Now that we have an UNDERVALUED RESERVE PRICE, and a clause 8.1.3 that will make the lowering of this already low RP a strong likelihood - it becomes even more imperative that owners can switch to the 'in kind' payment option in order to preserve the equity in their homes. Now 1-for -1 payment need not necessarily be an exact exchange on a square footage basis, Owners should have the flexibility to have a smaller apartment and the remainder in cash on a pro-rata basis. It is for owners to look after their own interests - the forces out there want a cash sale only because it is more controllable and they have a vested interest in seeing it succeed. The CSA takes care to include contingencies that aid the Purchaser. There are no contingencies that protect the Vender.
Look at it as a form of Insurance Policy: To protect ourselves we must insist on this 'in kind' payment option in case things turn ugly and owners are faced with a massive shortfall in a rising market, a forced downgrade or hitherto unknown tricks that may be employed to prize our asset from our hands. How much better it would have been for Waterfront View/Gillman Heights owners had they protected their flanks with this option. They could now be moving into a smaller but brand new Waterfront Waves/The Interlace apartment with the difference in cash. Their new homes would have been pegged to the present day market price and so would have lost no equity. Instead, many are now back where they started 25 years ago; their replacement home is an old HDB with little or no cash in the bank to show for their efforts. Their prime land gone, their share in private property evaporated.
Without an 'in kind' option as an insurance policy, I am afraid this collective sale becomes a high risk roll of the dice. Forget about clause 8.1.14; it is complete garbage. Owners in Gillman and Waterfront were 'invited' and were shocked at the prices of the units offered.
TWICE THE PRICE /HALF THE SIZE.
Not only that, they were treated like dirt.
RE: response from subsidiary proprietor to my post here :
Look at it as a form of Insurance Policy: To protect ourselves we must insist on this 'in kind' payment option in case things turn ugly and owners are faced with a massive shortfall in a rising market, a forced downgrade or hitherto unknown tricks that may be employed to prize our asset from our hands. How much better it would have been for Waterfront View/Gillman Heights owners had they protected their flanks with this option. They could now be moving into a smaller but brand new Waterfront Waves/The Interlace apartment with the difference in cash. Their new homes would have been pegged to the present day market price and so would have lost no equity. Instead, many are now back where they started 25 years ago; their replacement home is an old HDB with little or no cash in the bank to show for their efforts. Their prime land gone, their share in private property evaporated.
Without an 'in kind' option as an insurance policy, I am afraid this collective sale becomes a high risk roll of the dice. Forget about clause 8.1.14; it is complete garbage. Owners in Gillman and Waterfront were 'invited' and were shocked at the prices of the units offered.
TWICE THE PRICE /HALF THE SIZE.
Not only that, they were treated like dirt.
RE: response from subsidiary proprietor to my post here :
Item 24 on my list: By LTSA , payment can be 'in cash or kind or both', yet the CSA only has a cash option.
His response was 'The situation of payment in kind is not being envisaged'
Why has it not been envisaged? What right has the sale committee to casually dismiss a statutory option - a vital option for some owners? Does the SC know how many would want this option? Have they sent out a single survey form on any matter, let alone this one?
The LTSA does not empower the Sale Committee to propose the Terms and Conditions of the CSA. Owners were supposed to vote on those powers at the First EGM under a statutory resolution 'Powers, duties or function of the SC' but were inexplicably denied that right. I note that in 4.4.3 of the draft 2 CSA , the sale committee now seek to empower themselves to propose all the terms and conditions in the Agreement and this is done retroactively. Is the SC proud of the terms it now proposes?
Our Minister of Law Mr. Shanmugam has explicitly stated that owners have the ultimate say and that the sale committee must act in accordance to the owners wishes as stated in the CSA. (Second Reading of the LTSA Amendment Bill, 18 may 2010):
The LTSA does not empower the Sale Committee to propose the Terms and Conditions of the CSA. Owners were supposed to vote on those powers at the First EGM under a statutory resolution 'Powers, duties or function of the SC' but were inexplicably denied that right. I note that in 4.4.3 of the draft 2 CSA , the sale committee now seek to empower themselves to propose all the terms and conditions in the Agreement and this is done retroactively. Is the SC proud of the terms it now proposes?
Our Minister of Law Mr. Shanmugam has explicitly stated that owners have the ultimate say and that the sale committee must act in accordance to the owners wishes as stated in the CSA. (Second Reading of the LTSA Amendment Bill, 18 may 2010):
.
"A Sale Committee has to act in accordance with the mandate specified in its CSA. Thus, it really depends on what mandate is given to the Sale Committee."
"Owners have the ultimate say, they can ask for what they think is necessary for the process, or for them to participate in the process."
"The real point is that owners are free to adopt these measures if they are suitable for their particular circumstances. Thus, the ultimate choice is with the owners themselves on how the sale should be conducted."
The CSA has not yet been approved and so the sale committee does not have the power or sanction of 4.4.3 to propose all the terms and conditions.
I sent in my request to have this 'in kind' option put to the vote in a resolution in the EGM 3, but it was binned. The sale committee has ignored this owner's serious proposal but took care to insert inconsequential resolutions, such as 'allowing free access to the meeting room' instead.
The CSA has not yet been approved and so the sale committee does not have the power or sanction of 4.4.3 to propose all the terms and conditions.
I am resubmitting my request for the '1-for-1 exchange' and 'reaffirmation of sale price' to be included in EGM 4 as resolutions to be voted on by the owners. In Shan's words; I am asking for what I think is necessary for the process. The ultimate choice is with the owners - not me alone, not the sale committee, not the Solicitor and not the marketing agent.
The issue of one for one exchange has been discussed in couple of SC meetings . SC isNOT proposing this possibiltiy based on these discussions -IT is NOT A DECISION by SC but a proposition and it is finally left to SPs decide on this issue at the EGM when they VOTE on the terms and conditions of CSA .Surely any SP is entitled to give a notice of motion to have thisoption of 1 for 1 exchange included in the CSA when EGM proper is being convened to consider and approve the CSA (CSA adoption was withdrawn from the agenda of last EGM)
ReplyDeleteSrinivasan
I have done so, so now let the owners decide on the two most important aspects of the entire process:
ReplyDelete1) Two options for mode of payment and
2) Reaffirmation of sale price by 80% Sellers before signing the SPA.
With these 2 in place, we can all sleep easier in our beds.
The 1 for 1 option is like a life insurance. It should be in the CSA so as to protect the SP, in case the price is lower than the reserved price(note that the CSA caters to the signing of supplementary CSA for a price lower than the reserved price).
ReplyDeleteTake note that there are a number of SPs who like to stay in Tampines Court, and we do not like to have our flats taken away at a low price and have to buy it from the developer at a much higher price. We do like like to end up like some-ex Bedok Reservoir SPs.
potential hot potatoes here...
ReplyDelete1) 1-1 exchange will turn off developers who do not agree to such terms. There are just too many variables and will probably reduce the attractiveness of the enbloc.
2) Reaffirmation by 80%... lol... pls respect the 80% who have signed the CSA. Will developers bid for a land that needs to be re-affirmed? this make a mockery of the RP.
If I signed the CSA in Dec 2011, and the sale was in June 2013 ... I would want to be consulted before the contract was signed. Many things can happen in the meantime and it would be foolish to repeat what happened in round 1 in this and many, many other estates. The RP does not hold up for 18 to 24 months and if it is a 'mockery' then the Sellers can do something about it. The 80% have to learn to respect themselves, be smarter, the 1 for 1 is an insurance policy against an incompetent and/or pro-sale-at-any-cost committee. The 80% have to put in contingencies for themselves ..... because no one else will.
ReplyDeleteThe acceptance of the CSA is an important landmark. If the option of 1 for 1 is not there, it means that those who think that the reserve price is too low to match the price of buying replacment units will probably be very unhappy with the CSA. They have 2 options:-
ReplyDelete1. To accept their faith
2. To rise up to the challenge,and light a thousand fire that will make the SC feel the heat.
In War, it is better to attack than defend. In the first round of enbloc, the minority started very late, when the signatures are about 75%.
This time around, the acceptance of the CSA is the D-Day for the those who care to object.
We do not want to end up like ex Bedok Reservoir residents.
Reply to "potential hot Potatoes"
ReplyDeleteIt is better to have potential hot potatoes then "still born". Without the option 1 for 1, there will potentially be a battle for/against the signature of the CSA. The facts are:-
1. The majoirty of SC are from a list proposed by ERA agent
2. The MA is ERA
3. This is 2nd Enbloc
4. Reserve Price too low: 1st Enbloc : 66% premium. 2nd Enbloc : 46 % premium over last price.
5. Potential lowering of RP
6. MA : Honey ,I strunk Tampines Court by 10%
7. MA : Cover Up Strinkage in last meeting
8. Attendance of AGM: low %
9. Payment in Kind : endorse by Minster of Law
10. SC not protecting interest of Minority.
11. Never try never know.
None of the successful enblocs thus far with > 100 owners ever had a 1 - 1 option. They managed to get 80% based on RP and CSA terms. 1-1 will only create obstacles and not make it less attractive to developers.
ReplyDeleteAsk your lawyers to explain.
I was talking to a SC member. The person was wondering why the MA is dead against 1-4-1. Is it because the deed was concluded sometime ago? Especially the auspicious RP value that begin with a 8.
ReplyDeleteWith 1-4-1, the development has another variable to plug into his spreadsheet! He knows that by varying the final sale purchase, he would probably know what % of the SP will take the option. For example, if he set the price at $X, say 20% will take the option. If he is only tolerating 0% option taker, he can increase the bid price, so that the sale price is attractive even to the most stubborn SPs.
In short, the option 1-4-1 is benefical to all SPs, not just the minority.
With option 1-4-1 in the CSA, Developers have to
a. Outbid each another
b. Bid Best Perceived Market Price
If MA is telling you that 1-4-1 option is bad, he is not giving you the correct picture (by the way, since when is the MA giving us a true picture). He is playing on your fear that the sale will not go thru.
Mind you, without 1-4-1 option, there might not even be a sale!
In the next EGM , I would like the SC to present the advantages and disadvantages of the option 1-4-1 so that all SPs understood the 1-4-1 option. During this presentation, we would like the MA to be excuse from the scene. If the option is needed to be decided by vote, the SPs must have all presentation material 2 weeks before the EGM, so that they can read and ponder on the matter.
The MA is there to market TC, they are paid handsomely for it. If they cant do, they can always resign, just that the rumour that they threaten to resign.
The 1-4-1 is definitely a positive option for the SPs. If there are requests from SPs’ the SC has no right to reject them. The SC sole responsibility is to represent the SPs’ and not seen to be for its own selfish end. (I am saying this because I am very uncomfortable with the composition of the SC members). SC should not be there to argue what is or not possible. Ultimately the buyers/developers will decide if they want to bid for it. The MA & developers are definitely very shrewd business people that we all know. So Leave that juggling to them but do not let them eat you up. So make sure our demand for 1-4-1 is there as an additional options.
ReplyDeleteAs I previously said, 1-4-1 should be an option made available.
ReplyDeleteSome one in the exchange of views here says that 1-4-1 will turn away developers.
I will say, too high an RP will turn away developers.
So how about this, let's en-bloc this place for $1.2mil each, all developers will bid!!!!
- you getting my drift?
Meaning that the MA's goal is to get developer to buy...
What do the Owners Want? Isn't that's what the MA should do?
Question, is the Marketing Agent (MA) working for TC owners or Developers?
Are we paying the MA or the Developer?
If we are the pay master, isn't the MA suppose to take instructions from us?
All SC need is to learn how URA put its land out for tender. IT is well known that every exercise attracts many bids and suprisingly are way above reserve price. So what is at play?
ReplyDeleteThe trick is simple, URA don,t use external marketing agency at all. They market their land themselves and that help avoid connivance and corruption. Bidders have no ideas what their competitors will bid and tend to bid high to secure the tender.
In the first place why did'nt we follow URA's example and do it ourselves with our fellow professionls instead of relying on those
property agents.