficient condition for a fair and just result.

The quest for justice, therefore, entails a continuous need to balance the procedural with the substantive. More than that, it is a continuous attempt to ensure that both are integrated, as far as that is humanly possible. Both interact with each other. One cannot survive without the other. There must, therefore, be – as far as is possible – a fair and just procedure that leads to a fair and just result. This is not merely abstract theorising. It is the very basis of what the courts do – and ought to do. When in doubt, the courts would do well to keep these bedrock principles in mind. This is especially significant because, in many ways, this is how, I believe, laypersons perceive the administration of justice to be. The legitimacy of the law in their eyes must never be compromised. On the contrary, it should, as far as is possible, be enhanced.'

Statutory Notices

28 June 2006 - 697 owners - 372 units - 66.42%
23 Aug 2006 - 778 owners - 416 units - 74.28%
17 Oct 2006 - 800 owners - 428 units - 76.42%
11 Dec 2006 - 813 owners - 435 units - 77.67%
04 Feb 2007 - 837 owners - 448 units - 80%
31 Mar 2007 - 844 owners - 452 units - 80.71%
25 May 2007 - 853 owners - 457 units - 81.60%
19 July 2007 - 853 owners - 457 units - 81.60%
12 Sep 2007 - 859 owners - 460 units - 82.14%
06 Nov 2007 - 859 owners - 460 units - 82.14%
31 Dec 2007 - 859 owners - 460 units - 82.14%

No-No

It has come to my attention that a flyer has been sent to some minority owners (not those appealing, of course, as their lawyers would be up in arms) requesting the STB payment of $781.25.

Minority owners - (and note: those who half-signed are considered minority) - need not pay a single cent until the STB approves the sale and the costs and expenses of the sale are then deducted from the sale price ON COMPLETION OF THE SALE, after bank and CPF charges have been settled.

The SC should NOT be asking the minority to cough up at this point.

(To date, I believe 179 majority owners have not paid up, and are refusing to do so.)

If anyone has a copy of this flyer , please let me know, so I can post it on this blog.