Botanic Gardens View

Here they go again at the BGV estate. I have been keeping a close eye on the goings on there for quite a while - a few owners keep demanding transparency and consideration, yet the SC and the property agent (surprise, surprise as to who they are, do they have their fingers in ALL the pies?) seemingly bulldoze ahead regardless.

Restarting En bloc - by NOT being fair to owners

It looks like the SC are seeking ratification for their CSA through the mail - and giving owners very short notice to respond. As I have heard time and time again - if an owner does not object or make his opinions known then he is supposed to have acquiesced to the proposal/decision.

The SC and property agent are being very bullish and high handed in their dealings here. They are also ignoring the directive given by the then DPM Prof S Jayakumar in the Second Reading Speech on Land Titles (Strata)(Amendment) Bill on 20 Sep 2007; in which he said

"12. The sale committee shall convene general meetings to consider key issues such as the appointment of any lawyer, property consultant or marketing agent, the apportionment of sales proceeds, the terms and conditions of the CSA; and the terms and conditions of the S&P agreement. These changes will ensure that the owners will have the opportunity to discuss key issues before consenting to them."

Seeing as the last EOGM was 14 months ago; the proper thing to do would be to hold another EOGM to discuss further with the owners the important matter of the terms and conditions set out in the CSA and the method of apportionment of sales proceeds. A decent SC would do the decent thing - a group of gangsters will try to push it through as fast as they can, sailing very close to the minimum requirements of the LTSA.

Note:

The SC are in power indefinitely as their tenure is only fixed to one year from first date of signing the CSA, which hasn't begun yet. Any future SC in Tampines Court should have their pre-CSA tenure fixed to 6 months, otherwise the estate is left hanging in the wind. Owners must demand this.

From the THIRD SCHEDULE

7.-(1) The collective sale committee shall convene one or more general meetings of the management corporation in accordance with the Second Schedule for the following purposes:-

Before CSA signing begins 7-(2)

a) to consider the appointment of Enbloc lawyer and Property Agent (no 2)

b) to consider the apportionment of sale proceeds (no 3)

c) to consider the terms and conditions of the CSA (n0 4).

Laguna Park Tender Fails

Laguna Park could go at 20% discount to initial tender

Home owners at the Laguna Park condominium in Marine Parade are now faced with the choice of selling their homes at an average of 20 per cent lower than their initial asking price.

This comes after a failed tender earlier this month.

Then, the site received a bid from an Indonesian-owned, locally incorporated company of S$1.728 billion, but a downpayment could not be made in time.

Since then, the collective sale committee has circulated a letter informing owners of a new potential selling price of S$967 million.

Under en bloc sale regulations, 80 per cent of owners need to vote in favour of this price tag before the sale can proceed.

When Laguna Park opened for tender in September, most owners stood to gain around S$2.1 million to S$2.3 million each. Penthouse owners would have gotten between S$3.5 million and S$4.1 million each.

But at the new price being considered now, owners will get almost 20 per cent less or about S$1.8 million.

Some analysts said this price might be too low to be attractive to sellers. But they said sellers need to take into consideration some of the less positive aspects of the property.

Nicholas Mak, property consultant, said: “They must be aware that this is an ageing development and the lease of 99 years has been run down significantly.”

He added that sellers who are planning to buy similar properties that also have a view of the sea will probably have to pay as much as SS$2 million.

And he expects most owners to have to have to downgrade from their older, but more spacious units, to smaller new homes.

Charges to top up the lease to a 99-year term and to increase the site’s plot ratio comes up to about S$440 million.

Earlier, buyers would have been looking at paying around S$850 per square foot per plot ratio – a price many analysts considered expensive.

At the new prices, the cost comes down to S$700 per square foot per plot ratio for the 528-unit leasehold Marine Parade project.

Property consultancy Colliers said S$967 million is a more realistic selling price, and could lead to some developers re-considering the tender.

However, many analysts also noted that the total price is still very hefty for any one local developer in today’s market.

Laguna Park has a land area of 677,463 square feet, which means about 1,500 apartments can be built on the site.

According to the development’s marketing agent Credo, the sales committee has until around mid-November to strike a deal with a buyer, before the collective sale agreement expires on December 19.
Channel NewsAsia: 26 Oct 2009

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$1.2b Laguna park en bloc sale bid fails

OWNERS of East Coast condominium Laguna Park have failed in their bid to sell the property en bloc for $1.2 billion through a tender process.

Industry analysts say the result was not surprising, considering the high asking price.

However, in a curious twist of events, one company had submitted a bid for $1.728 billion – only to withdraw the offer on Thursday night.

The estate’s marketing agent, Credo Real Estate, said yesterday in a statement that it had received two submissions at the close of the tender on Oct 13.

One of them was from a locally incorporated firm which offered the eye-popping $1.728 billion bid. The other expression of interest was from a ‘local and prominent developer’, which was believed to have made an offer below the reserve price.

Credo declined to name both firms, citing confidentiality agreements.

But it is understood that principal shareholders of the first firm which had offered above the reserve price are based in Indonesia, said Credo.

The firm was due to submit the tender deposit on instructions specified by the owners, but the firm’s lawyers wrote in on Thursday night to withdraw the offer. They said the firm faced ‘difficulty in their bankers processing the funds and remitting them to Singapore’, said Credo.

Owners of the 528-unit development at Marine Parade yesterday said they had not heard any news officially from the sales committee, although a meeting for owners has been slated for tomorrow.

One owner, who declined to be named, said she was neutral as to whether the sale went through or not. ‘Whether it sells or not, it doesn’t really matter,’ she said.

Chesterton Suntec International’ s research and consultancy director Colin Tan said the condo’s failure to find a buyer ‘simply confirms that developers are not going to pay unrealistic prices’.

‘Developers are signalling to sellers that if you’re not realistic, we won’t be interested in putting in bids.

‘They are mindful of the ability of home buyers to pay even higher prices. This is not sustainable so they’re not willing to bear higher risks,’ said Mr Tan.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak noted that en bloc deals have not seen much success this year.

Dragon Mansion in Spottiswoode Park, as well as Changi Garden Condominium at Jalan Mariam, have been tendered with no deals done.

‘Owners are still expecting pre-crisis price levels which developers are now not prepared to pay. Either the owners wait even longer, or prepare to accept a lower price,’ said Mr Mak.

This might prove difficult. As another Laguna Park resident put it: ‘I don’t think anybody will sell at a lower price.’

Credo said it is still in negotiations with the local developer on a possible deal. Owners have until mid-December, when the collective sales agreement expires, to sell the estate via private treaty.

The former HUDC estate has a large land area of about 677,493 sq ft and a gross plot ratio of 2.8.

The sprawling 30-year-old condominium has been in the headlines over a spate of vandalism attacks on the property of residents who were not keen on the sale.
Straits Times: 17 Oct 2009

Tender for Laguna Park en bloc closes unsuccessfully

The tender for the Laguna Park en bloc sale has closed unsuccessfully.

Credo Real Estate said there were two bids for the 528-unit development at Marina Parade at the close of the tender on Tuesday.

A local company whose shareholders are based in Indonesia had offered a price of S$1.7 billion, well above the owners’ Reserve Price of S$1.2 billion.

But Credo said by Thursday evening, the firm decided to withdraw its offer, citing difficulties in their bankers’ ability to process the funds and remit them to Singapore.

The second bid was from a prominent local developer who expressed interest to pursue negotiations with the majority owners.

MediaCorp understands the local developer will settle on a bid price after negotiations with the owners.

Credo said the majority owners have about a month to enter into any private treaty deal before the collective sale agreement expires in December.

Executive director of property consultancy DTZ, Ong Choon Fah, said she is not too surprised by the announcement.

“With the government land sales and the confirmed list restarting next year, and we still have land parcels in the reserved list, there will be an alternative source of land for the developers,” Ong said.

“For example, recently the site at Serangoon Ave 3 which saw 15 developers bidding for it… at prices that had surpassed market expectations,” she added.

ChannelNewsAsia: 16 Oct 2009

'The second bid was from a prominent local developer who expressed interest to pursue negotiations with the majority owners.'

This doesn't sound unsuccessful to me.

Local developers like their closed door sessions to strong-arm weak committees with unreasonable deadlines. I hope their sale committee knows how to play hardball and ALL owners are kept in the loop as to what is happening.

Dragon Mansion

Roxy-pacific to buy Dragon mansion in en-bloc deal
Business Times:-21 Oct 2009
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Dragon mansion en bloc sale sees lower offer
Straits Times:-21 Oct 2009

Face-Off over lowering of Sale Price after failed tender

Laguna Park owners mull lower sale price
Business Times: 19 Oct 2009

These were some of the numbers discussed at a meeting of about 200 Laguna Park residents yesterday afternoon, called to consider the results of the failed tender and discuss possible options.

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Laguna Park owners consider selling at lower price
Channel NewsAsia: 19 Oct 2009
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Will Laguna park owners settle for less?
Today: 19 Oct 2009
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One woman who declined to be named told MediaCorp: "It was obvious there were two camps at the meeting. One camp was a group of people who were pretty desperate to sell, and another camp felt we should just wait as we're sitting on a very nice property here, and it should not go for less than what we've decided on."

One male resident felt the sale committee was trying to "get people worked up since there are only six to eight weeks left, to lower their price, get 80 per cent, then go for a closed tender. To me that's totally wrong. I don't want a closed tender, especially at this amount".

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The desperadoes v's the cool-headers. That so few owners turned up at the meeting is quite surprising, seeing as their very homes are at stake. This either means they are nonchalant as to the outcome or that they have already made up their minds one way or the other.

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Will the property agent/sale committee trot out the usual scare tactics over the next few weeks?

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Will the mystery developer decide to play hardball and put down a take-it-or-leave it type offer; confident that the owners will cave in eventually, as they always do?

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Will some money grease a few palms in order to ease the signing along? Remember Regent Garden whereby the developer paid an extra sum to the dissenters to secure the 100% with the withdrawal of their objections from the STB and the High Court deemed that to be kosher. But that was after the 80% had been reached.

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There was one case whereby the last 3 signatories to the 80% were paid sums differing from the rest of the majority, and that sale was thrown out by the STB on grounds of bad faith.

The estate? Finland Gardens

The property agents? Same boy-os

Will they try this trick again?

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Can the majority sign a supplemental CSA extending the life of the original CSA and tenure of sale committee by another 6 months - (though not necessarily reducing the reserve price)? Would this be a circumvention of the rules?

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Honestly, I rule nothing out anymore.

They have until the 19th December to find consensus on lowering the reserve price. Failing which the CSA expires and the whole shebang falls apart.

Property Agents

Seller can try mystery caller test to check on their property agent
Straits Times: 14 Oct 2009

Meanwhile, we would offer her suggestion of a ‘mystery caller test’ to sellers who have appointed estate agents to represent them in their HDB resale transactions. Sellers can administer this test to ferret out instances when their appointed agents refuse to e

ntertain offers presented by prospective buyers who do not intend to use the latter’s services.
CEO of Singapore Accredited Estate Agencies.
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Move to ban 'one agent for buyer and seller' under study
Straits Times: 13 Oct 2009
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Commissions and property agents
Straits Times: 13 Oct 2009
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People should just advertise on their own and find a buyer without any agent involvement. How difficult can it be! Agents will always have a vested interest in seeing the property sold quickly and not necessarily at the highest price. That way, you will know all the bids and not wonder whether your agent is holding back on a higher offer that doesn't come with an extra 1% commission. Either that or put in a few bogus offers and see what he does.

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A sterner deal for property agents now
Business Times: 13 Oct 2009

Mandatory accreditation for all real estate agents could be introduced soon
Straits Times: 12 Oct 2009
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The proposals include setting up an independent body to ensure compulsory accreditation for all property agents, introducing a demerit point system to penalise errant agents and agencies and having a public central registry which lists agents’ qualifications, employment history and track record.

Mr Lim added: “Licensing seems to be more serious, something which the individual agents would be more careful of because now they carry an individual license and if they don’t meet the service standards or if they don’t perform or if they do something wrong, then their license may be suspended and they may not be allowed to practice.”

Property agents to be regulated
Straits Times – 5 Oct 2009

'The Straits Times understands that an independent body will be set up and chaired by a neutral party appointed by the Government. It will also house a dispute resolution centre to mediate between agents and consumers.'

'There are also suggestions that agents will have to buy indemnity insurance protecting customers for losses resulting from negligent or unethical conduct.'
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Perhaps this a new avenue Owners can utilize if errant property agents harass or peddle mis-information during en bloc. I thought property agencies already had this kind of professional insurance, but obviously not. Proving negligence or unethical conduct is difficult but if you have everything documented or transcribed; it becomes a lot easier.

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See my other post 'Indemnity' in which I spoke about indemnifying yourself against the sales committee and any liability or legal obligations they might create in their eagerness to close the deal. You could extrapolate that to include property agents and en bloc lawyers for damages resulting from their negligent or unethical conduct.

It seems perverse that owners willingly indemnify these 'professionals' and fellow neighbours without thought to their own position. It is only when they are left high and dry do they realise the depth of their folly.

A Sellers Cautionary Tale

This is what we all know - more proof of en bloc proceeds being only enough for a unit HALF the size or DOUBLE the price in the same area! Unlocking the value of your home ... for the benefit of the DEVELOPERS!

A Seller's Cautionary Tale

I AM compelled to share my experience as a cautionary tale after reading the report, ‘Private homes still seeing high demand’ (Sept 22). I was a flat owner of Gillman Heights, which was sold in a collective property sale exercise and for which I received $887,000 (around $520 per sq ft) for my 1,700 sqft three-bedroom unit.

By the time I received my money, I could only afford a similar unit far from the city and certainly not as central as Gillman Heights.

Former owners like me were assured we would receive priority in buying units in the new condominium – The Interlace – on the site of our former home.

But at $1,000 psf, I would have been effectively downgraded to a much smaller apartment at the same location. Worse, we were given only three days’ advance notice of the exclusive preview for us to choose our units at the Shenton Way office of the developer, CapitaLand Residential.

The preview, like the units offered to us, was unfavourable. We were not given brochures and all we had to gauge the new condo visually was an amateurish miniature model which was a stark contrast to the sleek, three-dimensional and professionally crafted model displayed at the sales office at the public launch.

The preview seemed like a half-hearted attempt by the developer to meet its obligations under the sales pact.

Was the professional Interlace model completed and ready for viewing at the off-site sales office, and if yes, why was the ‘private preview’ not held at CapitaLand’s temporary River Valley Road sales office instead?

Why were the preview for ex-owners and the public launch of The Interlace so starkly different? Former owners were not offered a discount and while it may seem like a public relations coup to announce that ex-owners of Gillman Heights would receive priority in selection of apartments in the new project, the ones we were offered were some of the most unfavourable.

So, if there is a moral to my experience for flat owners contemplating collective sale, I would say potential seller beware: Read the fine print over matters like priority purchase of the new condo.

Reginald Tan

Straits Times - 02-Oct 2009