Back in the saddle

Well, here's a turn-up for the books - the marketing agent has decided to continue it's involvement with the collective sale of Tampines Court after all.

The Chairman of the SC sent a begging letter to Huttons and after 'discussion with the various stakeholders on their continued involvement' they replied in the positive. Who might those stakeholders be, I wonder? Are they merely referring to themselves or someone else?

Perhaps, after thinking about it long and hard, they realised it might not be good for their enbloc credentials to be known as quitters in the field, liable to give up half way through. Who would want to hire such a firm? No, better to slug it out half-heartedly to the end.

Anyway, the pain continues. The news will bring cheer to some and a groan of despair to others.

Curtains call

Since we have had no news since 30th Nov concerning the plight of the collective sale attempt, I am assuming it is curtains for enbloc round 3.

How does it end legally, you may ask. Well, according to the LTSA Third Schedule :

Resignation of Marketing Agent

So, it has finally happened. The MA has handed in it's notice. I had an inkling this would happen at the last SC meeting - they were not happy campers at the prospect of a higher RP and were palpably despondent.

So, what is going to happen next? The sale committee should just disband and let the clock reset for another try in 2 years. To continue is madness but they seem to think they can attract another MA to take over at the higher RP. A sheer waste of time an energy - and MCST money. 

What about the lawyers? Didn't they come bundled with Huttons? Will they also resign?

My advice to the SC:

Guys, just bow out with a respectful letter to the 46% of owners, thanking them for their support.

Anonymous said:

I was surprised to discover in MA's resignation letter that Mr Vasan had offered to pay for a valuation report, and Hutton's endorsement of this proposal. This pertinent info was omitted in the minutes.
Hutton's proposal for SC to convene a General Meeting was also not reported.
Has Secretary faithfully reported all that's transpired in CSC Meetings? Has this SC been totally transparent with us?
If this SC wants to continue with this Enbloc please address this issue, Mr Secretary.
Without trust, you will not get the necessary mandate from remaining SPs.


From FB

Minutes of the 16th SC Meeting

First off:

I DID NOT SEE THE OFFICIAL RLV OF THE MARKETING AGENT

I only saw a hand-out by the former SC member Mr, Vasan who was not present at the meeting and who had resigned the day before: 'He (the MA) also presented the RLV table that was presented by Mr Vasan during the 15th CSC"

'They (MA & myself) agreed that all of the factors used in their calculation were basically similar, except one, which had already been discussed during the 15th CSC meeting.'

This is quite true - but the exception was quite a major one.

What awaits us Part 1

I am following another estate (Shunfu Ville) and the goings-on in that collective sale could be duplicated in our estate the way things are going.

Their initial RPº garnered 65% signatures before stalling. They churned out a Supplemental CSA with a higher RP1 and managed to get the extra 15% needed to reach 80% the DAY BEFORE the expiry date. How magical.

They went for a public tender on the strength of the 80% and received no bids.

They then churned out a second Supplemental agreement to lower the reserve price to RP2 and garnered only 35% support. Not happy with this they went for a third Supplemental agreement with a higher RP3 (but lower than the initial RPº). This final RP3 only garnered 55% signatures.

They went for a Public Tender again ... on the strength of the first 80% (RP1) ... and received no bids.
I think they went for a second Public Tender .... and again received no bids.

One more fact: the valuation at close of tender was substantially lower than even the lowest RP2. When the marketing agent is the one calling the shots with regard to recommending/selecting an 'independent'  Valuer - then this will always be the case.

After the failed public tender, a Developer came in with a private bid which equaled the RP3. This offer came with do-or-die conditions attached. The SC held an EOGM to discuss this offer and used the RP3 55% as a stepping stone and managed to persuade a further 25% to sign.

So the SPA was signed and an application made to the STB just days within the 1 year time period. (Though I would argue that the RP2 is a new contract and starts a new 1 yr from date of ... see post here).

Anyway the extra time was not needed as the application was in time from date of first signature of RPº.

This is very worrying.
1) A higher RP is used to bait SPs into signing and this is used to make multiple attempts at a public tender, even after lower supplemental agreements have been entered into.

2) The Developer is obviously privy to the RP as he made an offer equal to the second lowest RP3.

3) No public tender was held to determine if this was the best price for the estate - the tender was for the higher RP1, and so who knows, there could have been other bids if the tender price was set lower.

In other words, the market was tested at that level, and the SC failed to ascertain if this was the BEST price achievable.

Food for Thought

So, do you still think the setting of the reserve price is is as easy as ABC? That all you have to do is take a low individual unit sale and plonk a 50% on to that and voila - the RP is born? Old men and those keen to sell-at-any-price are happy with this simple methodology, but here is a paper from the National University of Singapore which should make your toes curl.

This 2004 NUS/IRAS paper on Option Pricing Framework is still applicable even after the Residential Property Amendments of 2010 -  IF the developer Buyers are fully Singaporean and therefore do not have to redevelop and sell the site within a strict 5 year timeframe. 

Collective Sale flying on Autopilot.

The ex-Vice Chairman, Mr. Vasan, has tendered his resignation from the Sale Committee. 

This is not good news for the collective sale as he was the only SC member with a firm grasp of both the LTSA rules and the importance of doing due diligence on the RLV. There is now no one at the wheel and the collective sale is effectively on auto-pilot. 

Tampines Court owes him a debt of gratitude for getting this far. Perhaps he'll share with us his reasons for resigning, perhaps not. We shall see.

Hold your Horses

I attended the SC meeting today (5 Nov 2016) and had a chat with those present.

I didn't get to see the RLV (I forgot to ask! Typical!) but things went cordially enough and for me, that is quite a change.

Vasan was not there, in fact no one was there except 4 SC members and around 6 to 7 marketing agents.

I am reluctant to say more about the meeting as on reflection, the sale of 560 homes in the hands of these 4 SC members is a scary thing.   I was under the impression that the RP had been raised but apparently not. The FB page announcing the increase was premature and the MA has not agreed to anything yet.  They are holding off on signing until the matter is finalised. I did not stay for the whole of the meeting so cannot attest to what transpired after.

So, hold your horses on the revised RP..... it is still being discussed and nothing has been confirmed.

The RP stands at $1.32m until further notice.

I may be entirely wrong, but if push comes to shove, I sensed that the MA just might quit .

Tampines Court Sales Chart (2002-May 2017)

Updated 29 May 2017

In May 2013, a unit sold for $1.25M. This is the TC record. 

An enbloc price should be considerably higher than the highest individual transacted price because  land is priced differently to units. Apples & oranges.

Florence Regency starting a Collective Sale badly

Florence Regency (formally N7 Hougang Ave 2) was privatised in Jan 2014. It is an ex-HUDC estate with 336 units and they have a collective-sale-from-hell going on there at the moment. 

Their annual AGM was held yesterday and suspended half way through to switch to the first Collective Sale EOGM for the purpose of electing a sale committee. They decided to do this in June, even though at that time they did not have the requisite 20%.

Perhaps they had the requisite 20% by Oct BUT they have flouted the rules and undermined the safety measures set out in the LTSA.

The Second Schedule is dedicated to holding enbloc meetings - it  is a legal document and cannot be ignored. The 20% requisition is a must and the meeting cannot start with less than the 30% Quorum reached within a strict 1 hour.  This 30% is HIGHER than the quorum of a regular AGM, which is set at 20%, the importance of which cannot be underestimated. The Collective Sale EOGMs have a HIGHER hurdle to pass. Even if 20% is not reached at a regular AGM, the meeting can proceed regardless. With a Collective Sale EOGM, the meeting cannot proceed without the 30% present or by proxy and and the collective sale attempt is over.

Was the Quorum reached? Was it even checked? You cannot piggyback on the quorum of the AGM - you cannot assume that those at the AGM are going to stay for the EOGM - the two meetings cannot be morphed into one because it weakens the safeguards against abuse.
So, was the quorum ascertained separately?

The Second Schedule cannot be sidelined as if it didn't matter - it seems that this EOGM may in fact be totally invalid.

The incoming MC (of which I believe consist of old and new members) should put an end to this farce and refuse to recognise the newly elected SC. No further EOGMs should be held in their name and the MA should be made to pay for the erroneously held EOGM... before sacking them.

What a mess.

SC Meeting No.15

*Updated 5 Nov

RP revised to motivate SPs to sign.
Completely divorced from the value of the land.

Most SPs were not concerned about the technical details of how the RP was calculated, rather they cared only for the amount that they would get by the collective sale.  

The few SPs who have expressed interest in reviewing the technical details have only been offered a visual glance and so only the sale committee can do 'due diligence' on the figures. I am not confident in the SCs ability do do so when one of the exco members does not even have a grasp of the correct age of the estate. Decisions as to the accuracy of the calculations seem to be taken on first sight - with no independent verification done by the members themselves - during the meetings. With all due respect, calculations need spreadsheet analysis not eyeball evaluation. 

The Sale Committee members are first and foremost SPs in the estate. Since they have access to the RLV then we all should have the same. We are all equal and favourtism cannot be shown to anyone- not even the sale committee. We all should have the RLV in our email boxes if so expressed.

We will be paying this MA over $7 Million, they are under our collective employ, I don't want to pay for this shabby service.

Can't handle the heat

The SC has deleted dozens comments on their FB page as things got too hot for them there, all those SPs pointing out their mistakes was quite distressing for them. They also deleted their own SC member comments as one in particular was damaging their reputation. He didn't even know the correct age of the estate. Anyway, I shall miss him if he has been banned from making further comments on FB. The medium is too volatile for loose canons like himself.

Not only have they deleted the negative comments, they have also deleted

• A ton of posts and comments
• Mr Vasan's letter/SC Response and all the ensuing brouhaha 

Shunfu Ville Going to High Court

Update: 23 Oct 2016

I heard on the grapevine that one of the objections at least has some merit. Apparently, the LTSA mandated 1 yr from 80% in which to sell the estate had expired without a sale. There was a break (I don't know how long) before a supplementary agreement between a different 80% was signed. So was the collective sale dead and can it be resurrected after the time limit has lapsed? Now it is getting interesting.

http://str.sg/4xRd

Bloopers

So, it has come to this. The Sale Committee must come under closer examination in the light of recent irrational remarks on their FB page. They are making all kinds of statements that have no basis in reality or fact.

RAINTREE GARDENS EX-HUDC SALE

175 Owners to receive about $1.9 million each

Contrary to the Sale Committee claim - that 'the RP was set about 2% lower than the GLS in the region'; there are, in fact, no histirocal residential GLS sites in Potong Pasir. The SC has no way of knowing how the RP of Raintree Gardens was set. We would need to see their RLV.

The SC reveal on their FB page  that the GLS site they are referring to is now called The Poiz (on Meyappa Chettiar Rd sold Aug 2014). I am floored by this.

That GLS was slated as 'commercial and residential' with a GPR of 3.5 and now has 731 units and 88 shops & restaurants. This is not apple to apple. They have shot themselves in the foot again by not doing background checks on the information doled out to them by the MA. The Poiz is right next to the MRT station and no doubt will be linked underground the way Bedok Residences is just a lift down to the Bedok MRT station. Raintree Gardens therefore aimed very high if  they compared themselves to this prime site! Excellent job by that smart and gutsy SC.

What does this mean for us? Instead of looking at the poor Tampines Ave 10 GLS - perhaps they should be measuring our RP against  mixed commercial & residential properties beside an MRT station, too.  That should up the RP considerably! If it's good enough for Potong Pasir then it's good enough for us.

At the end of the day.. all this talk using the comparative method means nothing because all we need to see is the RLV.  Developers do not use the comparative method, so neither should we.

The RP is set only by doing a residual land valuation - NOT by linking it to old GLS sales, which serve as a loose indication only. Every site has it's unique set of pros and cons. 

WHERE IS THE RLV?

GIVE IT TO US. 

THIS IS OUR ESTATE AND WE DEMAND TO SEE ALL RELEVANT DOCUMENTS WITH REGARD TO THE SETTING OF THE RESERVE PRICE. 

Without this in hand, the SC Committee et al. can collectively go to hell.

Below URA GLS Sites. Figures in RED are my own. GPR is calculated using reverse math where not given

Date of Award	Location	Type of Development Allowed	Lease (years)	Site Area (m2)	Site Area (sqft)	Calcul’d GPR	GFA (m2)	No. of Bids	Successful Tender Price	$psm per GFA or $psm per GPR	$psf ppr	Planning Area
30-Sep-16	Fernvale Road	Residential	99	17,195.9	185,095.1	3.0	51,588	14	$ 287,100,000.00	$ 5,565.25	$‎ 517	Sengkang
1-Jul-16	Martin Place	Residential	99	15,936.1	171,534.8	2.8	44,622	13	$ 595,100,000.00	$ 13,336.47	$‎ 1,239	River Valley
30-May-16	Bukit Batok West Avenue 6	Commercial and Residential	99	14,696.7	158,194.0	3.0	44,091	11	$ 301,160,000.00	$ 6,830.42	$‎ 635	Bukit Batok
13-Apr-16	Jalan Kandis	Residential	99	7,045.6	75,838.2	1.4	9,864	9	$ 51,070,228.00	$ 5,177.44	$‎ 481	Sembawang
26-Feb-16	New Upper Changi Road / Bedok South Avenue 3	Residential	99	24,394.0	262,574.8	2.0	51,228	8	$ 419,380,000.00	$ 8,186.54	$‎ 799	Bedok
18-Jan-16	Siglap Road	Residential	99	19,309.6	207,846.8	3.5	67,584	8	$ 624,180,000.00	$ 9,235.62	$‎ 858	Bedok
11-Dec-15	Clementi Avenue 1	Residential	99	13,037.8	140,337.7	3.5	45,633	6	$ 302,100,000.00	$ 6,620.21	$‎ 615	Clementi
17-Nov-15	Alexandra View	Residential with Commercial at 1st Storey	99	8,398.5	90,400.7	4.9	41,153	10	$ 376,880,000.00	$ 9,158.02	$‎ 851	Bukit Merah
11-Nov-15	Lorong Lew Lian	Residential	99	14,001.5	150,710.9	3.0	42,005	11	$ 321,000,000.00	$ 7,641.95	$‎ 710	Serangoon
13-Aug-15	West Coast Vale	Residential	99	18,908.7	203,531.6	2.8	52,945	6	$ 314,100,000.00	$ 5,932.57	$‎ 551	Clementi
4-May-15	Tampines Avenue 10	Residential	99	15,660.4	168,567.1	2.8	43,850	12	$ 227,780,000.00	$ 5,194.53	$‎ 483	Tampines
1-Apr-15	Paya Lebar Road / Sims Avenue	Commercial	99	39,230.7	422,275.7	4.2	164,769	6	$ 1,671,688,888.00	$ 10,145.65	$‎ 943	Geylang
31-Mar-15	Sturdee Road	Residential	99	6,111.5	65,783.6	3.5	21,391	16	$ 181,189,000.00	$ 8,470.34	$‎ 787	Kallang
12-Mar-15	Jurong West Street 41	Residential	99	17,803.5	191,635.3	2.8	49,850	9	$ 338,118,000.00	$ 6,782.71	$‎ 630	Jurong West
28-Nov-14	Upper Serangoon Road	Residential with Commercial at 1st Storey	99	10,097.1	108,684.3	3.0	30,292	11	$ 276,774,000.00	$ 9,136.87	$‎ 849	Hougang
13-Oct-14	Lorong Puntong	Residential	99	10,502.8	113,051.2	2.1	22,056	18	$ 173,570,000.00	$ 7,869.51	$‎ 731	Bishan
28-Aug-14	Gambas Crescent / Sembawang Avenue	Business 1	30	15,665.0	168,616.7	2.5	NA	4	$ 35,000,000.00	$ 893.71	$‎ 83	Sembawang
20-Aug-14	Meyappa Chettiar Road	Commercial and Residential	99	16,149.4	173,830.7	3.5	56,523	15	$ 471,618,000.00	$ 8,343.82	$‎ 775	Toa Payoh
8-Aug-14	Fernvale Road	Residential	99	16,603.9	178,722.9	3.0	49,812	4	$ 234,933,000.00	$ 4,716.39	$‎ 438	Sengkang
8-Aug-14	Fernvale Road	Residential	99	17,413.9	187,441.7	3.0	52,242	3	$ 252,122,000.00	$ 4,826.04	$‎ 448	Sengkang
4-Jul-14	Woodlands Avenue 12	Business 1 with an integrated Heavy Vehicle Park	30	39,229.1	422,258.5	2.5	NA	5	$ 76,900,000.00	$ 784.11	$‎ 73	Woodlands
21-Apr-14	Prince Charles Crescent	Residential	99	24,964.3	268,713.5	2.1	52,426	7	$ 463,100,000.00	$ 8,833.40	$‎ 821	Bukit Merah
17-Apr-14	Woodlands Square	Commercial	99	18,568.8	199,872.9	3.5	64,991	8	$ 633,999,000.00	$ 9,755.18	$‎ 906	Woodlands
13-Mar-14	Yishun Avenue 9 / Yishun Avenue 6	Residential	99	20,553.8	221,239.3	2.8	57,551	5	$ 278,800,000.00	$ 4,844.40	$‎ 450	Yishun
24-Jan-14	Geylang East Avenue 1	Residential	99	6,238.1	67,146.3	2.8	17,467	16	$ 145,890,000.00	$ 8,352.32	$‎ 776	Geylang
15-Jan-14	Upper Paya Lebar Road	Residential	99	20,077.6	216,113.5	2.8	56,218	7	$ 392,300,000.00	$ 6,978.19	$‎ 648	Serangoon