Horizon Towers minority going for blood

Horizon Towers saga roars back to life with new lawsuit

Business Times – 26 Jan 2010

'According to documents filed with the High Court, these minority owners are looking to reclaim close to $1 million in legal and administrative costs which they say they’ve incurred during the lengthy fight to keep their homes.'

'They have served writs on former sales committee chairman Arjun Samtani and member Tan Kah Gee, alleging that they were ‘key players in the process leading up to the commencement, facilitation, management and finalisation of the collective sale process’.

The minorities, in their claim, allege that Mr Samtani and Mr Tan had ‘pushed for a quick sale of the property for their personal benefit’, because both had bought additional units in Horizon Towers, at the start of the collective sale process, and were keen to profit from that.'

Mr Samtani is represented by N Sreenivasan from Straits Law Practice. There's no finer counsel out there, so this SC member is well represented.

If the minority win; it would have a warning effect on anyone contemplating joining/starting a sale committee to further their own agenda. If buying up second units at the start of an en bloc does not throw a cloud of suspicion on a member's true motives, then I don't know what does. It may have happened in the past, before the Court of Appeals recommendation of full disclosure of second units etc at AGMs, but that should not absolve them from having impure motivation. Integrity does not need legislation, it is simply expected and if these minority owners can show that the two SC members acted in their own best interests only, then they have a chance at winning. 

Horizon Towers defendant moves to strike out suit

Business Times – 27 Jan 2010

Collective sales revving up

En bloc sales will likely roar in Tiger year

The managing director of Credo (Mr. Singh I believe) trying to drum up business for himself again, dishing out the same old tired reasons for putting your home on the en bloc market in the false hope of striking it rich. The oracle of en bloc predicts it is time for a new feeding frenzy and estates should line themselves up at the trough.

Well, there are two ways of looking at the en bloc market - one from the buyers point of view and the other from the sellers.

Each typical property market cycle can be sub-divided into four – by dividing each of the upswings and downswings into two.
When the market begins to move up, in the first quarter of the property market cycle, land prices move up the fastest as developers tend to do most of their land acquisitions then. That is when the en bloc sales fever reaches its peak, as in the 1995/96, 1999/2000 and 2006/07 periods.

Yes, we remember the 2007/08 peak, how could we forget? Tampines Court was one of the very few lucky ones to be snatched from the en bloc jaws at the last moment (quite literally) but sadly saw its sister HUDC estates gobbled up and their owners spat out (I'm thinking of Gillman Heights in particular and the shabby treatment owners got from the developer afterward).
The buyer acquires land at the beginning of a cycle knowing that he can double/triple/quadruple his profit in the second/third quarter of the cycle. Owners will be told to rush in now and sell... or miss the wave.... And it is precisely in this period that owners in suitable projects should act decisively to seize their en bloc chance. So owners should act quickly if they want to seize the opportunity to lock themselves in to selling low and buying high before the cycle has had a chance to complete. Yes, sell low, buy high or halve the size of your home and do it now!
What this wily old property agent doesn't tell you is the flip side for the sellers; that it is only in the second quarter of the 'cycle' that they will receive their sale proceeds in an escalating market which would have greatly diminished in buying power by then. Only those with second properties or holding power can wait to buy their new homes in the distant downturn, when perhaps they can purchase a reasonable property in a decent area. Most though will be stuck with smaller units in outlying areas, their nest eggs shrunk and their long years of hard work all for nothing. The frenzy of 2007 left many, many owners dismayed, devastated, shortchanged, angry, broken. Do not forget .
At this point, we understand that owners of as many as 50 projects have recently formally started their en bloc sales processes and are gearing up to hit the market sometime in the first half of this year, some as early as this month. They range from small to large projects and are located in all major residential districts.
There are a lot of amoral speculators out there with properties they are dying to get rid of, even if it is only for a small profit. They show no compunction whatsoever in driving en blocs in estates, gathering the 20% and hammering away forever with their lies and half-truths.
Many more owners are likely to jump on the bandwagon, especially if the earlier ones prove successful.
There is nothing more frightening than the stupidity of the masses when they perceive themselves to be 'losing out'. It's almost as if they view the land beneath them as a block of ice, melting away, when in reality it is solid gold, in no danger of losing it's long term value (especially while the plot ratio is high).
If the projects are priced reasonably, we believe they should have a good chance of landing a buyer this year.
The only acceptable and 'reasonable' price should be based on what an owner can reasonably expect to pay in an uprising market 2 years down the line. Forget what the LTSA says or fails to say - it's REPLACEMENT value that is of the most concern for the genuine home owner/seller. A fair indication would be the cost of a new unit in the new development. Why sell a Mercedes and replace it with a Honda?

Reacting to the sharp upturn in mass market homes last year, the Government is releasing more land sites this year. Owners should note that these would compete for developers’ interest
Same old scaremongering tactics. Developers need land to develop - constantly - it's a fact of life so there's no need to panic. When times are lean the Government throws them sustenance food and they lap it up, but it's the land in the prime districts and developed estates they really want to sink their teeth into.

And do not to forget that no one can predict anything with certainty. Cycles are not on a nice, neat 4 year rotation, so don't give this Credo guy any credence; he is only out to sell anything he can get his hands on.
The 2006/2007 frenzy was an eye-opener to the many fault-lines and errors inherent in en bloc, both statutory and human. This property agent is hoping all will be forgotten, and owners will once again fall hook, line and sinker for these tired old inducements and rationalisations.
Sorry, but I didn't buy them then, and I don't buy them now.

Collective Sale fervour returning

 Sunday Times - 7 Feb 2010

Collective sales set to take off again

SINGAPORE) As many as 50 collective sales may be launched this year, though less than half of these could translate into actual deals before year-end, say property agents polled by BT.
A study by property consultant Credo Real Estate has listed a total of 34 possible properties that could be tendered for collective sale in 2010.
Eighteen of the 34 developments are either in District 10 or 15. 'These are among the larger high-density private residential districts that enjoy healthy demand for new homes and hence land for residential development,' says Credo's managing director Karamjit Singh.
Collective sales committees have been appointed for all the 34 developments in the list. Most have also appointed property consultants and lawyers. Some have begun signing a Collective Sale Agreement (CSA); however, a tender launch could well flow into next year, especially for larger estates.
Two of the 34 sites - Goodwill Mansion in Balestier and Holland Hill Lodge - have already been launched this year. Meanwhile, nearly half the developments on the list comprise fewer than 50 existing units each.
Agents say larger estates will take more time to be launch-ready as it takes longer to secure the minimum 80 per cent consent level from owners. It also requires several (usually three or four) extraordinary general meetings (EOGMs) before a site can be launched for sale under revised en bloc rules that kicked in from October 2007.
Mr Singh points out that even for an estate of say just 30 units, it could take about six months between the time owners requisition for their first EOGM and inking the sale to a developer. This used to take just three to four months before rules were amended.
Jones Lang LaSalle's head of investment sales Stella Hoh says: 'Small and mid-sized sites will form the bulk of new launches and actual deals up to, say, the third quarter of this year. Next year onwards, if the private residential market continues to be stable and sales volume picks up further, that will create more confidence for bigger en bloc sale sites to be launched.'
Colliers International executive director (investment sales) Ho Eng Joo reckons that projects in city fringe locations like Balestier, as well as East Coast and Changi areas, are more likely to succeed in en bloc sale efforts than those in the prime districts. 'Prices of end units (homes) in prime districts have not recovered to their 2007 peak, so it's harder for developers to cough up 2007 land prices that many owners expect.' In fringe locations, the price gap compared to 2007 has been much less.
Mr Singh suggests that it may be tough selling 99-year leasehold en bloc sites this year as developers can buy comparable plots under the Government Land Sales Programme. 'Likewise, prime sites very close to Orchard Road may also see a slow start as developers still have prime sites in their books, many of which were bought in 2006/2007.
'Where we expect to see greater levels of success would be (sites) in mass market and mid-prime locations which are realistically priced and offering unique selling points like being near to Sentosa, MRT stations, shopping centres and good schools,' he added.
Credo reckons about 30-50 sites could be launched this year, of which around 20 could be sold by end-2010. Knight Frank executive director Nicholas Wong forecasts 40-50 launches and 15-20 sales this year. JLL's Ms Hoh predicts that only 15-20 sites could be launched, of which 10 may be sold.
During the peak year of 2007, a total of 87 collective sale deals were sealed at a total of $11.6 billion. This fell to eight deals for a total $346.5 million in 2008 and just one deal at $100.8 million last year.
Owners looking to match or exceed 2007 prices could stand in the way of en bloc sales.
Savills Singapore's director of investment sales and prestige homes Steven Ming says that owners may expect higher premiums before they sign the CSA as prices could rise while they wait to collect their sales proceeds. 'It can easily take one and a half years from the point of obtaining the first signature to the time when owners receive full sales proceeds,' he said.
'Sellers, when they consider signing the CSA, look at how much premium they will get for their unit in an en bloc sale than if they were to sell it on an individual basis in the current market; as well as the future replacement cost for the property. Sellers seek a higher premium for fear of being priced out later if prices rise steeply.'
However, developers in their bids would be more mindful of changes in property cycles while they wait for Strata Title Board and possibly other court approvals before they can take possession of the site. 'The sudden market correction in late 2008 is still fresh on developers' minds,' Mr Ming notes.
Business Times - 12 Feb 2010

Green Lodge tender

Green Lodge tender receives 'a few' bids

THE tender for the collective sale of Green Lodge at Toh Tuck Road closed yesterday afternoon but it is not clear if a winner for the site has emerged.
BT understands that there were ‘a few’ bids for the freehold parcel, but marketing agent Newman & Goh was tight-lipped over the results of the tender. It is conducting due diligence and has imposed a blackout period in the meantime.
The 80-unit Green Lodge, spanning 151,075 sq ft with a plot ratio of 1.4, was put up for sale at end-December last year. The asking price stood at $135 million, and including a development charge of around $9.5 million, the price worked out to $683 per sq ft per plot ratio.
The winning developer would be able to launch a project with around 211 units measuring an average 1,000 sq ft.
A consultant estimated that the units could be sold at around $1,000-$1,100 psf, while Newman & Goh projected an average selling price of at least $1,250 psf.
In a report issued yesterday, analysts from Goldman Sachs expressed reservations over the return of collective sales activity for now. ‘Even though developers are financially stronger, we think they will choose to stay on the sidelines in the en bloc market until demand returns more visibly in 2H 2010,’ they said.
‘A good indication of potential trigger points for en blocs is the widening of primary over secondary market prices.’
Source : Business Times – 14 Jan 2010

Botanic Gardens View

Botanic Garden View battles on.

Dear fellow-owners,

As you will be aware, the Sales Committee has resurfaced with a new draft contract. To sum up our opinion of it, if you have read it carefully, you will see that signing it will deprive you of all rights against them in the event of malfeasance or negligence on their part, and will also bind you to accept whatever price they decide, no matter how low it is i.e. the reserve price might as well no longer exist for any effect that it will have.

The rest of the letter can be read on their blog here

Round 1 & 2 Enbloc journey

2005

Dec - Self-appointment of pro-tem En Bloc Committee

Dec - Informal valuation $389,719,233.00

2006

11 Feb - 1st Dialogue session

25 Feb - 2nd Dialogue session

19 April - Draft CSA and cover letter received by owners

14 May - CSA Dialogue session

05 May - First signing of CSA

15th/20th/21st/ 27th May 2006 - CSA signing

09 July - Dialogue session

15 July - CSA Dialogue session

29 July - Update by pro-tem committee tagged after the AGM

05 Aug - Dialogue Session

12 Aug - Dialogue session 
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NEVER SAW THE SC AGAIN UNTIL AFTER THE SALE>>>
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2007

21 January - purported 80% threshold reached

23 January - Press Release:- Sea Breeze apartments sold for $53.8 million
The Sea Breeze apartments on Joo Chiat Road have been sold for $53.76 million, which marketing consultant Jones Lang LaSalle (JLL) believes to be the highest price yet achieved in the area.
At the transacted price, the 56,376 sq ft site, which has a plot ratio of 2.1, sold for approximately $454 psf per plot ratio (ppr). There is no development charge payable, as a result of the high baseline.
Sea Breeze was sold to Grovehill Pte Ltd, whose directors are linked to the Tiong Aik Group whose last project was the 120-unit The Inspira at Arnasalam Chetty Road.
Sea Breeze can be redeveloped into an 88-unit condominium with a gross floor area of 118,391 sq ft.
JLL regional director and head of investments Lui Seng Fatt said that owners of the existing 56-unit apartments enjoyed a 50 per cent premium over current market prices.
The new development could be launched at an average price of between $850 and $900 psf, he said.
In another proposed deal, Tulip Garden, at the junction of Holland Road and Farrer Road, has been launched for collective sale through expressions of interest. The 20-year-old, 164-unit development is located on a 316,709 sq ft site with a plot ratio of 1.6.
Marketed by Savills Singapore, director Steven Ming said the indicative price guide is $900 psf ppr including development charge. This would give the site a price tag of about $456 million.
Based on the plot ratio, about 253 condo units of 2,000 sq ft in size, or 316 units of 1,600 sq ft, can be built. Mr Ming said almost 80 per cent of the residents have agreed on the proposed collective sale.
At the asking price of $456 million, the break even price is $1,250-$1,300 psf. The estimated launch price could be around $1,500.Mr Ming said average prices for recent launches nearby, like Ford @ Holland and Sixth Avenue Residences, are $1,200 psf and $1,100 psf respectively.
In Tampines, a 22-year-old former HUDC development, Tampines Court, has been put up for collective sale with an indicative value of $527 million, inclusive of development charges and differential premium of about $107 million.
It is marketed by Dennis Wee Group. Investment sales director Jimmy Teng said the 702,458 sq ft site has a plot ratio of 2.8 and a potential gross floor area of at least two million sq ft.
‘The successful developer could build about 1,700 units with an average size of 1,250 sq ft,’ he said, adding that developers also have the option to bid for one of the two subdivided parcels.
Source: The Business Times, 23 January 2007

27 January - Press Release:- Tampines Court up for en bloc sale (Weekend Today)

31 January - Announcement of tender in Straits Times

04 February - 80.00% - Statutory 8 week Notice

12 February - Press release:- Collective sale site in next wave may fetch around $1 billion each 

The record for collective sales in terms of absolute dollar price has been broken twice since the start of the year – Horizon Towers in January with $500 million, and Gillman Heights this month with $548 million.
But in the works are the next wave of collective sale sites about twice that quantum. These include The Claymore, a prime freehold site of about 246,000 sq ft at Claymore Hill, with a price tag said to be about $1.3 billion, and Farrer Court, a privatised HUDC estate, with a land area of 838,500 sq ft and an asking price believed to be about $900 million. Another large scale residential collective sale in the pipeline is Ridgewood Condominium in the Mt Sinai area, said to have an estimated price tag of over $900 million.
The $1.3 billion price being indicated for The Claymore reflects a unit land price of about $2,030 psf per plot ratio inclusive of an estimated $100 million development charge that its developer will have to pay to the state. This would set a new benchmark price for residential land in Singapore.
Apart from these jumbo collective sale sites, there are a slew of others that could be launched this year, although with slightly smaller price tags.This includes Tampines Court, with a $420 million indicative value, and several in the Farrer Rd area such as Leedon Heights (whose indicative price is said to be about $700 million) and Spanish Village (over $400 million). Tulip Garden was launched last month with an asking price of over $420 million.
The big question on many market watchers’ minds is whether there’ll be takers for so many big-ticket sites. Property agents are predictably sanguine.
‘There will be demand for big plots as increasingly you see developers teaming up with financial partners or funds from overseas. And these foreign players are looking for significant-sized acquisitions, otherwise they won’t bother spending resources studying the local market,’ says DTZ Debenham Tie Leung director Tang Wei Leng.
Agreeing, CB Richard Ellis executive director Jeremy Lake observes: ‘The deal size in terms of absolute dollar quantum is less of a hindrance than it might have been a couple of years ago, as there’s plenty of liquidity now. We see developers teaming up with other developers, or developers teaming up with financial partners, for large acquisitions.’
He acknowledges, however, that pricing is an issue. ‘Minimum pricing set by owners in terms of the unit land price (psf per plot ratio) for en bloc sales is being pushed into uncharted territory,’ he said.
But as residential project launches test fresh highs, the unit land prices being sought by some owners may not be completely far-fetched – although they seem high relative to previous benchmark prices for residential land, Mr Lake added.
An important factor that affects developers’ ability to raise prices of their high-end projects is supply in the location, note property players. And supply is one factor developers take into consideration when trying to decide whether or not to buy a collective sale site.
‘If you have just one large en bloc site in the vicinity but no new projects nearby, then the developer will find it easier to control the market and move up his selling prices. But when you have a few big ones in the same location, developers may be less enthusiastic about bidding for big en bloc sites in such micro-markets.’ One such example, say property watchers, is the Farrer Rd area.
However, Savills Singapore managing director Michael Ng, whose firm is marketing three sites including Tulip Garden and Spanish Village, is confident saying that the sites are in District 10, a prime district.
‘The area’s pull will become even stronger when the Farrer MRT Station (under Circle Line) opens,’ he said. ‘In fact, the area is just five minutes’ drive from the Grange Rd area where condo units are commanding $2,000 psf or even higher,’ he added.
Over at Tampines Court, marketing agent Dennis Wee and the appointed lawyer for the majority owners, Phang & Co, plan to make the huge, 702,162 sq ft leasehold site more digestible to prospective developers by dividing it into two smaller plots.
Developers will be invited to bid for one or both sites. The award will seek to maximise the overall sale price achieved for the two sites combined.
‘If one party submits the highest bid for one plot and another for the second plot, then both developers will have to jointly agree to buy the entire site as the two halves must be sold together,’ explains SK Phang, principal in the law firm.
After completion of the sale of the site, the developers would then partition the site into the two halves and each developer will become the sole owner of the half he has bid for.
As far as owners of the 560 units in the estate are concerned, their sale proceeds will be the average of their share value in the estate and the floor area of their unit – regardless of which subdivided plot their unit stands on.
Source: The Business Times, 12 February 2007

 

08 March - Close of Tender

25 March - Sold by private treaty

Purchase price: $395,000,000.00 + $10 million Beta Sum = $405 million

Dev. charge + Dif. Premium = $107 million

$260 psf of potential gross floor area. (pgfa) including developmental charges and differential premium.

*Average gross sale price per unit : ~$705K before adjusting for Alpha sums, deduction of costs and expenses etc
(as stated in property agent letter dated 27 March 2007) 
 

28 March - Press Release:- Tampines Court being sold for $405 million (Business Times)

28 March - Dialogue session

1-April - Dialogue session

21 April - Sale and Purchase presentation

31 March - 80.71% - Statutory 8 week Notice

03 May - Outline Planning Permission (OPP)

25 May - 81.6% - Statutory 8 week Notice

22 June - Upgrading to 99 yrs lease

30 June - Minority Dialogue session

19 July - 81.6% - Statutory 8 week Notice

21 July - EOGM

26 July - RPA in principle date of approval

28 July - AGM

12 Aug -

19, 20 August - Collection of disbursement fee ($781.25) from majority owners

5 September - Appointment of Valuer

12 September - 82.14% - Statutory 8 week Notice

06 November - 82.14% - Statutory 8 week Notice

27 December - Notice of application for Sale in 4 Newspapers

31 December - 82.14% - Statutory 8 week Notice 

2008

TAMPINES COURT CASE: STB 02/2008

07 January - Application for sale to the STB

18-22 January - minority objections filed

29 February - Day 1 minority mediation at the STB . Group of 39 legally represented, plus 4 single objectors with no legal representation.

10 April - Day 2 minority mediation

09 June - Day 3 minority mediation

16,17,18 June - STB Hearing. Group of 32 minority legally represented and 2 independent minority.

19 June - Buyer does not agree to amend the S&P Agreement (Beta Sum)

23 June - Interlocutory Application to Amend Application (in chambers).

Application withdrawn

27 June - Buyer not minded to agree to the extension of time (S&P)

30 June - Interlocutory Application to bring forward the date for the adjourned hearing

02 July - Minority objection to bring date forward

09 July - Arguments for and against presented

10 July - Further arguments added

11 July - Application dismissed by STB

16 July - majority apply to High Court to have the date of hearing brought forward : High Court originating Summons 941 2008/P

18 July - High Court Originating Summons 941 2008/P
Mir Hassan bin Abdul Rahman and Another v Attorney-General[2008] SGHC 147
Court allows date to be brought forward
21 July - STB Hearing day 4 and Majority Oral Submission
22 July - Minority Oral Submission
23 July - Written submission
24 July - Extra submissions?
25 July - STB dismissed the sale. Grounds for dismissal: lack of good faith in sale price and method of distribution.
25 July midnight- Qualifying Certificate expiration, Sales and purchase agreement expires.

The End of En bloc Round 1
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26 July - Annual AGM
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Aug - Aug 2009: general repairs to the estate. New car labels. New Access gate cards. Tree pruning and general landscaping works. New CCTV camera system at guard houses and side gates. Accounting problems solved.

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2009
Aug 2009 - Annual AGM. Repainting &  Repair works approved.

Oct 2009 - Repainting of estate, re-tiling of ground floor lift lobby, re-tiling of low-rise ground floor. New letterboxes, signage, dustbins, benches, replacement of corroded water pipes and other R&R works.

2010

April 2010: estate repainting and other R&R works completed.

Over 20% unit turnover since Aug 2008

Gathering of requisitions for a second attempt at a collective sale by a new owner in 2010

29 Nov - letter of requisition for EOGM from less than 20% of owners by share value to the Management Council

2011

10 Jan - Notice of EGM for the purpose of collective sale sent to all SPs with 29 Nov letter showing less than 20% by share value of SP's requisitioning.

24 Jan - Amended Notice of EOGM for the purpose of collective sale with new requisition letter dated 19 Dec 2010 with amended list of requisitionists

29 Jan  - EGM 1 for Collective Sale of Tampines Court

Quorum: 47% at 2.30pm

Number of SPs elected to the sale committee: 12 (6 new owners since 2009, 6 old owners)

One nominee refused to give full disclosure of her interests and that of her associates' interests in the estate. 

Itshometome later unearthed that this SC member had not disclosed :-

a) her co-mortgagee's second unit in the estate and 

b) her sister's holding of 2 units in the estate. 

Subsequent emails to the managing agent to void this member's nomination (in accordance with the Schedule) proved fruitless.

Letter dated Mar 24 to sale committee on the matter also proved fruitless.

Email to en bloc solicitor  went unanswered but was followed shortly by the resignation of the said SC member in Aug 2011 for 'personal reasons'. 

Time taken between EGM 1 and resignation of errant SC member: 7 months. So, no one actally 'voided' her nomination thereby proving that Paragraph (2) of the Third Schedule is bogus :

he shall, before his election, declare at the general meeting convened for such election, the nature and extent of all such conflicts of interest or potential conflicts of interest.
(2) The election of any person who fails to comply with sub-paragraph (1) shall be void.

26 Feb - SC Meeting
16 Apr - SC Meeting: 5 Marketing Agent presentations
03 May - SC Meeting: Shortlisting of Marketing Agents
23 May - Requisition letter to managing agent  for EGM 2
04 Jun -  Notice of EGM 2 sent to SPs (dated 4 Jun)
18 Jun -  SC Meeting: Legal presentation no.1
25 Jun -  SC Meeting: Legal presentation no.2
02 Jul -  EGM 2  for the purpose of collective sale (2-5.30pm)

Quorum: 30.71% (172 Units with share value 688) at 2.20pm

10 Aug - SC Meeting: Draft CSA
10 Aug - SC Meeting: Resignation of 2 SC members, amended CSA
20 Sep -  SC Meeting: EGM Agenda, Draft CSA, Reserve price, Recess Area
01 Oct -  SC Meeting: CSA discussion with lawyers and SPs
12 Nov - SC Meeting: no quorum:
19 Nov - SC Meeting: SC member resignation, letter of appointment of lawyer and MA, statement of income & expenditure of the SC, the RP, breakdown of En Bloc Fund, consider motion sent in by SP, finalisation of resolutions for EGM 3


DELETED MOST OF ENBLOC ROUND 2 BY MISTAKE!