An en bloc rush, or just false hope?
Vibe on the ground doesn't match analyst optimism
THE reports "Pasir Panjang apartment block up for en bloc sale" (Aug 24) and "Demand fires up en bloc market" (Aug 18) appear to portray the en bloc sale market in Singapore as strong and buoyant.
But is this really the case? Both reports are based on opinions of real estate agents, who arguably have a vested interest in keeping property prices perpetually on the boil.
A few weeks ago, The Sunday Times, in a glowing report "Signs of another en bloc rush", also reflected the optimistic views of a couple of property brokers who apparently specialise in en bloc sales. But in the same issue, its senior property writer sounded a more cautious note in the report "Selling en bloc? Big gains unlikely".
Where I stay, the chairman and secretary on an elected collective sale committee both sold their units within six months of the committee's formation, after they concluded that "the interest on an en bloc sale has yet to reach a level similar to our last en bloc attempt", according to the minutes of their meeting.
Given that this was their second bite at the cherry, they must have worked extra hard to get a good offer, but failed, leaving them to look after their own interests instead.
One cannot overlook the basic fact that all these projects will need funding, and an error in judging the strength of the market could trigger off a property crisis not unlike the sub-prime crisis America faced in 2008.
The optimistic confidence that "it wouldn't happen here" has been proved wrong on far too many occasions for us to continue to be sanguine in today's volatile conditions.
But is this really the case? Both reports are based on opinions of real estate agents, who arguably have a vested interest in keeping property prices perpetually on the boil.
A few weeks ago, The Sunday Times, in a glowing report "Signs of another en bloc rush", also reflected the optimistic views of a couple of property brokers who apparently specialise in en bloc sales. But in the same issue, its senior property writer sounded a more cautious note in the report "Selling en bloc? Big gains unlikely".
Where I stay, the chairman and secretary on an elected collective sale committee both sold their units within six months of the committee's formation, after they concluded that "the interest on an en bloc sale has yet to reach a level similar to our last en bloc attempt", according to the minutes of their meeting.
Given that this was their second bite at the cherry, they must have worked extra hard to get a good offer, but failed, leaving them to look after their own interests instead.
One cannot overlook the basic fact that all these projects will need funding, and an error in judging the strength of the market could trigger off a property crisis not unlike the sub-prime crisis America faced in 2008.
The optimistic confidence that "it wouldn't happen here" has been proved wrong on far too many occasions for us to continue to be sanguine in today's volatile conditions.
Today: Aug 26, 2010
This leads me to my next point. When a sale committee member resigns from the committee, there is no prescribed mechanism for him to be replaced. The LTSA is silent on the issue. Either the place remains unfilled or any Tom, Dick or Harry can jump in and take over. The owners have no say on the matter whatsoever. A position as important as chairman could theoretically be handed to the most unscrupulous person in the estate.
Unless owners stipulate otherwise what is to be done under such circumstances IN THE CSA
Do not accord the sale committee your full trust. Do not assume they will prioritise your interests before their own.
In the end, when it comes to money, it is always everyman for himself.
Residents vote in the chairman and secretary after they have declared their interest in the estate. Based on info provided, residents can decide whether to vote them in.
ReplyDeleteOwners can also propose a motion in the EGM to clarify the handling of resigned SC members.
Yep, I said that too.. in another post under En Bloc Process
ReplyDeleteWHAT OWNERS SHOULD REQUEST FOR
AT THE FIRST EOGM (list not conclusive)
* Owners demand that if a seat becomes vacant then a new member can only be instated through election by owners at an EOGM/AGM convened under the Second Schedule.
* That a candidate specifically rejected at the First EOGM cannot be subsequently seconded onto the committee.
* No SC member can be in arrears to the MCST, whether declared in writing or not.
* A SC must resign immediately if there is conflict of interest, or a possibility of conflict of interest whether he has declared it to the Chairman or not.
* Demand reaffirmation from owners before the award of a sale tender through an EOGM specially convened for that purpose.
* A formal Valuation to be done by the owners themselves before selection of the property agent to set the basis for a reserve price. This is to be done in addition to the mandated Valuation at time of close of tender or public auction.
* Owners may request for further valuations at any point in time at an appropriate cost.
* Owners request to be shown the Business Proposal shown to potential buyers.
* Owners request that the reserve price's 'premium' be maintained in a rising market by adjusting the reserve price upward accordingly at regular intervals.
* Owners request that the premium be guaranteed and enshrined in the CSA.
* That a 1-for-1 exchange be included as a second option for owners at time of sale, first option being cash.
* That any owner may request to be present at the opening of the public tender box and be shown all the bids.
* That the tender box be opened at the Tampines Court management office only.