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.