Stakeholders and interest

Just who is the stakeholder and who keeps the interest on the 10% deposit paid by the buyer?

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Well, the enbloc lawyer is the stakeholder, and that is common practice.

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On the matter of who keeps the substantial interest, well, that is not set in stone. The Law Society's stand on the matter is that the interest on stakeholders funds usually belongs to the stakeholder - but because we are talking hundreds of thousands of dollars, perhaps even millions, this is not automatically the case in enblocs. The enbloc lawyer should canvass the issue with the SC; they can't just quietly pocket the money. I have no doubt that our enbloc lawyer did just that (legally it's called 'excess of caution' I believe), but I take issue with the fact that the SC did not then canvass the views of the owners! The Sale Committee, in their wisdom and without consulting the owners, contractually signed this sum away to the enbloc lawyer. Mind you, when they did this (way back in 2006), they hadn't even been elected / ratified by any of the owners, did they then have the legal right to do so?

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$405,000,000

40,500,000 = 10%

3% interest/yr = $1,215,000

Couple lose fight on collective sale

Couple lose fight on collective sale

July 28, 2007

The couple holding out against the collective sale of Waterfront View lost the fight yesterday when the Strata Titles Board (STB) ruled against them in what is regarded as a landmark decision.
Mr Yeo Loo Keng and his wife Cheryl Lim were the only unit owners – out of 583 – who had fought the sale to the end.

They insisted they would make a loss of $106,244, which was part of their CPF principal amount and accrued interest owed to their CPF accounts.

However, the STB ruled that this was not considered a financial loss, as the CPF Board has said if the net proceeds of the sale after repaying the bank loan are less than the outstanding CPF money owed, the couple do not need to make up this shortfall.

This is believed to be the first time the STB has had to decide if CPF money is considered a financial loss in the sale of residential property.

The STB also said, for the first time, that the conversion fee to a private estate – in this case, $19,535 – is allowed as a loss.

Said Dr Kevin Tan, a member of the Waterfront View sale committee who is also a former law professor: ‘This is a landmark case as important issues were brought up that were never before canvassed in court.’

Lawyer Leong Yung Chang from Veritas Law Corporation, who represented the couple, said the ruling ‘will affect a lot of people in the future’.

A disappointed Mr Yeo said: ‘CPF might say we do not need to make up the shortfall, but it is our money being written off in the end, as I’m being forced to sell.’

He added: ‘Future home owners will have to think very carefully before deciding on an en-bloc sale.’
Located in Bedok Reservoir Road, the former HUDC estate is a 99-year leasehold property built in 1984 and privatised in 2002.

It was sold for $385 million last May to FCL Peak, a joint venture between Frasers Centrepoint and Far East Organization.

The couple bought their 14th-floor, 1,711 sq ft apartment 12 years ago for $515,000.

While each of the 583 unit owners will be paid about $660,000 from the sale, Mr Yeo argued that it was not enough to pay off his bank loan of $342,844 and CPF principal amount and interest of $407,599, which makes a total of $750,443.

Although Mr Yeo lost the case, STB deputy president Alfonso Ang pointed out that the report on the proposed method of distribution of sale proceeds filed by the sale committee ‘fell short of the high standard expected especially when involving a project of this size’.

Under the committee’s proposal, the total sale will be distributed evenly among all units regardless of storey or size – an issue Mr Yeo contended with, as he paid a premium for a high-floor unit with a reservoir view.

Mr Ow Yong Thian Soo of Lee & Lee, who represented the sale committee, said he respected the STB’s decisions and thought they were important and fair.

Mr Yeo has 28 days to appeal to the High Court, failing which it will take about three months for the sale of Waterfront View to be completed.

He is mulling over whether to lodge an appeal.

Another resident, Mr David Govinden, told The Straits Times the STB’s ruling had brought ‘tremendous relief’ to other residents who had already committed to other properties.

‘I do sympathise with Mr Yeo,’ said the 57-year-old insurance agent. ‘But at the end of the day, we have to go with the majority vote.’
Source : Straits Times – 6 Feb 2007

Bid to stop Waterfront View en bloc sale fails

August 1, 2007
The bid by minority owners of Waterfront View to stop the Bedok estate from being sold en bloc failed in the High Court yesterday.
The owners Yeo Loo Keng and his wife opposed the sale saying they will suffer financial losses to their CPF accounts, because the net proceeds are insufficient to fully repay the outstanding bank loan and fully return CPF monies with drawn to buy the property.
The couple bought their apartment 12 years ago for $515,000 and will be paid about $660,400 from the sale but argued that that was not enough. They said they have to pay off a bank loan of $342,844 plus CPF principal amount and interest of $407,599, which makes a total of $750,443.
However, the Strata Titles Board (STB) ruled in a landmark decision in February that the principal amount withdrawn from CPF accounts and the accrued interest cannot be taken into account when determining whether a financial loss has been suffered by owners involved in such a sale.
Justice Belinda Ang yesterday dismissed the minority owners’ appeal with costs and upheld the STB’s decision, noting the CPF Board had said the couple will not need to make up for the shortfall if the net proceeds of the sale, after repaying the bank loan, are less than the amount they owe the CPF. The former HUDC estate was sold for $385 million last May.
On whether the Yeos will lodge an appeal, their lawyer Leong Yung Chang from Veritas Law Corp told BT they are ’still looking’ at whether they have ‘further avenue for appeal’.
Source : Business Times – 28 Apr 2007

EOGMs- Do's and Don'ts

YOU, yes you, little subsidiary proprietor man - you DO have the power to take on the sale committee and their entourage at the EOGM and direct the proceedings in a way that you feel is correct. Yes, YOU CAN MAKE A DIFFERENCE.

EOGMs are NOT all in their ballpark. Remember an EOGM is not held by the Sale Committee, enbloc lawyer or property agent - it is convened by the MCST (the Management Committee of your estate). Ever wonder why the pro- enblocers take over the MCST as a pre-requisite to enbloc? Because it is neseccary to their agenda. But all is not lost. They have to follow the BUILDING MAINTENANCE AND STRATA MANAGEMENT ACT 2004 (BMSM Act 2004) (see side table ->). Read the First Schedule in particular with regard to the holding of general meetings.

1)You want your questions to be answered but are not sure if you will get a chance to be heard? Then TABLE YOUR QUESTIONS BEFOREHAND.

What this means is that you write in to the Secretary of the MCST by email and by hand, (no harm in cc-ing it to the REGISTRAR of the STB, too). Include all the questions you wish to be addressed. It is vital that you do this before the Notice of the EOGM has been sent out to the residents - so send them in early so as not to give the MC an excuse to deny your request.

2) You want your questions and answers to be reflected in the minutes of the meeting?

When you stand up at the meeting, give your name and unit number and say "I want my question and answer to be reflected in the minutes of this meeting, please." they will have to comply.

3) You want to add a resolution to be voted on?

Then write in to the Secretary of the MCST with your request before the Notice has been sent out. He has to comply. CC it to the Registrar of the STB, too.

4) You want the minutes to be accurate?

Then TAPE THE EOGM YOURSELF. Buy one of those small tape recorders and edit the official minutes yourself. They may come in handy a year later - at the Strata Titles Board.

In fact- whenever you have a meeting/dialogue session/ house visit from any member of the enbloc team - be sure to have your handy-dandy tape recorder at the ready.

Remember, don't just think it -DO IT!

Post-EOGM

The EOGM was a rowdy, explosive 4 hour long affair. It’s hard to know what came out of it. Tempers flared with both sides shouting at each other. Lawyers, Property Agent and Sale Committee on one side, the angry owners on the other. It was interesting to note that the Sale Committee was flanked by the 2 lawyers, with the Chairman in the back row, mostly out of sight.

The Sale Committee refused to answer questions directly, deferring always to the enbloc lawyer and property agent.

Two Sale Committee members were ineligible to vote (had there been one).

The Property Agent admitted that at no time did he advise the Sale Committee to raise the reserve price.

His reason for not getting a formal reserve price was that it would cost $20,000 and therefore too expensive!
A quick calculation will tell you that $35/-unit is peanuts and owners would have been very willing to pay that amount if it meant getting an up-to-date and accurate assessment of the true value of their homes + common property. Indeed, they might have agreed to a new Valuation being done every 2 months for that price!!

The Lawyers/ Property Agent/ Sale Committee Chairman refused to reveal what the majority percentage was at the time of sale. Why?

The lawyer seemed to claim that the beta sum mentioned in the Sale Committee minutes many moons ago was altogether different from the beta sum that materialized with the purchase price, even though they both served the same function.

One majority owner expressed her disappointment at having put her trust and faith in the SC. It turned out her trust was misplaced and her faith blind.

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The Chairman of the MCST wanted to close the meeting even though there were many tabled questions left unanswered. A quick thinking subsidiary proprietor (SP) pre-empted his action by seeking and obtaining permission from the school official to extend the meeting by 1 hour. This was announced by the SP and so the meeting continued for another hour, by which time most of the important questions had been covered though not necessarily answered satisfactorily.

Even after the EOGM, it seems that what all of them have done collectively is to have contracted for the sale of this sstate with the barest of majorities and in the shortest possible time at the lowest possible price to a buyer who met the informal and never revisited or reviewed 15 month old prospective reserve price after marketing and tendering only one time.

TOP / CSC

According to the Land Titles (Strata) Act

84A – 1
(a): (a) the subsidiary proprietors of the lots with not less than 90% of the share values where less than 10 years have passed since the date of the issue of the latest Temporary Occupation Permit on completion of any building comprised in the strata title plan or, if no Temporary Occupation Permit was issued, the date of the issue of the latest Certificate of Statutory Completion for any building comprised in the strata title plan, whichever is the later;

Tampines Court was privatized on 01 April 2002. Being an ex-HUDC estate, it does not have a TOP certificate. What it does have is a Certificate of Statutory Completion CSC (Full) issued on 14 May 2003.

Technically, therefore, we are only 4 years old and should require 90% majority signatures before proceeding with the enbloc sale.

But will the Strata Titles Board follow the LTSA rules and regulations? Current rules do not allow the STB to rule as invalid that which is valid. Their hands are tied until the new amendments kick in.

But then again, HUDCs have always fallen through the cracks; we have always been a ‘special’ case. When buying our units off the open market, before privatisation, we were forced to take a Bank loan like a private property yet were bound to all the housing ownership rules set by the HDB. All private properties are CPF first charge if bought before 1996. All properties, that is, except HUDC's; which are inexplicably set before 1991.

Rules are rules. Laws are laws. Will the rule of law prevail?

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10 September

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Gilman Heights will be challanging the TOP/CSC at the STB on 23th, 24th Sept and 3rd,4th,5th Oct.

Minton Rise (another HUDC) will follow hot on it's heals on Oct 8th.

Far East, Frasers Centrepoint buy Waterfront View

Far East, Frasers Centrepoint buy Waterfront View

July 20, 2007

In a move seen as reducing the risks of undertaking a massive development, Far East Organization and Frasers Centrepoint have set up their maiden joint venture, which has bagged Waterfront View, a privatised former HUDC estate facing Bedok Reservoir, for $385 million.

The price for the private treaty deal sealed late Tuesday night before the planned tender close for the property this Friday works out to a land price of $241 psf per plot ratio inclusive of an estimated $102.2 million payment to the state for lifting title restriction to enhance the site’s plot ratio, and upgrading the site’s lease from a remaining 78 years to 99 years.

The 809,037 sq ft site can be developed into a new condominium with a whopping gross floor area of over two million sq ft – enough for a massive project with about 1,600 units.

This is the biggest residential collective sale to date in terms of number of units involved (there are 583 units in the existing development), land area as well as dollar quantum, says DTZ Debenham Tie Leung, which brokered the sale.

Far East’s and Frasers Centrepoint’s breakeven cost could be about $450 psf, say analysts. Currently, 99-year condos in the area are going for above $500 psf for units that face the reservoir and below $500 psf for those that don’t.

Depending on how Far East and Frasers Centrepoint come up with their design scheme, about 80 per cent of units in the new development may face the reservoir.

Industry watchers reckon that instead of competing with each other for Waterfront View at the tender, Far East and Frasers Centrepoint figured it made more sense to team up.

This reduces their risks in terms of exposure to such a huge development – and eliminating at least one competitor in the process. The duo are said to have made their offer, good for only a day, late Tuesday afternoon, accompanied by a $19.25 million cheque (for a 5 per cent deposit).

The collective sale agreement signed by Waterfront View’s owners give the sales committee the mandate to negotiate a private treaty deal as long as the reserve price is met. This is understood to have been $370 million.

‘The sales committee could either take the offer on the table, good for only a day – or take the risk of waiting and hoping for a higher offer at the tender that may or may not come,’ said a source.
Waterfront View’s sales committee chairman Matthew Yu said: ‘We are very happy. It’s a good price. The outcome came earlier and is better than we expected.’

DTZ’s director for investment advisory services Tang Wei Leng said: ‘Given the size of the development, there were really only a few parties who have demonstrated genuine interest. The sales committee was decisive, having considered all the options carefully. We are very happy for the owners.’

The $385 million price is above an independent valuation for the property which DTZ did not disclose. Owners controlling 82.33 per cent of share values in Waterfront View have agreed to the collective sale, which will be subject to approval from the Strata Titles Board. Owners of the existing 583 apartments and maisonettes have equal share values, which means they will each receive about $660,377 per unit, which is over 60 per cent more than what the units would fetch if sold individually today.

The site is zoned for residential use with a 2.5 plot ratio.
While the deal involves the maiden tie-up between Far East and Frasers Centrepoint, it is not the first time that the men helming the two organisations have joined hands. Far East is headed by property magnate Ng Teng Fong while Frasers Centrepoint is the property arm of listed Fraser & Neave group, which is now headed by Han Cheng Fong who, during his days as group CEO of the former DBS Land, oversaw many tie-ups with Mr Ng’s Singapore unit Far East and Hong Kong arm Sino Land.

Market watchers are wondering if the two sides will team up for other acquisitions, including the second Somerset site being offered by the state. Far East clinched the first Somerset plot, the former Glutton’s Square site, in January.

Waterfront View is the fifth site Far East has bought here this year. The five total $1.2 billion.
Source : Business Times – 25 May 2006

Waterfront View up for en bloc sale

Waterfront View up for en bloc sale

July 19, 2007
 PRIVATISED HUDC development, Waterfront View in Bedok, is up for collective en bloc sale for an estimated $380 million. If it finds a buyer, it will be the second such development after Far East Organization bought Amberville in Katong for $183 million in January.

Although the amount for the 809,037 sq ft Waterfront View site is high, the price based on the plot ratio of 2.5 is $240 per square foot per plot ratio (psfpr), lower than the $396 psfpr paid for Amberville.

A differential premium of about $102.2 million based on the new plot ratio of 2.5 and upgrading of the lease on the 20-year-old development back to 99 years will be paid by the future developer. At the asking price of $380 million, existing owners could get around $650,000 for their units, or about a 40 per cent premium over current market prices.

Tang Wei Leng, director of Investment Advisory Services at DTZ Debenham Tie Leung, which is also brokering the deal, says that 1,400 condominium units with an average unit size of 1,300 sq ft can be built.

She also estimates that the breakeven cost is about $450 psf. Last week, a 99-year leasehold condo site near Tanah Merah MRT Station was sold to NTUC Choice Homes/Wing Tai for $210 million or $318.50 psfpr.

The breakeven cost was estimated at between $520-530 psf.

Also for sale is a good class bungalow (GCB) site on Astrid Hill for about $13.5 million or about $500 psf. The 26,510 sq ft site cannot be subdivided into smaller plots as GCBs must be a minimum of about 15,000 sq ft.

Consequently, Steven Ming, director and head of Prestige Homes, which is brokering the deal, says such a large site for one house is quite ‘rare’. He also says that there are only 20 GCB plots on Astrid Hill.

There is an old two-storey house on the site but Mr Ming expects the future owner to tear it down. He adds that recent GCB transactions in the nearby Belmont Road area have also gone for about $500 psf. This is less than the asking price of around $600 in neighbourhoods like Jervois Hill.
Source : Business Times – 18 Apr 2006

Enbloc owners' Dilemma

If you're thinking of taking out a term loan to purchase a property now whilst waiting for your enbloc money to be deposited into your account 6 - 9 -12 months down the line - well, think again. The Banks are saying NO to this one.

Please read the following article here

STB appeal process

What to expect if you are an appealing minority owner.
It shall be a learning process and I will amend accordingly as we go along.

• Newspaper advertisement in the Classifieds section under Notices. This Notice will list the names and addresses of all the majority and minority owners (old rules, the new rules have dropped this requirement) it will give the % of majority attained and where to view certain enbloc documents.
• Appealling minority owners have 21 days from the Notice in the newwspapers to put in their appeal to the STB. If you have engaged a lawyer, he will do this for you obviously. if you are appealing on your own, then go to the STB website http://www.mnd.gov.sg/stb/and download FORM 4 (objection filed under S84A/D/E by an individual.
• 7 days: time taken for STB to send a letter to minority owner.
• 2 weeks: time taken to set date for STB mediation

Mediation: 2 days maximum which may not be consecutive.

All appealing minority owners will be summoned on the same day to appear before the STB panel. All minority owners, their lawyers, the enbloc lawyer, the representatives of the sale committee and the 5 STB mediators will begin a process of negotiation. How they go about this depends very much on the personalities of the STB members. There is no set way.

The mediation is closed to the public and is without prejudice.

If no settlement is reached between the appealing minority and the sale committee then either party can request to proceed to the next stage - the STB Hearing

The STB Hearing is the expensive part. You really should get a lawyer for this as it is a real court proceeding and any layman proceeding alone would be at a severe disadvantage. A typical hearing, I believe, lasts around 5 days (which may not be consecutive) and can run into thousands of dollars in lawyer fees, expert witness fees etc. If the appeal is deemed 'frivolous' by the STB, then the appealing minority could be saddled with the whole bill. If it is not frivolous the STB would probably award costs to all SPs; majority and minority including the appealing minority. The costs will be deducted from the sale price. I have attended one of these hearings, I suggest you do, too, if you intend to take it that far.

The hearing is open to the public.

Strata Titles Board

45 Maxwell Road,

#01-11The URA Centre East Wing

Singapore 069118

Tel : 6325 1585/6

Fax: 6325 1607

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Questions

For the sake of clarity and openness, the sale committee will need to address the concerns and questions of the residents of Tampines Court at the upcoming EOGM on 21 July. I have compiled a list which I hope the sale committee will be forthcoming enough to answer clearly at the upcoming EOGM. The list of questions following may not be exhaustive but they are pertinent, and many are as yet unanswered.

1. When was the first formal valuation done?

2. How do you justify the reserve price of $389,719,233.00?

3. Do you have a fresh top-up valuation to the Valuation Report that is the basis of $389,719,233.00? If so why has it not been disclosed? If not then why not?

4. Why didn’t the sale committee get a valuation report in the face of escalating property prices between expression of interest in 2005 and the conditional sale on March 25th 2007? Please explain.

5. Why was the Sale Committee not aware that the Market was rising? Did not the property agent advise the sales committee?

6. Why was no mass meeting held with the subsidiary proprietors after the 80% had been reached and before the property was sold? Would it not have been expedient?

7. How was the committee acting in the best interest of the owners by NOT seeking a higher reserve price or providing for a Top Up Valuation?

9. You had a year to market the property from January 2007, explain why you rushed to sell in March 2007 just when it was obvious that the Market was rising in leaps and bounds?

10. Can minority owners appeal to the STB under section 84A (7) (a) to obtain the Alpha sum?

11. Can minority owners, who will incur a cash outlay to cover their costs and expenses of the enbloc sale and/or the outstanding privatization costs appeal to the STB under section 84A (7) (b) to have those costs covered?

12. Will the CPF agree to allow 5% of sale price not to return to the Member’s Account as it will be withheld from the gross sale price until the unit is vacated?

13. If the STB does not approve of the sale, how will the sale committee pay the professional fees of the enbloc solicitor and the property agent?

14. Was the tender exercise open to scrutiny by the owners?

15. Wasn’t this a ‘lack of transparency’ on the part of the sale committee?

16. Why wasn’t a new open tender called?

17. How do you know you got the highest purchase price when there was no new open tender and no one to bid against the purchaser (2)?

18. Why were the names of the Party A and Party B in the tender exercise and the amount tendered kept secret?

19. Explain why owners were not informed of the tender offers as is the norm in other en bloc sales?

20. If Purchaser (1) organization put in a written offer for $390 million + $10 million for the whole site, why did the sale committee enter into a conditional sale with Purchaser (2) , which is not Purchaser (1).

21. Was the possibility of a Beta sum ever mentioned and recorded in the Minutes in any of your meetings with subsidiary proprietors prior to the sale?

22. Was the Beta sum ever discussed at any of the sale committee meetings prior to the sale? Which set of Minutes?

23. Why wasn’t the Beta sum in the CSA along with the Alpha sum?

24. Why didn’t the sale committee commence collection of the Beta sum after the 40% signatures had been reached, as stated in the minutes of the 4th Sale Committee meeting held 10th April 2006 at the MCST office?

25. By not mentioning the Beta sum directly in the CSA, but adding a catch-all clause that sanctioned the sale committee to do anything they wanted (except lower the reserve price), were the signers unwittingly signing for the Beta sum as well?

EOGM to 'consider the sale'

The EOGM is confirmed for 21 July 2007 and the Notices have been sent out to all owners. The requisition forms will be inspected for irregularities by minority owners on Friday.

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Added as an addendum to the official notice are the questions* tabled by minority owners.

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*The questions are in error and the MCST and SC Chairman have been sent a copy of the amended questions to be included at the EOGM. A copy of these amended questions has been sent to all homes and they will also be handed out to the SP's at the EOGM.

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Having questions tabled at the meeting is a 2 edged sword. It gives the Sale Committee time to think of a suitable response but it also guarantees that the questions will be asked as it is uncertain how much time will be given over to Q & A.
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This is the first and ONLY minuted and recorded meeting of the entire en bloc process and it is imperative that minority owners raise their objections at this meeting.

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Owners should stand up, say their names and

ask that their questions and answers

BE REFLECTED IN THE MINUTES.

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EOGM's come in all shapes and sizes. A recent EOGM at an ex-HUDC estate lasted all of 10 minutes (or so I was told). Since questions have been tabled by minority owners at our EOGm, the SC cannot make a run for it so fast.

ALL MINORITY OWNERS ARE ENCOURAGED TO ATTEND

The Valuation

The valuation issue is perhaps the most contentious issue in the whole en bloc process of Tampines Court

The facts as subsidiary proprietors know them:

The reserve price was not based on a formal valuation.
This was revealed at an un-minuted dialogue session in April 2007. But a figure like $389,719,233.00 could not have been plucked from the air, so who did the initial, estimated valuation?

At the EOGM held in July 2007: their rationalisation was that the STB regulations only stipulate a valuation not more than 3 months old at the time of application to the Board. Owner's expectations and normal practice do not seem to figure at all in their decision making.

The reserve price was not revised upwards in the 15 months prior to the sale.
Where was the option to revise the price upwards in the escalating property market? Other en bloc estates were keeping pace with the bullish market, why not ours? The Property agent obviously treated the RP as a maximum price, rather than the minimum it should have been.

Let’s look at how the reserve price was adjusted in another ex-HUDC estate Farrer Court:

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Farrer Court (ex-HUDC):
DECEMBER 2006 ----------$700 MILLION
JANUARY 2007 -------------$840 MILLION
MARCH 2007 ---------------$1.2 BILLION ---------SOLD!
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TAMPINES COURT (ex-HUDC)
DECEMBER 2005-----------$389,719,233
JANUARY 2007 ------------$389,719,233
MARCH 2007 --------------$389,719,233 ------SOLD for $395 million!
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Note: it is not the actual figure that is important, but the fact the the RP was ADJUSTED UPWARDS reflecting market conditions at the time
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Media Corps Press, Today online.com
"Jones Lang La Salles national director of investments Lim Song Hai said " For the first quarter of 2007, we've seen a rise in reserve prices in the region of about 30% on average"."
Channel News Asia

5% Conundrum

A sale is usually completed about three months after the STB order. 

On completion, the sale proceeds are deposited into the owners' accounts. The S&P should have a clause whereby the owners can stay in their apartments for up to 6 months before they have to vacate. This is the norm. The buyer will usually withhold 5% of the sale proceeds until vacant possession is given.

This is all well and good if, after the bank mortgage and CPF charge have been fully redeemed, there is sufficient cash left over to cover the 5%. Owners run into trouble when the remainder in cash is insufficient or zero* and they then have to scrabble to find extra cash to cover the 5%. Not an easy task if you are also house-hunting and need cash for the down payment / cash-over-valuation for your new home 

This letter was copied from the government's Reach Discussion Corner
Posted : 07/05/2007 4:42 PM (the thread closed July1)

“I am one of the co-owners of Waterfront View. I have just been informed by the lawyers today that CPF does not allow deductions for the various expenses related to the en-bloc sale of the property. We have already incurred CPF losses of close to $90,000.00. On top of that we now have to pay $19,000.00 in cash for the various legal, marketing expenses, compensation fund etc. Under the terms of the sale, $50,000.00 has to be withheld from the sale price until vacant possession is given. In our case, since there is a shortfall where the sale proceeds are fully utilised to pay the loan and CPF refund, we are told to pay the $50,000.00 in cash upon completion date if we cannot vacate the flat. We still have to incur significant cash losses, on top of our CPF losses. We were not aware that CPF will not allow deductions of the various expenses/required payments from the balance sale proceeds before the refund to CPF accounts. I am sure that there are other owners out there who suffer the same fate”

The solution here is to make sure your SC negotiate with the prospective buyer to waive the 5% if an owner suffers such a shortfall.

Of course, if owners find themselves in this situation to begin with then the sale price is definitely too low! No owner should ever walk away from an enforced sale of their homes in a collective sale with no cash to move forward.

Farrer Court Sold

Minority meeting

The en bloc solicitor will be holding a dialogue session this coming Saturday at the CC to ‘try and understand each parties’ concerns and views in the hope of arriving at an amicable resolution to the matter”.

Their invitation is extended not just to the 38 minority owners who have engaged legal represeantation at the upcoming STB appeal, but to all minority owners in the estate. It will be the first time that minority owners will meet apart from the majority group. In such a large estate as ours, it is easy to feel isolated and acting as a lone voice. Minority owners may wish to take the opportunity to see that they are not alone in this matter of opposing the collective sale of Tampines Court.

Update on meeting 01 July
Only 20 out of a possible 100 owners attended the meeting. The meeting itself was very quiet and owners did not share many of their ‘concerns and views’. I suspect they were there, like myself, just to observe and listen.
The sale committee may not have gotten anyone to sign their CSA, but the appealing minority added 2 new members to their group!

Farrer Court Tender

Don't want to move out, don't like the payout

IN APRIL this year, the Gan family made headlines in a big way. Unhappy with the collective sale of their Lincolnsvale condominium in the Newton area, they called up the press to complain that the transaction had gone through 'without their knowledge'.

And subsequently, they said they were the only family left in a building with no lights in the corridor and had demolition workers for new neighbours.

The rest of Singapore watched, some in amusement, as the Gans - who have two teenage sons - declared they were staying put in the 23-year-old development that Sim Lian Land had bought in late 2005 and was now ready to demolish.

Would the Gans have to be physically thrown out with their belongings, kicking and screaming? Would they stand in front of the wrecking ball, daring it to strike?

It never came to that as the Gans were ordered by the court to move out last month.

From refusing to move out to rejecting millions in sales proceeds, the anti-collective sale brigade is becoming increasingly vocal, and they are making sure they are heard in more ways than one.

Apart from challenging the keen sellers at residents' meetings, they also write to the media, the Government, their MPs and neighbours, and even post it on their blogs.

Property consultants have noticed that they are an increasingly knowledgeable bunch and getting more aggressive.

Some of these objectors take on the fight alone, others in a group. Some are open about their objections, some prefer to say no without giving away their identities.

On the whole, collective-sale dissenters tend to be older home owners who have worked for - and established - a comfortable lifestyle. Many are in the so-called upper middle class segment.

Beyond the practical issue of how much a replacement home will cost, these home owners are unhappy for a whole host of more intangible reasons.

Some talk about the loss of community when they are split up from neighbours they have known for years.

Others bemoan the loss of architectural heritage and environmental wastage when relatively young buildings are torn down and rebuilt.

These are the reasons why, somewhere in Ulu Pandan, a group that calls itself Save The Pine Grove is still hard at work even though a first attempt at a collective sale fell through earlier this year.

A new collective-sale initiative has since been launched and the activist group has already written to voice objections about the way it is done, lest it gets in the way of estate maintenance.

For their efforts, they have had one of their letters posted at one of the condominium's lift lobbies, and on it a vaguely threatening scrawl: 'A few ladies from the Save Pine Grove group - Please get out of Pine Grove.'

Another dissenter, 58-year old retiree Ms Brown (not her real name), puts the resistance down to 'attachments' that people have formed with each other and the area in which they live.

Ms Brown, who had bought her unit at The Claymore back in 1989 with the view of spending her retirement in Singapore, has written to the media to voice her unhappiness at the collective- sale bid at her estate.

'It's almost like the 'villages' of London where local communities have their own dry cleaners, restaurants, grocer and so on,' she said.

'Even though we are close to Orchard Road and its many shopping centres, we also patronise small local businesses nearby and have come to know the people who run and work in them. And they, us.'

Dr D, a 39-year-old academic who has lived half his life in Britain, agreed. His Singapore property was also recently sold en bloc.

'It'll mean re-establishing everything again. But my worry will be that in 10 years, we'll need to move again.'

In a twist of irony, some home owners have bonded as they work towards warding off a collective sale, further deepening the feeling of community in their estates.

Madam Lee Woei Shiuan has held a few collective-sale discussions at her Hong Leong Garden Condominium apartment in the West Coast area.

Attendance, she said, is generally good. She serves her guests tea, but some bring fruits, cookies and even bottled mineral water for all the attendees.

'We need to 'unite' the owners so that we can collectively resist the sale application at the Strata Titles Board when the time comes,' said the accountant.

The Hong Leong Garden sale is pending the convening of an extraordinary general meeting before the sale application can be made to the Strata Titles Board. It was sold in March for $131.5 million, a sum some home owners there - who are upset with the entire sale process - now think is too low in today's market.

Madam Lee then decided to talk to her MP about the issue and was surprised when six of her neighbours went along to lend her support.

In other estates, blogging has proved to be a secure yet possibly far-reaching option.

A group of residents at Botanic Gardens View recently created a blog to gather views from dissenters.

'Are you happy with the RP (reserve price)?' asked one of the postings on the blog.

'I urge you to think carefully before the agents do the song and dance and try to persuade you to sign the CSA...!'

But getting the strength in numbers to resist a collective sale is only the beginning.

The collective sale is a multi-step process with plenty of legal twists and turns along the way.

Dissenters may need expert help and lawyers do not come cheap. Over at Hong Leong Garden, unwilling sellers are pooling their own resources to pay for $60,000 in legal fees.

The initial fee for each unit comes out to $5,000, but should go down to $3,000 when more come on board.

'We should fight for our rights to keep the roof over our heads,' said Madam Lee.

But the potential cost of fobbing off a collective sale goes beyond simple dollars and cents.

Often, dissenters have to bear with threats and unpleasant surprises. There have been stories of cars being scratched and verbal abuse being hurled publicly at dissenters. This is why most dissenters prefer to speak only on condition of anonymity.

In the end, the dissenters say the sacrifice is worth it.

'You cannot find such designs like Habitat One anymore,' said home owner Vicky, referring to well-known architect Moshe Safdie's classic project in Ardmore Park that was sold en bloc last year.

'Cairnhill Heights is also unusual. It's painted in metallic silver and has a retro science fiction feel to it,' she said.

'We won't have an architectural heritage if we don't have such interesting buildings around.'

Asked another home owner: 'What signal is being sent to developers if buildings can be torn down after 10 years?'

'Developers know that they need not build a condominium to be sustainable over 30 years if most are going to be demolished in 10.'

---

They've lived for decades in the same home. It's where they've brought up their families or shared memories with deceased spouses. Money is not an issue - they simply refuse to move out. One widow was afraid her husband's spirit would not be able to find her if she moved; others say they had no idea their home was being sold. One thing they have in common: really annoyed neighbours who want a quick sale.

Who's who on the homefront

Sell! Sell! say some. No! No! scream others. Hmmm, if the price is right... In every en bloc soap opera, weird and wonderful characters emerge. Here are seven.

1. The Stayers

They've lived for decades in the same home. It's where they've brought up their families or shared memories with deceased spouses. Money is not an issue - they simply refuse to move out. One widow was afraid her husband's spirit would not be able to find her if she moved; others say they had no idea their home was being sold. One thing they have in common: really annoyed neighbours who want a quick sale.

2. The Sharks

They sniff out estates with 'en bloc potential', hoping to make a quick killing. Passive investors tend to 'flip' a unit even before the sale, but more active ones may insinuate themselves onto the sales committees to push through a deal. They've been called troublemakers and agitators by those resisting a sale, but other residents welcome their experience in en bloc sales.

3. The Bochap Investors

They are landlords, not residents. They're bochap (couldn't care less) for good reason. When their unit goes en bloc, they're more than happy to cash out. If it doesn't, they can still collect rent. The real losers: their tenants, who have to find a new place to stay in a quickly rising market.

4. The Activists

They are articulate, passionate, and well-informed. They distribute fliers, write letters to their MPs, and read up on property laws. They are the en bloc rebels of today with only one cause: to stop a sale from going through.

5. The Fence Sitters

They are the ones who sit on the fence, not knowing which side to gun for. Some are not keen to sell but they don't want to hold up the sale either. Some just aren't sure if selling is a good idea while others want to be the last one to sign.

6. The Troublemakers

They are hoping to get more than the rest either because they think their units are superior or because their circumstances are more pathetic. Their actions vary from dragging their feet on the signing of the agreement to bringing their cases to the Strata Titles Board. But do not be fooled: they are definitely pro-sale.

7. The Happy Sellers

Some have toiled their whole life to buy that one apartment which will net them an en bloc sale. Some are investors. An en bloc sale would bring them more quick money than they could have dreamed of. Needless to say, they are the first to say yes.

Joyce Teo, Property Correspondent
Sat, Jun 16, 2007
The Straits Times

Farrer Court going Enbloc

Pine Grove 2nd Attempt at Enbloc Sale

$550k extra lure for second en-bloc attempt

Barely two months after owners at Pine Grove estate rejected a collective sale, a fresh attempt has been made to lure them, with an extra $550,000 per unit.

In February, only about 50 per cent of the 660 owners in the sprawling ex-HUDC estate in Ulu Pandan voted for the sale, which would have earned them up to $1.2 million each.

This was well short of the 80 per cent requirement.

Now, according to a letter circulated to Pine Grove residents by one home owner, property experts have estimated that the largest unit should not be priced lower than $1.75 million.

And unlike the previous attempt, the new initiative promises to secure 80 per cent support from home owners first before even proceeding to form a sales committee.

Usually, a group of residents will form a sales committee on their own, appoint a property consultant and then try to secure support from at least 80 per cent of owners.

A sales committee has not been formed yet and the letter writer declined to be interviewed.

Mr Karamjit Singh, managing director of Credo Real Estate, said he was not surprised by the 40 per cent spike in the expected minimum price. ‘It’s not impossible. In the past six months, property prices have jumped quite substantially,’ he said.

The February attempt to sell en bloc had met with resistance because many owners feared the hot property market would force them to downgrade to less spacious flats.

At around 1,750 sq ft, most units at the 99-year leasehold development are big by today’s standards.
Project manager K.K. Pang, 54, voted against the last attempted collective sale.

‘With the previous offer of $1.2 million, there was no way we could have bought a similarly spacious apartment in this area,’ he said.

The Sunday Times interviewed 12 home owners in Pine Grove and almost all said they would agree to the sale if offered $550,000 more. Many believe their units deserve the additional sum because of the size and the estate’s close proximity to the Dover MRT station and various other amenities.

However, property consultancy Knight Frank’s head of research, Mr Nicholas Mak, is sceptical that the second attempt will go through.

Said Mr Mak: ‘The weak response in the first round might have put off property consultants from getting involved in Pine Grove. Why put in so much effort and resources into a lame duck?’

He also warned that some collective sale initiatives are not genuine, but rather a ploy by some home owners to drive up the value of their unit.

DTZ Debenham Tie Leung, the firm engaged to handle the first collective sale, said it is not involved in the fresh initiative, but did not rule out the possibility of getting involved again if invited.

‘I’d say the second time is always easier. Sometimes during the first round, owners are not ready to give up their units. By the second round, they’d have had sufficient time to reconsider,’ said Ms Tang Wei Leng, DTZ’s director for investment advisory services.

Some owners, however, insist on staying put despite the prospect of making a huge profit.

Financial assistant Louissa Ang, 24, moved into her Pine Grove flat two years ago and spent $60,000 on renovations.

Said Ms Ang: ‘This is my matrimonial home and I just moved in. I don’t want to start searching for another house so soon.’
Source : Sunday Times – 13 May 2007

Pine Grove owners reject big en bloc offer

Owners at Pine Grove estate have turned their backs on a big payout by rejecting a collective sale that could have given each of them up to $1.2 million.Despite prospects of making a large profit, many owners feared the hot property market would force them to downgrade from spacious flats to over-priced shoeboxes.

This sentiment is increasingly shared by owners of other estates considering en-bloc sales. And this has apparently slowed the process at Farrer Court and led to the upward revision of its reserve price.

At Pine Grove, only about 50 per cent of 660 owners in the sprawling ex-HUDC estate in Ulu Pandan voted for the sale in February – well short of the 80 per cent requirement.

The sales committee gave up on an option to extend the acceptance deadline by another month, effectively ending the process for now.

Retired university lecturer B.T. Liaw, who bought his 1,750 sq ft three-bedroom unit about 22 years ago for less than $300,000, would have pocketed a handsome profit.

But he told The Straits Times: ‘I don’t want to sell now. If you sell, you have to downgrade. Otherwise, you can’t get the same space in this area.’

Another owner, Ms Chan Chiu Ngor, agreed: ‘The risk is just too high.’

Most units at the 99-year leasehold Pine Grove are big by modern standards – 1,750 sq ft.

‘Very often, owners will compare their old units with new ones and then find that they cannot replace their units,’ said Ms Tang Wei Leng, the director for investment advisory services at DTZ Debenham Tie Leung, the firm engaged to handle the en-bloc sale.

The sale process sparked a lively and colourful inter-estate campaign.

An action group of about 10 owners led a campaign to defeat the proposal and sent several letters to owners on yellow paper outlining their objections.

For its part, the sales committee sent out almost two dozen letters – on green paper.

‘At one point, we received letters from different parties almost every day,’ said one owner who declined to be named.

If the Pine Grove sale had gone ahead, it would have been among the largest residential collective sales here.

The reserve price was revised twice, from $600 million to $650 million early this year. At $650 million, the owners would have reaped between $811,000 and $1.06 million each, depending on the size of their units.

But there were not enough takers at that price, and some owners upped the ante by demanding $1.2 million.

Units were selling for about $700,000 a year ago.

With the Feb 18 signing deadline looming, the sales committee decided to test the response based on the $1.2 million price level.

Ms Tang said her firm was prepared to market the estate at a higher price if it got the 80 per cent acceptance.

‘We thought the magic number was $1 million,’ said an owner keen to sell.

‘But when we asked if people would agree to sell if they got $1.2 million, the response was pathetic…There were less than 10 replies.’

Residents like the spacious estate for its convenient location near an MRT station, shops, churches and schools.

‘It’s not just a flat, it’s a home. It holds a lot of memories,’ said owner Tong Yoke Tho, a public relations consultant.

Ms Tang said: ‘The owners are not ready. Many of them are sitting on the fence.

‘It’s a timing issue. The market is moving so fast that units in their area have risen a lot.’

Straits Times – 18 Apr 2007