Further musings on the draft CSA (dated 23 August)

Take a very close look at clause 8.3

I do believe the sale price cannot be below the valuation done at close of tender. If the valuation is higher than the RP then the valuation trumps, the RP is bumped up to match the valuation. 

Surely, Sellers CANNOT  'approve' to sell the land at an undervalue - and that means at an RP or proposed sale price lower that the valuation.

So, the situation envisioned in 8.3 cannot happen - so this clause is complete nonsense and should be scrapped.

If the valuation is at the RP or higher and the proposed sale price is lower - then  that is where shenanigans come into play. The SC/MA will seek a new valuation to match the lower proposed sale price.

And miracles are performed.

This is the reason for the blank cheque in  4.4.1

The Time Line

Enbloc Round 2
According to the LTSA and terms in the draft 2 CSA:

When does the CSA expire?
CSA but no 80%: - 12 months from date of first signature (Agreement Date) (13.1.2 (a))

CSA + 80% but no Sales and Purchase Agreement (SPA) : - maximum 24 months from date of first signature (Agreement Date). (13.1.2.(b))

CSA + 80% + SPA :- no expiry. The CSA will remain in force until completion of sale and vacation of unit. (13.1.1)

In the draft 2 CSA (TC Enbloc Rd 2) we are told that if there is a supplemental agreement to lower the RP, it is not a fresh agreement and will not add another 12 months to the sale process (8.1.3(d))

BUT according to the following High Court decision, a supplemental agreement  is a fresh agreement that adds 12 months to the process, so my question to the solicitor is this:

Question? Which takes precedence? The CSA or a High Court ruling?

Koon Seng House High Court Decision

7    Subsequently, however, when bids were invited for purchase of the property, there was only one offer for $18,800,000. Realising that the reserve price then was too high, the owners agreed (after discussion) to reduce the reserve price to $19,800,000. To effect this variation in the CSA, a supplemental agreement was signed. The first signature to the supplemental agreement was appended on 24 March 2007. By 7 May 2007, the owners of 27 out of 33 units (including the nine terrace houses) had signed the agreement. Other owners progressively added their signatures so that by 6 September 2007, the owners of 30 out of 33 units had validly signed the supplemental agreement. This included the owners of 21 out of 24 flats.

36    First, where an earlier CSA had failed to achieve its intended purpose, ie, to sell the land to a purchaser, the proprietors of the land could not be precluded from making a new agreement with a lower reserve price. Hence, the supplemental agreement constituted a fresh agreement. Therefore, time for the purpose of para 1A(a) of the Schedule should be reckoned from the date the first signature was appended to the supplemental agreement.

37    Second, s 84E(3)(b) provides that proprietors holding not less than 80% of the aggregate share value may apply to the Board for a collective sale order. At the earliest, the 12-month period within which application may be made to the Board starts when 80% majority has been reached or first crossed (as the case may be). The plaintiff was therefore wrong to say that time for this purpose started running from the date of the first signature. There are two distinct 12-month periods. As I said, application may be made to the Board as soon as 80% majority has been reached or first crossed. However, this does not mean that the 12-month period within which application must be made to the Board necessarily starts then (see para 1(a) of the Schedule). For example, it could start at a later date when a greater percentage majority is reached so long as the time elapsed from the first signature to the time when such desired majority is reached is also not greater than 12 months (see para 1A of the Schedule).
38    The first signature to the supplemental agreement was appended on 24 March 2007 and the last was on 6 September 2007 (well within the 12-month period within which a majority of not less than 80% had to be reached). The other 12-month period (ie, that within which application to the Board had to be made) commenced on 6 September 2007. Therefore, the application made on 16 April 2008 was well within time.

Sale Committee Meeting No 8 Minutes

EGM 3

The EGM 3 that very nearly didn't happen. The 1 hour deadline for the 30% quorum inched closer and closer and I think they just made it with less than 5 minutes to spare. In the end there was just 31% attendance. This was rather surprising; I was expecting a higher turnout.

Another big surprise was in store. Apparently there was a last minute meeting and a decision taken NOT to proceed with item 2.1 on the agenda  'To resolve and approve the terms and conditions on the Collective Sales Agreement'.  A wise decision, as really, this half-baked, ill-conceived draft CSA would never have reached it's intended goal anyhow, which is to garner 80% support from owners. So it's back to the drawing board and owners will be presented with a full draft 3 sometime in the near future. No blank pages or spaces for owners to wonder at, but if they are going to be intransigent on making substantial changes to the body of the draft, then it might be just a colossal waste of time (and MCST money). We are not a virgin estate, we require an extra-ordinary CSA with non-standard terms.

I never thought I would say this, but I have a new-found admiration for out ex-enbloc lawyer and his tremendous organizational skills. He certainly was the en bloc king in that respect.

The EGM 3 wasn't a complete waste of time, the remaining 7 resolutions on the Agenda were voted on.

2.2 To resolve and empower the SC on appointment of an independent property consultant for report on apportionment of Sales Proceeds

Yes: 83%

I voted NO because there's no need. Tampines Court is not a difficult development, we are virtually all the same size and pay the same maintenance fee. It is only complex developments with wide ranging strata area and/or commercial units that might require outside help. The calculations involved for TC are very easy to do.
Problem: This report has to be done before the next draft is sent out, so who is going to pay for it up-front?

2.3 To resolve and decide on the Reserve Price

There was much discussion about this. The marketing agent put up his proposed RP and that's what we voted on. 

Yes: 79%

I voted No, it's high enough to entice many owners, but not me.

For reasons of confidentiality, the RP cannot be disclosed on this blog.

2.4 To resolve and decide on the need for independent Valuations prior to fixing the RP and empower the SC to appoint the Independent valuer.

Again a lot of discussion. To me this resolution comes too late, and I was particularly perturbed by Valuations in the plural.

No: 59% 

2.5 To resolve and empower the Sales Committee to increase the Reserve Price
Yes: 79%

2.6 To resolve and set up an Enbloc sale fund to meet the Preliminary Enbloc Sale expenses (out of pocket expenses, meeting expenses, Independent valuers/property agent fees and authorise the SC to collect and account for such fundsLots of discussion. People wanted to know the exact sum involved. I believe this will appear as a new clause in the the next draft CSA. My own view is that a proper list should be compiled and a reasonable sum set.
Yes: 64%

2.7 To resolve and authorise the MC to permit the Sales committee to use the conference Room at no costI voted Yes. Sure, let them have access to a few tables and chairs, it's just a room for goodness sake. 
Yes: 83%

2.8 To resolve and authorise the SC to use the Void decks for any meeting of the SPs with the Solicitors for signing the CSA or for meeting SC members. I voted Yes. Well where else are they going to go?  KFC? 
Yes: 82%

A female lawyer did a brief presentation of the salient points in the CSA. I think they were trying to counter-argue some of the points in this blog.  They seemed to be spooked by my deduction that the purchaser could buy units up individually and were quite adamant that this was not so.   If that is true then they will have to remove all ambiguity from the terms and keep things simple and crystal clear. As this was not the EGM to go into too much detail on the terms, questioning by SPs was cut short.

OFFICIAL RESULTS
 Shedule time to start meeting: 1pm
Quorum reached: 1.57pm,  31% (744 Share Values)

Collective Suicide Agreement DRAFT dated 23 Aug 2011

UPDATE: 25 SEPT

This draft is not the final draft. Owners will be presented with a NEW draft  to decide upon at a special EGM 4 .

I have no legal training whatsoever... the post below is just my own armchair reading of the Draft CSA. You ought to get your own independent legal advice on the CSA before making any decisions.

 In a nutshell, by reading between the lines, this is what I think signing the CSA means:-

NOTE: After a rethink, I made some amendments to my original post; especially to the 'completion date'. The OPP, Lease top up and QC are done before application to the STB and not after legal completion. )

1. I agree to sell the ‘units’ by any mode of sale, and not just by way of tender, auction or private treaty only,  as stated in the LTSA.  (8.1.1)(Definitions Sale Contract date)
2. I agree to search for a buyer immediately and not wait for the 80% requisite majority. (8.1.1 & 8.4).
3. I agree to allow owners sell their ‘units’ directly to the purchaser and I am not sure whether they are party to the CSA or not. These direct sellers might be getting a better deal but I will never know.  (8.1.12)
4. I agree to give myself 3 months to find a new home and vacate Tampines Court. (9.2)
5. I agree to allow the developer into the estate during those 3 months to start demolition/digging/building of show flats etc (11.26)
6. I will continue to pay full maintenance, even though the estate is now dirty, dusty, noisy and dangerous. (8.1.8)
7. I will continue to pay property tax even though, by the Law Society of Singapore's Conditions of Sale, it is for the purchaser to pay for all outgoings after the date of completion (Definition of Outgoing, 8.1.8)
8. I agree to let the Solicitors retain x% of my Gross Sales Proceeds for payment of outgoings I should not be paying for in the first place (12.4)
9. I agree to surrender my liberty (and common sense) and sign any piece of paper shoved in front of me sight unseen. (11.7 & 11.21)
10. I agree to bind myself with the most pernicious of clauses and to hand the Developer a potent weapon to use against me in a court of Law.  I am happy to bind myself totally and leave myself with no legal avenue for redress.  (11.21)
11. I agree to make the sale committee all powerful and myself a vassal (4.4 & 11.9 & 11.21)
12. I agree to spend thousands from the estate's sinking fund to hold any number of EGMs for any reason relating to the sale (4.4.10)
13. I agree to ignore the new LTSA rule and kick out the sole minority owner on the sale committee even though she has a statutory right to be there until application for sale to the STB. (4.4.10)
14. I agree to give the sale committee a blank cheque in order to choose a valuer; indeed they can choose as many valuers as they like without regard to cost. Property Consultants can also be engaged in this free spending activity. (4.4.1 & 11.29)
15. I agree to give the sale committee a blank cheque and allow them to spend my money freely in the engagement of any number of other professionals which might include;  senior counsels (remember the three at the STB from round 1!) other solicitors not directly involved in the sale  even though by LTSA, I need only engage a 1 solicitor, 1 marketing agent and 1 valuer. (4.4.2 & 11.29)
16. I agree to another blank cheque which allows the sale committee to spend unlimited amounts of money from my sale proceeds to prosecute my fellow neighbours and myself. They may spend freely on other solicitors and consultants with my blessing. (11.21, 4.4.8 & 11.29)
17. I agree that I cannot possibly know what the eventual costs and expenses of this sale will be with all this free spending activity going on.
18. I agree to let the sale committee change the terms in the CSA to suit the purchaser in the sales & purchase agreement (S&P). (9.6)
19. I agree to go above and beyond the duties of a vendor and what is required by me in the LTSA  and help the purchaser in the redevelopment of the land (4.4.7)
20. I agree that a retention sum of xx% of my Gross Sales proceeds can be withheld until vacant possession by me. (8.1.10)
21. I agree that a retention sum of xx% of my Gross Sales proceeds can be withheld until the last person has left the estate (9.4)
22. Hell, I even agree that the retention sum of xx% can, in fact, be as high as 100% if the other sellers agree (and they will) (9.3)
23. I agree that the Representatives can go ahead with all High Court actions without first asking for my reaffirmation (5.2.6) and spend as much money of my sale proceeds as they like in the defense of the sale (4.4.2 & 5.2.6)
24. I agree to ignore the LTSA rules and state that the reserve price is in cash only, even though the LTSA says 'in cash, in kind or both'.
25. I agree that only the sale's committee approval is required to raise the RP. So, if the market rises by 10% and the SC decide to raise the RP by only 1% (giving the Purchaser a nice bonus aka Horizon Towers), I cannot disagree with them.  I look forward to repeating the mistakes made by other estates.
26. I agree that the reserve price (the minimum proposed sale price) can be lowered, but I do not know the time frame or the mechanism involved.
27. I agree that the minimum sale price may be even lower than the proposed sale price by an undefined amount, which could be millions. (8.1.3)
28. I agree that if I withdraw my consent to a lower RP then I also agree to be put in legal limbo. I am neither majority owner nor minority owner.
29. I agree to continually inform the Purchaser of any change in address and telephone for seemingly nothing more that their own data collection (8.1.14)
30. I agree that only Sellers and not all Owners receive some of the Notices (16.3)
31. I agree that a Sellers meeting can be held at a drop of a hat with no minimum time of notice. It is entirely possible that I miss these important meetings but that is okay, because I have agreed to vote for any matters concerning the sale in advance. (11.10, 11.9, 11.21)
32. I agree to bind myself with 33 covenants (11)
33. I agree to gag myself and keep the CSA and S&P secret (11.8)
34. I agree to hold myself 100% liable for any costs, any expenses,  any damages and claims that may be incurred by the sale committee members and indemnity them for any error or act of omission on their part. Any error or act of omission on my part will be dealt with severely and I shall have no indemnity whatsoever. ( 6 & 11.29, 14.1)              
35. I agree that whatever the sale committee does, it does so in my name (11.27)
36. I agree that whenever a Sellers Approval is required, I will approve. (My conclusion only from combining clauses; namely 11.7, 11.8, 11.9, 11.10, 11.21, 11.27)
37. I am aware that the all important COMPLETION DATE is wide open, and that the developer will have the ultimate control on when the S&P expires. I know this from previous collective sales (HT, Gillman Hghts etc) and from TC’s own experience. Extensions to extensions are common practice. 

I feel there are some very serious problems with this CSA and the method of sale which it proposes.

(a) First of all, the CSA is incomplete.  It is always unwise to approve  a document which is still in the earliest stage of drafting. Important pages are left completely blank, information necessary to make an informed decision absent. By the LTSA, the CSA must state the Reserve Price, Method of Apportionment of Sales Proceeds, Solicitor and Marketing Agent Fees, other costs (such as compensation fund), person entitled to interest derived from moneys held by the stakeholder and date of delivery of vacant possession of the lot.  Only the marketing agent fees have been included, the rest have not or are vaguely set out. One cannot simply assume or imagine with a document of this importance that the correct information will be appended later on. The CSA has thus been presented to us prematurely and cannot be passed in it's present form.

(b) 'Units' verses the LTSA 'all lots and common property in the strata plan'.

I have to wonder at the wisdom of 'dumbing down' a legal document into the vernacular if the essential meaning gets lost in translation.  There needs to be clarification on what is actually being sold in this collective sale. Starting with the Definitions of 'Collective Sale', 'Purchaser' , 'Sale price', and 'Units';  there clearly is no mention of common property. Indeed under 'Units', it refers specifically to the Schedule 1 at the back of the CSA - a Schedule that is completely blank. So we do not know exactly what units will be eventually added to this page - and consequently we do not know what is exactly being sold collectively.  Will it be 560 or some other figure? Do not assume, one must see it in black and white as that is the whole point of legal documentation.   Further to this point, please take note of clause 8.1.1 whereby  Sellers agree to sell their units by any mode of sale and 8.1.12 where the Purchaser may require separate agreements for the sale of each unit. The combination of a loose meaning for 'Units' and a Purchaser going around apparently mopping up units as if they were on the open market makes me wonder if the wording is not intentional after all.  If 'Units' is indeed synonymous with 'all lots and common property in the strata plan' then it must specifically say so. The Purchaser cannot buy units individually, they must be sold as a collective package, or not at all.

(c) The mode of sale is at variance with the LTSA Third Schedule 11.(1)(2)(3).
There are only three methods of sale in the LTSA: public tender, public auction or private treaty. This CSA does not restrict itself to these three alone, but opens the door to any mode of sale in clause 8.1.1. This is a reversion to the old ways and a possible sale aka round 1.
There is no reference at all made to 11.(1) of the Third Schedule in the CSA but there is a lookalike clause in 2.5 . Important words, however, have been substituted, the word 'only' has been scrubbed and there is a subtle change in the meaning.  There is no doubt that there will be a tender or auction as we are assured of that in clause 8.1.11 - but it may just be going through the motions of satisfying the mandatory requirement. Any mode of sale means just that, anything is possible. Tender, Auction, Private Treaty, Expression of Interest (8.4), Invitation for an offer to purchase (8.4), separate agreements (8.1.12) - or a mix of of some sort.  The 5 possible modes of sale are envisioned and cemented in the DEFINITIONS  of "Sale Contract"
I would advocate the removal of  clauses 8.1.12 , 8.4,   'any mode of sale' in clause 8.1.1, and the alignment of all related clauses to the exact wording of LTSA 11.(1)

(d) Promises and loss of liberty. The 33 covenants and agreements are not for the fainthearted. A seller may be the legal owner of his property but he is not the master of his home or his destiny - the SC is (and through the SPA, the eventual Purchaser) . Owners need to be aware of clauses 11.7, 11.9, 11.10, 11.21 as being particularly restrictive and controlling. In fact, I believe the acceptance of these clauses will impinge on the Sellers liberty to choose when it comes to executing his 'Approval' on certain matters. I would advocate clause 11.7 come with an exception for those documents that require 'Sellers Approval'.  Sellers need to be certain that any non - approval will not be in breach of the Agreement and expose them to being sued under clause 4.4.8. Clause 11.10 needs to be amended likewise, there must be liberty to vote 'against ' and not only 'for' any matters relating to the collective sale. I suggest a rewording to 'vote on' with no negative repercussion on the Seller.  Similarly 11.21 should be scrapped in it's entirety as this is the mother of all knuckleduster clauses - it strips the Seller of their right to dissent, even in the event of a disastrous sale. 21 Phoenix Court majority owners found this out the hard way at the High Court when the judge came down very heavily on them drawing on this very same clause. On top of that, as they were obliged to indemnify the sale committee jointly and severally against all losses, damages and expenses ( same as 11.29 in our CSA) they were ordered to pay indemnity costs to all 9 SC members. Thus, such provisions in our CSA should be removed, for owners' protection.

(e) Sellers' Approval for clauses 8.1.3, 8.2.1, 8.2.2, 9.1, 9.3, 12.2. . Owners will need the Solicitor at the EGM to state for the record the exact process by which Seller Approval, especially for clause 8.1.3 would be executed. The actual process is vague which is in stark contrast to the precise legal nature of the rest of the CSA and so should be amended  to include the detailed mechanism by which Sellers' Approval is obtained. . Sellers' Approval is required for  a) lowering of the RP b) amending the Method of Apportionment and c) extending the SC approved 2 month extension of the  Completion Date

Sellers' Approval is a mirage in the SPA
How potent or weak is Sellers' Approval?
Phoenix Court Story: Under the SPA, the sellers had 6 months to obtain the STB approval  failing which the SPA would terminate. They received a letter from the Purchaser reminding them that they had to use their best endeavors to perform the SPA failing which the Purchaser was entitled to its remedies under the SPA.  They were told that in order to satisfy the requirement of using it's best endeavors under the SPA and to avoid breaching the contract in the event the STB order was not obtained in time, the sellers had to extend the validity of the SPA. The SC called for an urgent sellers meeting and less than 80% approved the extension. 14 angry sellers took the matter to the High Court. The ruling made was very illuminating; clause 3.(i) of their SPA stated that the Agreement would terminate at 6 months if no STB order was obtained. The STB order was not made in the 6 months time frame but because the sellers had given the SC wide-reaching powers including the authority to negotiate and enter into an SPA , because the sellers, by law, have to use their best endeavors to obtain the order from the STB, and because sellers had signed a promise not to do anything whether by act or omission that may prevent or otherwise be detrimental to the Collective sale or the fulfillment of any of the purpose under the CSA or the SPA, the extension was guaranteed. The lesson I have learned from all this is that it does not matter one iota what SPA says with regard to termination or extensions - the Sellers have no choice but to extend or they are landed in hot water.

There is one glaring omission from this list of Sellers' Approval - and that is to seek  Sellers' Approval or Reaffirmation before the SC sign for any SPA. If they can take the trouble to get 80% signatures for the above 3 matters - then there is NO REASON why they cannot add this to their list. There is a perfect point in the process where this can be done; the final scheduled Subsidiary Proprietors meeting (but not after the sale, please, that would be  preposterous!)
Third Sch: (4) As soon as practicable after the close of the public tender or public auction referred to in paragraph 11 or, where applicable, after the collective sale committee has entered into a private contract under that paragraph, the collective sale committee must convene a meeting of subsidiary proprietors, of which at least 7 days' notice is given —

    (a) to provide information on the number of offers received for the collective sale and the     respective prices so offered; and
    (b) to provide information on the terms and conditions of the sale and purchase agreement.
At the end of the day, this is the most important condition for owners, and if 80% want to proceed from this point onwards, then all the extensions to extensions etc can be happily entered into.

(f) The omnipotent Sale Committee
The powers given to the sale committee are wide-reaching : 4.4.1 to 4.4.13 , 9.6, 5.2.6, 8.1.11
According to the 2nd Schedule (4) “powers, duties or functions shall be decided  by ordinary resolution passed at the general meeting.”  So the extra powers 4.4.1 to 4.4.13 should have be voted on separately and not passed with all the other terms in the CSA. 


4.4.1 and 4.4.2 are open to abuse and owners might find themselves severely out of pocket if they sign these clauses. The SPs at EGM 3 on Sat 23 Sep 2011 voted against doing a valuation prior to setting the RP. So  'more' can be deleted in the sentence as only 1 valuation report is called for at close of tender. Is the MA envisioning engaging a second Valuer if the Valuation at close of tender is higher than the proposed SP and the valuer refuses to reconsider? (aka Marine Point 2011). And why are other property consultants added to the list? What is their function? Aren't we paying ERA $X million if the sale is successful? Other professionals can mean a dozen lawyers, senior counsels ...
4.4.3, 4.4.4, and 9.6 is where the real danger lies.
4.4.3 It is not for the sale committee to propose the terms of the Agreement solely - Owners  can ask for what they think is necessary for the process, or for them to participate in the process. The ultimate choice is with the owners themselves on how the sale should be conducted.
I wonder if the drafter of this CSA was aware of the significance of the numbers 444 when he chose to use them for this particular clause - it surely is a die-die item! Too much power is being given to the SC, especially when 4.4.4 is combined with 9.6 (which allows them to change the terms and 5.2.6  'take all actions'. The SPA is far more dangerous document that the CSA and  owners will not have the luxury of looking over the terms and conditions as the SC will  decide (or capitulate) on all the terms. Just by looking at the Sale Term Contingencies (9) you can get a feel for how this marketing agent is readying for a pro-Purchaser Agreement. There is nothing good here, just an ominous warning of things to come. The CSA  is taking care to get early clearance for the worst of Purchaser demands when they should be shoring up owners interests and concerns.  Worst of all is 9.6; a total repeat of round 1. Why are we bothering to discuss the terms if the SC can change them willy-nilly afterward?  Dangerously absurd.

I advocate :-

• the removal of clauses 9.6, 4.4.1, 4.4.2, 4.4.3, 4.4.7, 4.4.8, 4.4.10
• amendment to  4.4.4  'to  ............. purchaser and to seek approval from the Sellers at the Scheduled Owners meeting to which 7 days notice has been given before approving ................................ Sellers'. 
• amendment to 4.4.13 to include 'all other laws, regulations or government policies '

(g) Lowering of the Reserve Price 8.1.3
This is new ground for Tampines Courters and we should tread very carefully by making sure there are no traps ahead. Owners should first be satisfied that a fair and transparent mechanism for signing any supplemental Agreement is in place.  The time frame must be established and adhered to.
Clause 8.1.3 (a) needs to be explained because it makes no sense why 'below' is there if the proposed sale price is already on the table. There is definitely something wrong here.
There is always the danger that some owners might get 'top ups' to encourage them to re-sign.  It is illegal, but really, what can you do about it?  If it is done in stealth then how to catch them at it?  Clause 8.1.12 looks suspicious to me for this reason.
I advocate the removal of 8.1.12  because why give the Purchaser a legal loophole if they are caught topping up.

(h) Solicitor needs to explain these funny clauses
There is another clause that gives me pause for thought: 2.11 and it's 'or otherwise where they enter', because I do not know what supplemental agreement they are talking about. Neither am I sure if all 4 instances are referring to the STB and High Court orders 
In clause 2.12, how can there be an 'or otherwise'? Surely only the STB or the High Court can force a minority owner to be bound to the terms of the CSA? Only they have the right to strip owners of their proprietary rights.
Clause 8.1.4:  So, if the Solicitor is tardy in sending out the letter, and the Purchaser claims he never received it, these can add  months on to the completion of sale. Why is it not 3 months from the date of receipt by the SOLICITOR of the STB's confirmation?

(i) Completion Date (8.1.4, 9.1)
Clause 9.1 blows the completion date right out of the water. The Purchaser can delay the date of completion ' for any other reasons'. So, if the property market takes a sudden downturn, the Purchaser can put the sale on hold for a few years? It all hinges on whether 'Sellers' Approval' has any bite  - or is it just whitewash. Will a Sellers' obligation to use his best endeavours to give effect to the terms of the agreement coupled with his multiple covenants render him powerless to refuse? Turn your thoughts back to the gun held to the Sellers heads in Horizon Towers and Phoenix Court and probably many more if I dig deep enough.

(i)Dreadful Sale Term Contingencies
In round 1, some of the SPA terms were owner-friendly: -for example,  only 5% of the sales proceeds to be retained until vacant possession, Owners to pay a token $1 rent per month to stay for the FULL 6 months until vacant possession.  Over-stayers to pay $300 per day. Non completion due to death or incapacity was 1 month for each occurrence. Owners did not have to give vacant possession simultaneously or moneys held until the last person left. The owners did not have to pay property tax and the Purchaser paid for all outgoings.

Compare that to the full 9. Clause:  9.2, 9.3 (a real bruiser, read it as 100%  again with a possible whitewashing Sellers' Approval), 9.4, 9.5. There are people in the estate who haven't moved home in 26 years; you can't expect them to find a new home in 3 months. Only those who have second properties can move out at such short notice.  If the Purchaser wants this term then the SC should tell him a straight No! The LTSA allows for 6 months, the Purchaser knows this and should not disturb this condition for collective sale.

We do not need to hobble the Sale Committee in their negotiations by agreeing to pro-Purchaser terms in advance.  These are not 'deal breaking' terms, they are arm-twisting terms. Lets have some faith that our negotiating team can do better than this. If not, why are we sending in a bunch of schoolgirls to do man's job? Why are we throwing in the towel before the fight begins?
I advocate the removal of all Sale Term Contingencies

(j) Dreadful Covenants and Agreements
11.5, 11.6 ; Who  decides what is sufficient? Why don't we just get a 'cat-o-nine-tails' and whip the owners into submission? We must not leave any owner out to dry like this, I would prefer to see a reasonable set sum ($300 per day) rather than an open 'claims, losses or damages' which would bankrupt anyone . There is no mercy, no discretion, no consideration at all for how an owner would find himself in this predicament. Remember, this is an Agreement between neighbours,  have we become that bloodthirsty?

(k) The execution page (page 30)
VERY POORLY DRAFTED - 
What's missing:

• Name and IC number of Seller(s)
• Place of Signature
• Contact number
• Reserve Price (because it is SO important)
• Special Conditions/ Supplemental agreement(s) (if any)
• Previous Rescission date (if any)

Some points from an SP

The following is an email I received from the vice-chairman of the SC. He requested that I post it on my blog. Sorry the format got a bit messed up. I have edited out my proper name only and replaced it with itshometome. 

 MY OBSERVATIIONS ON ‘itshometome’‘s  QUERIES  ON DRAFT  CSA ( collective suicide agreement)

1.  8.1.1   “ ANY MODE OF SALE “ , in my view .would include sale  that could be a combination of  the three methods specified   and not by one specifically  - I  would think these words can be deleted too – SC will request solicitors to clarify. 
2. 8.1.1 and 8.1.4 – Clause 8.4  is intended to provide SC a means to test market conditions ahead of 80% and  is only a contingency for prudent use.
3.  8.1.12 : This clause is mean to provide “separate sale contracts with buyers by each seller” (if so required by buyer) but the terms of sale will be what has been agreed upon as collective sale – it would not lead to any seller getting a better deal 
4.  9.2  -again a contingency condition subject to SC approval  - and  not a blanket concession to buyers – SC  PROPOSES TO DELETE THIS CLAUSE
5.  4.4.7   This clause does not give the buyers the “powers  of demolition etc  as alleged but only refers to execution of documents  that may be needed by buyers- 
6.  8.1.8  If any seller does not vacate as agreed upon as per CSA, he is naturally responsible for outgoings if any – how can be he exempted ?
7.  8.1.8    The law society conditions do not apply where seller  does not vacate as agreed to him by completion date
8. 12.4   is a logical clause following the failure to complete  by completion date-  the presumption of the SP does not appear correct
9. 11.7 &11.21   the interpretation given by itshometome is not correct  in my view . as  it refers to survey or any other documents  that are “ INCIDENTAL OR NECESSARY” for the purpose of the CSA agreement  - it does not say SP should sign any document of abject surrender or abrogation 
10. 11.21    I do not agree with itshometome's inference or  stretch of the meaning and effect of this clause – SC WILL REQUEST LAWYERS TO CLARIFY
11.  4.4,11.9 AND 11.21 :   Clause 4.4  begins with the  CLEAR STATEMENT that the SC has all but only  the POWERS , DUTIES AND FUNCTIONS CAST UPON THE SALE COMMITTEE UNDER   THE STARTA ACT” and ends with 4.4.12 and 4.4.13  STATING THE FIDUCIARY DUTIES ANDOBLIGATIONS OF THE SC UNDER THE ACT “11.9 refers to  “ coopereation “ and 11.21 refers to survey forms or documents having correlation to the purpose  of agreement. I DO NOT SEE ANY REASON FOR itshometome’s CLAIM THAT THESE CLAUSES MAKE ANY SIGNATORY A “VASSAL" . SC WILL REQUEST SOLCIITORS TO  CLARIFY FURTER IF NEED BE.
12. 4.4.10  This clause only states that SC will convene EGMs in accordance with Strata Act.
13. In my View this clause needs AMEDMENT  since EGM is not necessary to remove any SC member  who has not signed CSA as  Sale committee itself can do so Solicitors are requested to  verify this and amend  suitably, if required
14. 4.4.2/11.29  These clauses are not an authority for BLANK CHEQUE “in my view but only provide for a  contingency if more than one valuation needed . When a majority of SPs constitute an SC , I    do believe that they will also trust SC to exercise the  necessary discretion  based on  evolving market situation (This issue has been considered at recent EGM ON 24.09.2011)
15. 4.4.2 AND 11.29 :   4.4.2 may be deleted  though it does not mean a blank cheque situation . Clause 11.29 covers a very possible scenario and does not mention about appointment of  more than one solicitor. In SC’S view RHT law LLP has the required expertise to handle these situations on their own.
16.  -
17. I do not comment as it appears “ free for all “   view and I am unableto ascertain “what free spending activity “ is being referred to .( No clause quoted)
18. 9.6  This clause has been discussed and clarified by the Solicitors at the EGM on 24.09.11. In any case , I am requesting the Solicitors to clarify and amend further if necessary
19. 4.4.7   I do not agree  with the views of itshometome on this clause –after all cooperation with any buyer without prejudice to our right of sale or to terms of sale  ( within legal bounds) is not to be objected to.
20. 8.1.10  I see  no “ illegality “in this clause   which is a standard  clause .
21. 9.4      Yes  itshometome's objection deserves consideration and Solicitors will  be requested  to  re-examine this clause
22. 9.3   “ No , there is  no any HELL SITUATION as it is subject to SELLERS APPROVAL
23. 4.4.2/5.2.6  As mentioned earlier clause 4.4.2 may be deleted  if so deemed fit. 5.2.6 only refers to appeal to Strata Title Board/High court  when required  which is a logical process of Collective sale and as per other clauses of CSA.
24. The situation of  payment in kind is not being envisaged
25. Clauses  8.1.11 and 8.3 specifically provide for sale only at Higher of Reserve Price/ Valuation either by tender or private treaty . I do not see merit in this objection.
26. 26.As it is possible to lower RP only with sellers consent ,obviously an EGM would be required to be called for within the legal time frame available under strata act.
27. 8.1.3 This is a theoretical objection as any Lower price less than RP is subject to Sellers approval and Sellers are not expected to agree to any price  -let alone SC endorsing any such price
28. 8.1.3 (B)  I do not see the validity of this observation of itshometome – apparently the withdrawing seller  is ultimately bound by the eventual outcome if 80% consent is there (barring him)
29. clause 8.1.14  I see no harm in sharing this data.
30. Clause 16.3 This was clarified by solicitors at the EGM on 24.9.2011                                                                         
31. 11.10.11.9 11.21 . Frankly  I am unable to understand the deduction arrived at by itshometome  from these clauses  - these have been clarified  earlier
32. 11- Well, any legal  agreement has to have some covenants / clauses depending on the complexity of transaction and legal provisions  - I would prefer to be guided by my solicitors on these covenants unless I find any thing obviously prejudicial to  my interests as c collective seller .
33. 11.8    We can request the solicitors to amend this clause to exempt  seller(S) disclosure to their  own solicitors
34. 6, 11 .29 and 14.1    I would leave the Solicitors  to explain the rationale of these clauses to SPs but I do note that STRATA ACT provides for indemnity for SC members acting in a  bonafide manner  .
35. 11.27  I would imagine that this clause is required given the nature of the CSA and in any case the key word here is  “ in accordance with this agreement  “ AND “lawfully” SC will request solicitors to amplify. 
36. 11.7.11.8 .11.9 11.10 ,11.21 11.27  - I do not concur  with the inference/Conclusion  drawn by itshometome from reading these clauses some of which have been dealt with individually earlier . SC will request solicitors to clarify.
37. Yes  it is important observation  and  I will leave it to be discussed with SPs/Solicitors at the next SC meeting

As regards the  VIEWS/OPINIONS expressed by itshometome  on:

a)     Incomplete CSA ( This a valid point and already discussed at last EGM)

The next EGM should have the complete CSA.

b)   Units VERSUS All lots of common property – The observations are well  taken, but  it is to be noted that  clauses 1 and 2 make it clear as what is being sold and the    
    “ unit or units “ have to be read in the context of these clauses

c)     Mode of Sale- The fears of itshometome that “any other mode of sale” paves the way for sale AKA round I do not seem to be justified though the solicitors are being requested to clarify as to the legal import/practical implication of these words

d)     Promises and loss of Liberty :   itshometome’s  fears / considers compromise of individual sellers interest  in clauses 11.7. 11.9 11.20 AND 11.21 do not appear justified (in my view) if one reads these clauses fully and in the whole context of the CSA. Of Course, the words” Vote for “ can be amended to “Vote on” .Clause 11.7 refers only to documents

“Incidental “ or required for the “ purpose of this agreement  and not for any or all  document s

Does clause 11.21 deprive Seller(S) of all rights and is it really  “A Knuckeduster clause”.

I Do no think so but  I will leave it to Solicitors to clarify .

e)   Sellers approval :  The Gist of  ‘itshometome’’s extensive arguments on this subject (clauses 8.13, 8.2.1, 8.2.2 ,9.1 ,9.3AND 12.2 )  is that “ SELLERS APPROVAL MUST BE OBTAINED BEFOR SIGNING SALE AND PURCHASE AGREEMENT “                                                    

The Point is STRATA ACT does not require it and Third Schedule clause 4 quoted by her says” interalia  “ that the meeting of subsidiary proprietors must be convened AFTER THE CLOSE OF TENDER /AUCTION  OR SALE COMMITTEE ENTERED INTO A PRIVATE CONTRACT ,

TO PROVIDE INFROMATION ON OFFERS RECEIVED/INFORMATION ON SALE AND PURCHASE AGREEMENT  ‘S TERMS AND CONDITIONS

This section envisages a Sale and Purchase contract prior to convening the meeting  .

 It is not therefore clear  how itshometome claims that this is the perfect point  for  sellers affirm UNLESS the sellers/SC agree  to do so in advance in CSA. 

In my opinion the suggestion of  itshometome may be impractical though the merits of the suggestion are unquestionable . This needs to be discussed with Solicitors /SP s.

f)       The Omnipotent Sale Committee  (4.4to 4.4.13, 9.6,5.2.6 and 8.1.11)

IT MAY NOT BE  PROPER ON MY PART TO COMMENT ON itshometome's OBSERVATIONS ON THESE CLAUSES  AS I AM A MEMBER OF THE SALE COMMITTEE BUT I CAN ASSURE THAT THIS DRAFT IS PREAPRED BY THE SOLICITORS ON  THEIR OWN AND IS NOT  ON DICTATES OF ANY ONE .BE IT SC OR MARKETING AGENT.

Clauses 4.4 and 9.6 were briefly discussed at the last EGM and I would deem it best to discuss these clauses with the Solicitors  in the SC meeting   convened  for discussing CSA.

g)       Lowering of RP 8.1.3

I do not concur with the view that this clause enables SC to  sign  “illegal agreements with “topups”  for some units . Of course it is agreed that we need to have a fair and transparent  mechanism for signing any supplemental agreement with stated purposes with sellers approval ,where necessary .

SC will seek Solicitors opinion on this clause .

h)     2.11 .2.12 and 8.1.14 ( Funny clauses)

It may not be fair to brand these clauses as “ Funny “. The words “otherwise where they enter “ may refer to a situation where they wish to sign  ON THEIR OWN VOLITION while STB/HC proceedings are on . Solicitors will be requested to elaborate .

Clause 8.1.4 : Why it should be presumed  that the lawyers will be “tardy “ here ? one can Ask “ why not in all situations” – Does one really think any lawyer will be so negligent?

i)      DREADFUL SALE TERM CONTINGENCIES  -9.1 to 9.6

While  I do not think all these clauses  require removal , there is  a case , for relook at clauses 9.2 and 9.4 ( as has been commented earlier )

The Solicitors will be requested to look into these clauses again .

Pl.note clause 9.3 requires sellers approval.                                             

j)      Dreadful Covenants and Agreements.11.5 AND 11.6

 My comment is : Should not we have deterrent clauses and conditions to avoid willful default or negligence in any collective sale ? Even in individual purchase and sale  , indemnities and recovery of costs of enforcement are provided.

The solicitors will be requested to clarify further.

k)       Missing data-   Well noted  and will  be incorporated in Final draft CSA .

 

VASAN

Note : Though I am a member of the Sale Committee , my above reply /observations to the various queries/observations of  itshometome are my own and are not necessarily the formal views/response of SC . My views or replies are based  on my understanding of law and errors and omissions  in interpretations of legal provisions are excepted.

2nd Draft CSA

Owners received the 2nd Draft of the CSA today - just 4 days before the EGM.

An incomplete / messy document:

• no Reserve Price
• Schedule 1: Owners and units:  blank
• Schedule 2: Method of Apportionment: blank
• Schedule 3: terms of Appointment of Solicitors: blank
• Schedule 5: members of the Sale Committee: blank
• Schedule 6: The Representatives;blank

There was an 'URGENT NOTICE TO ALL SPS FROM TAMPINES COURT SALE COMMITTEE ' dated 09 September, but we only received it on the 20th. Not so urgent afterall?

So, the strata area for individual units is up in the air.  I would have thought the marketing agent/solicitor could have and should have made a better effort at this, seeing as owners cannot decide on important matters until they are sure of their facts.  The very least they could have done is print out  the  list of all units and their strata area as ascertained by them from the SLA in Schedule 1, and owners could then be asked to check for any discrepancy in their lot. As it is, we do not know what figures the MA has and so it may all be just a pointless exercise.

If there is a discrepancy then sure, call your solicitor ( not the en bloc guy, he has said he will NOT deal with individual SPs and their questions) and have him do the checking for you, that is probably the safest thing to do, but if not then this is what I did in less than 15 minutes.

First of all, I know my strata area is 156 sqm because my previous owner had bought 1m of recess area before privatisation and so it is reflected in the deeds. But just for fun I dug around to see if it could be confirmed somehow.

My first stop was INLIS ( Integrated Land Information Service) here

I clicked on the 'Property Ownership Information' for $5.25 in the top left hand column.

I just filled in my unit's information on the top right column and clicked go

I bought the info using my Visa.

It was accessible immediately and I downloaded and printed out a copy. The 3 page pdf showed  Mukim Lot No, property address, Lot area, tenure, lease duration, Proprietor names, IC numbers and  citizenship.

It tallied with my deeds.

The recess area was bought from the HDB, so they too would have a record. Now in 2003, The HDB sent a letter to someone called Mr G. informing the MCST that 305 units in total had bought over all or part of the recess area. They enclosed a list of units under annex A - so I presume the MCST office would still have that list on it's files. I only have the page with my unit number on it.

Waiting for Godot

We have been reassured by many pro-enblocers pushig this sale that the 'New Rules' will be followed, that the amendments to the LTSA are enough to ensure that there will be no repeat of the disastrous sale attempt in round 1. We are to  put our faith in the  mechanisms that failed us so badly before.

Ask them to quote which new rules they are referring to, and you will most likely get a blank stare or expert waffle of some sort.  It is well to take a re-look at the  Land Titles Strata Act to remind ourselves of these new 'safeguards', and see whether in fact the CSA will follow exactly the statutory law, or change the wording to something entirely different.

On the matter of mode of sale, we are told in the Third Schedule that:

Collective sale by public tender or auction
11. —(1) The collective sale of all lots and common property in a strata title plan shall be launched for sale only by way of public tender or public auction.

(2) A valuation report by an independent valuer on the value of the development as at the date of the close of the public tender or public auction shall be obtained by the collective sale committee on the date of the close of the public tender or public auction.

(3) Notwithstanding sub-paragraph (1), the collective sale committee may, within 10 weeks from the close of the public tender or public auction, enter into a private contract with a purchaser for the sale of all the lots and common property in a strata title plan. 

There is no mention of an Expression of Interest (EOI) because this method caused so much aggravation and unhappiness in past collective sales. The new rules seek to put order where chaos reigned before. There is no leeway for any other mode of sale, either.  Take note of small words, such as 'shall'  and 'only' as they are not the same as, for example, 'may' and  'any other'. 

Remember that.

On the matter of Rescission of Agreement (ie, backing out once you have signed) we are told in the First Schedule that:

5. The collective sale agreement shall be accompanied by a notice, in the prescribed form, that may be used by the subsidiary proprietor to rescind his agreement to be a party to the collective sale agreement.

6. A subsidiary proprietor may rescind his agreement to be a party to the collective sale agreement by serving a notice of rescission referred to in paragraph 5 within the cooling-off period which shall be a period of 5 days (excluding any day which is a Saturday, Sunday or public holiday) after the day on which the collective sale agreement was signed by him.

7. The notice of rescission shall be signed by the subsidiary proprietor and shall be served personally on the advocate and solicitor appointed by the collective sale committee before 5 p.m. on the last day of the cooling-off period.

8. A subsidiary proprietor shall not be entitled to serve a notice of rescission more than once for the same collective sale agreement.

Once only,  so if you use up your solitary chance at the beginning, during the cooling off period, you can not rescind again later in the process,  Also, there is no mention that  the owner who rescinds has to give up any of his rights along with the rescission. If 'rescission' has the same legal meaning as 'withdrawing' from the agreement for any other reason , then watch out, because you may find yourself in a catch 22 situation and unable to withdraw.

Remember that

SC Meeting : 20 Sep 2011

They should consider postponing the CSA EGM as they have failed to provide owners with a draft CSA in reasonable time.

SC Minutes 8 (Edited)

CSA botch-up or hardball tactics?

 EGM 3 in  4 Days

• No update on the Sale Committee website
• No apology for missing draft CSA
• No explanation for said missing CSA
• No reassurance of draft CSA in near future
• No answer to request for copy of draft CSA

This is what the management office has to say:-

By the BMSM Act, the managing agent has to give 2 weeks notice to all owners when holding an EGM/AGM. Owners received the Notice on Friday 9th Sept as the EGM is set for Sat 24 Sept. The managing agent received an email shortly before sending out the Notice saying not to attach the CSA as 2 documents were missing. Until the managing agent receives the 2 missing documents the CSA distribution has been put on hold.

So, we shall eventually receive the draft CSA, but the question is, when and will it be too late? Anything less than a week and the EGM should be postponed. Owners will have insufficient  time to read the document fully and/or show it to their legal advisers.

I am beginning to wonder if the delay is in fact intentional.  Are we being played for chumps? There is absolutely no reason why the main body of the CSA could not have been sent along with the Notice and the two missing 'documents' attached later as an addendum. This the draft CSA afterall, not the real deal.

EGM No 3

Notice for the EGM No 3 to be held on Sat 24 Sept has been sent out and I received my copy today. This EGM is mainly to resolve and approve the terms and conditions of the Collective Sale Agreement..... 

ONLY NO DRAFT CSA IS ATTACHED

My previous post on the Agenda here 

Subsidiary Proprietors have not been given a copy of the draft CSA for their perusal before the EGM. I believe since the CSA was mentioned in the Notice and is the main focus of the meeting, it should have been attached as a supporting document.

If we do not receive the CSA  soon, and I mean very soon, then this hardball tactic at bulldozing the CSA through the mandatory EGM before  owners can have time to peruse and contemplate on the document is not fair. There are many, many owners in the estate whose English is not strong enough to take in pages of information at one sitting, never mind asking relevant questions. I have read this draft CSA, and believe me it is a horror to behold.  

SC Meeting: 10 Aug 2011 @ KFC

SC Minutes 7 (Edited)

'Emergency Meeting' at KFC .... on the morning of the 10th of August; I believe this to be a typo error, it should be Sat 27 Aug (unconfirmed).

.

Anyway, my suspicion that the worst of the sale committee members (whose election should have been voided due to her gross non-disclosure) had somehow been removed was right. Her name was  absent from the last minutes. Two members have 'resigned due to personal reasons'. There are 4 new owners left with 10 declared properties between them.

The SC noted that the amended CSA has been received from the Lawyers

I doubt if there have been any substantial changes, and the 2 week notice before the next EGM should be ample time to reappraise the text.

The SC noted the Solicitors advice that they would not be able to respond directly to  the Letters/Notice of Motion  sent by SPs.  since they are engaged by the SC, and it would not be possible for them to deal with issues raised by individual SP(s).

So you see, these lawyers are not YOUR lawyers, they are not acting on YOUR behalf and even though you will eventually pay them thousands of dollars in fees, they will not answer a single question you pose, unless you are thinking about signing the CSA that is.  This should not deter you from writing to them however, and maybe even start CC-ing your emails to the STB or even the Ministry of Law...

.

the individual SP(s) may take up with SC or at the EGM , and SC to advise SP accordingly  the SC are in the dark, too, and cannot answer the kind of legal questions I may wish to ask. At the EGM, there may not be enough time given over to Q&A and with no stationary microphone it is all too easy to ignore some SPs raised hands. I expect the en bloc lawyer and marketing agent to talk for a very long time, eating up as much time as possible before allowing owners a limited chance to speak.

The issue of strata area was discussed and pending re-verification of the exact strata area 

which may take some time, it was agreed to seek postponement of the EGM by few days from the scheduled date of 17.09.2011

So, my accusation about the marketing agent using the wrong total strata area at the last EGM didn't fall on deaf ears.   It is well to make them double check and produce the Singapore Land Authority confirmation of total strata area, with the breakdown per unit because either:-

• the current marketing agent is wrong, in which case the proposed sales proceeds  on a per unit basis would have to be adjusted downwards, or
• the last set of figures given in the affidivat at the STB was erroneous in which case some owners would have received more than their fair share of the sales proceeds. 

I have found just a single 1m discrepancy in our last en bloc lawyers figures. It rests on this marketing agent to prove their figures are correct (which I do not believe they are).

And what about their basis for using only  85% efficiency when it should be 95% at least?

I have handed the SC the formal valuations under affidavit at the STB for verification; the Bonus GFA is added to the GFA when computing the residual land value.

The EGM has been postponed to Sat 24 Sept

DC Rates Sept 2011

September Revision of Development Charge rates: URA Media Release
Tampines Court is Sector 98, Use Group B2: DC Rate: $3150

In the light of the change in DC rate, the marketing agent should resubmit their calculations for the Differential Premium and Lease Top-up for owners to view.

The change should not reflect in a lower reserve price as they have already lopped off 10% efficiency in their calculations and they should not use this change as an excuse to lower the RP even further. 

Sept Media

Average mass market home prices hit $1million - 23 Sep 2011
Developers to hold back on future land bids - 20 Sep 2011
Private housing market continues to surprise - 
Oversupply risks in OCR - 
Parkway View up for sale with $81m price tag - 22 Sep 2011
Private property demand not expected to ease up - 19 Sep 2011
Worry more about risk levels and less about supply -  16 Sep 2011
Housing demand will remain stable - 14 Sep 2011
Dynasty Garden freehold site up for sale - 6 Sep 2011
Daisy Apartments sold en bloc for $14.62m - 6 Sep 2011
Park West up for en bloc - 6 Sep 2011
Kovan residences sees prices hit $1267 psf - 5 Sep 2011
Hoi Hup set to buy Whitley Heights for $159m in collective sale - 2 Sep 2011
MND raises devt charges for new building projects   01 Sept 2011