The Wait

It has been 8 months since the conditional sale of Tampines Court - and still no application for the sale to the Strata Titles Board has been made by the invisible and silent sale committee. This surely must be the longest delay between sale and application ever in enbloc history. Tampines Court might break a few more records before its over; largest number of appealing minority owners being another.

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The cost of a replacement unit on the open market continues to sky-rocket with the latest 30 yr old 5-room HDB in Marine Parade going for $750k (paid for in cash, no less). Being forced to sell a 1700 sqft private apartment to buy a much smaller HDB is hard to swallow. For new units: "Selling prices of the finished units [ in Bishan and Toa Payoh] could hit $600 per sqft or even more, which means HDB prices may reach the levels of private 99-year leasehold condos" Savills. Of course, even if we wanted to avail ourselves of these ridiculous prices, privatised ex-HUDC-ers like ourselves cannot buy directly from the HDB for another 30 months.
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Enbloc has made a mockery of home-ownership and turned a generation's aspirations and achievements to dust. Suddenly, that decision not to emigrate 20 years ago looks like a lost opportunity. One wonders what social / financial / housing policies will be hatched in the future, should we be encouraging our children to leave these shores with their shifting sands to find a real home on real soil? Let the 2.5 million people yet to come (from where, they never said) take on the mantle of false hopes and pipe dreams.

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Enbloc is the very antithesis of 'heartland' building. All those years put into improving and promoting good neighbourliness through neighbourhood committee activities, block parties, MP walk-abouts and the like are all laid to waste. Singaporeans are being reduced to mere tenants in their 'own' home. It is a well known fact that tenants do not contribute or participate to the same degree as those who want to put down roots in an area. With the root system clipped; who will bother?

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Picking up on a point made in Comments by poeima; why do we even bother with 99 yr leases when there is no intention of allowing people to hold onto properties for that length of time? Why not just dispense with the charade of property ownership altogether and rent out properties on a 10 year lease instead of the bogus 99? But of course developers could only build paper houses for that price; so hence the lure and false bait of home-ownership.

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An MP gave me this statistic "most Singaporeans move house every 5 years". How true is this? Is this really indicative of a genuine cross-section of society or were only those affected during the last economic downturn taken into account. It cannot be a healthy societal norm to relocate every 5 years - those with children know the impracticability of this - are we becoming a nation of rootless nomads? Houses, houses everywhere, and not a home to call my own? Perhaps those newly married couples, who bought new units in 'ulu-ulu' land and were eagerly waiting for their 5 year compulsory residence period to be up before selling off and moving closer to civilization (eg Tampines!), skewed the statistics. Has it become an impossible dream to live in the same spot for 30 years or more? Not everyone seeks financial riches, aspires a change of scenery every few years or possesses a 'must have or die, die' mentality; some of us are quite content with our achievements to date and wish to partake no more in the relentless and ultimately pointless treadmill of upgrading (or forced downgrading), home improvement and maximising potential. After over 20 years of such exhortations - 'enough already'!

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Ultimately, where does it get you anyway? The property market has become a game of snakes and ladders. You start at square 1 with a subsidised HDB (as most of us do), move up the squares to a larger home (by working hard and saving diligently) to accommodate a growing family, then you are hit by an enbloc. Well, enbloc can either be a ladder to greater riches or a snake to take you down. Mind you, you didn't land on this reptilian square by your own volition or bad luck; that I could accept. Instead, it is forced upon you by your majority neighbours and how far down you slide depends on your own particular length of snake But sell and buy back into HDB on the open market at 4 times the original price you must, effectively putting you all the way back, or close to square 1. You could lose 20 years on a snake.

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Of course, it is pointed out to us that we must sacrifice our homes for the common good.

I say, so be it........... but if the "80% want to jump over a cliff and the other 20% have no choice but to follow" then in all fairness to the 20% ; remuneration should at least be commensurate with replacement cost.

Replacement cost is of course not provided for in the LTSA - its only determining test is whether there be financial loss (Eng Lok Mansion STB decision, 2006). Yet, it is clearly not enough to consider only the buy price when reality for the regular guy, who owns only ONE home and LIVES in it, is that a roof lost must be replaced by another roof. It should be a roof if not on the same square, then at least on the same line!

Raw Deal

Waterfront condos coming up at Bedok Reservoir Information about upcoming launch can be found here

FOUR condominiums will be built where the former Waterfront View estate in Bedok Reservoir Road used to be. The first will be launched in the first quarter of next year, It will be called Waterfront Waves and have 405 units, of which more than half will be three- and four-bedroom apartments. More than 60 per cent of the units will also have reservoir views, the developers added. Prices may start from $700 psf.
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Well, few from the original Waterfront HUDC will be able to buy these units from their enbloc sale price, few from Tampines Court either. The units to be built on our land will be similarly priced out of reach to minority 'mass market-ers' such as ourselves who are now middle-aged or retired and are unceremoniously thrown out into a red hot property market against our will and better judgement.

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What kind of people agree to sell at $255 psf ppr knowing that the replacement cost for owners in the new condominium would be $700 - $850 psf; a price completely unaffordable to many who had hoped to stay in the area. Would the majority owners have agreed to this raw deal had they been informed beforehand? I think not. And is that one of the reasons why the sale committee didn't dare canvass views and seek consensus before selling the property?

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Another enbloc article in the paper today:-

Enbloc Millionaires To Drive Market

but such fairytales are not for us Tampines Courters, perhaps they should counterbalance that rosy article with one reflecting the grim reality of ex-HUDC's like Waterfront View, Gillman Heights, Minton Rise and Tampines Court entitled 'No-Win Enblocers Forced Back into HDB'.

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PHOENIX COURT

Sorry, there was some confusion earlier - there were not one but two different cases brought before the High Court concerning Phoenix Court. The first involved 12 majority owners against the Sale Committee (06 Nov) and the second the lone minority couple trying to block the sale (09 Nov).

1) The decision of Justice Lai Siu Chiu on 06 Nov
In short,

• the court came down hard on the 12 majority owners (the plaintiffs) who tried to scuttle the sale. He pointed to the clause in their CSA that stated :-

In attempting to set aside the CSA and the Supplemental Agreement, the plaintiffs had also breached the covenants and undertakings in cl 7 of the CSA. The relevant sub-clause states:
Every Owner agrees as follows:
(p) not to do anything whether by an act or omission that may prevent or otherwise be detrimental to the Collective Sale or the fulfillment of any of the purpose under this [CSA] or the [SPA].

• the S&P supersedes the CSA (as we all knew already, but here is the case that puts the seal on that argument).
• and finally:

It was because of the frivolity of the plaintiffs’ claim that I ordered indemnity costs against them in favour of all nine defendants.
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2) The decision of Justice Andrew Ang on 09 Nov

The minority couple lost the case.

A landmark decision and one which lays down the law regarding the consequences of non-compliance with a statutory requirement.

"The elusive historical approach of characterising procedural provisions as either directory or mandatory is largely anachronistic today. The preferred approach in modern times in determining the validity of an Act is to understand the purpose of the relevant procedural rule as well as the scope and intent of the governing statute. This approach does not entail ignoring the usage of words such as “shall” or “must” in legislation. It suggests that any prima facie inference raised by such words may be dislodged after taking into consideration the scope and objectives of the legislation and the consequences arising from alternative constructions.'

'To conclude, the modern approach in Singapore as well as in England, Australia and Canada is to treat the question as one of statutory construction to be answered by looking at the whole scheme and purpose of the Act and by weighing the importance of the particular requirement in the context of that purpose and asking whether the legislature would have intended the consequences of a strict construction, having regard to the prejudice to private rights and the claims of the public interest (if any).'

'This is not to say, however, that apart from the express grounds, there cannot be any other circumstance in which a Board may decline (or even be precluded from) ordering a sale.'

'At the end of the day, each objection must be examined on its own facts and the particular requirement breached set against the overall purpose of the legislation. One should then consider whether a strict construction and the invalidation of the Board’s order is what Parliament would have intended, taking into account any prejudice to the rights of parties and the public interest (if any).'

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Just as a matter of interest, I found another case on lawnet dealing with 'procedural' matters and how another judge views their importance. In a High Court decision on 06 Nov 2007 (Lee Hsien Loong v SDP and Others), Justice Andrew Phang Boon Leong wrote:

36 Enough has been said to illustrate a broader – albeit related – point. The rules of procedure – such as the one presently considered – are intended to ensure that one of the two twin pillars of justice is achieved, viz, procedural justice. The other pillar is that of substantive justice. As was observed in the High Court decision of United Overseas Bank Ltd v Ng Huat Foundations Pte Ltd [2005] 2 SLR 425 at [4]–[9]:

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'It is axiomatic that every party ought to have its day in court. This is the very embodiment of procedural justice. The appellation “procedural” is important. Procedural justice is just one aspect of the holistic ideal and concept of justice itself. In the final analysis, the achievement of a substantively just result or decision is the desideratum. It is more than that, however. It is not merely an ideal. It must be a practical outcome – at least as far as the court can aid in its attainment.

However, the court must be extremely wary of falling into the flawed approach to the effect that “the ends justify the means”. This ought never to be the case. The obsession with achieving a substantively fair and just outcome does not justify the utilisation of any and every means to achieve that objective. There must be fairness in the procedure or manner in which the final outcome is achieved.

Indeed, if the procedure is unjust, that will itself taint the outcome.

On the other hand, a just and fair procedure does not, in and of itself, ensure a just outcome. In other words, procedural fairness is a necessary but not sufficient condition for a fair and just result.

The quest for justice, therefore, entails a continuous need to balance the procedural with the substantive. More than that, it is a continuous attempt to ensure that both are integrated, as far as that is humanly possible. Both interact with each other. One cannot survive without the other. There must, therefore, be – as far as is possible – a fair and just procedure that leads to a fair and just result. This is not merely abstract theorising. It is the very basis of what the courts do – and ought to do. When in doubt, the courts would do well to keep these bedrock principles in mind. This is especially significant because, in many ways, this is how, I believe, laypersons perceive the administration of justice to be. The legitimacy of the law in their eyes must never be compromised. On the contrary, it should, as far as is possible, be enhanced.'

Statutory Notices

28 June 2006 - 697 owners - 372 units - 66.42%
23 Aug 2006 - 778 owners - 416 units - 74.28%
17 Oct 2006 - 800 owners - 428 units - 76.42%
11 Dec 2006 - 813 owners - 435 units - 77.67%
04 Feb 2007 - 837 owners - 448 units - 80%
31 Mar 2007 - 844 owners - 452 units - 80.71%
25 May 2007 - 853 owners - 457 units - 81.60%
19 July 2007 - 853 owners - 457 units - 81.60%
12 Sep 2007 - 859 owners - 460 units - 82.14%
06 Nov 2007 - 859 owners - 460 units - 82.14%
31 Dec 2007 - 859 owners - 460 units - 82.14%

No-No

It has come to my attention that a flyer has been sent to some minority owners (not those appealing, of course, as their lawyers would be up in arms) requesting the STB payment of $781.25.

Minority owners - (and note: those who half-signed are considered minority) - need not pay a single cent until the STB approves the sale and the costs and expenses of the sale are then deducted from the sale price ON COMPLETION OF THE SALE, after bank and CPF charges have been settled.

The SC should NOT be asking the minority to cough up at this point.

(To date, I believe 179 majority owners have not paid up, and are refusing to do so.)

If anyone has a copy of this flyer , please let me know, so I can post it on this blog.

HORIZON TOWERS

Horizon Towers STB Round 2:

Day 1:

Horizon Towers sale battle resumes today at strata board hearing Business Times - 30 Oct 2007

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The minority believe " they have plenty of objections to the sale that they have not yet aired. It is believed that these range from alleged non-compliance with the law governing en bloc sales to the sale being prejudicial to the minority owners."

Another lawyer turned up, this time representing a disgruntled majority owner who did not accept the new SC, their lawyers or their authority to extend the deadline to Dec 11. He contended that there was a 'frustrated' CSA as well as S&P agreement. More details on this point of argument can be found here:

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Horizon Towers: majority owners raises fresh objections before STB

Business Times -31 oct 2007

He was asked to leave but could hand in a written submission by the end of the week.

Next hearing will be 6-15 Nov at Court 15, City Hall, Level 2

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Day 2:

Seven vow to go all out to stop sale

SEVEN owners who opposed the collective sale of Horizon Towers from the word ‘go’ vowed last week to spend as much as it takes to keep their homes.
They have already spent nearly $2 million to fight the sale and may rack up double that by the time the saga is resolved.
‘We have no budget,’ said one, a retired former chief executive. ‘In life, not everything has to do with money. For us, this is our only home.’
These owners are locking horns with the majority owners – those who voted for the collective sale – at the Strata Titles Board (STB).
The hearing, with all the twists, turns and fighting over legal niceties that has marked it from day one, involves majority owners seeking STB approval for the original sale application rejected in August.
A number of minority owners – including the defiant seven who are split into two groups, each represented by different lawyers – oppose this, on a variety of grounds.
Disgruntled owners are becoming more common in Singapore. The property boom and the surge in collective sales have led to increasing numbers of people finding that rising replacement costs mean their bounty from selling en bloc counts for little.
One of the seven minority owners, who lives in a 5,000 sq ft penthouse, said: ‘There are seven people in my family, including the helper. You cannot expect us to downgrade to a 1,000 sq ft place.’
But the problems at Horizon Towers go deeper than that. The unhappiness over the sale of the 99-year leasehold estate started in January, said the seven minority owners.
It was then that they and many others learnt – via a newspaper report – that their 210-unit estate had been sold for $500 million to Hotel Properties and two partners.
The seven are among the 10 groups of owners who did not agree to sell and subsequently filed objections. One has withdrawn his objections.
They say the $500 million price tag, which works out to $850 per sq ft, is an unfair sum because prices have risen considerably. Developments nearby sold for more than double the price per sq ft achieved at Horizon Towers this year.
The seven owners spoke freely about protecting their homes but were cagey about disclosing personal details. Six of the seven refused to divulge full names, although they are listed in the STB affidavit.
They were also reluctant to reveal job details. One is a businessman, one runs her own company and there are at least three retirees – a lawyer, a chief executive and a property developer.
What unites them is the fight for their homes – something they say money cannot buy, and certainly not at last year’s prices.
Apart from their ability to spend hundreds of thousands of dollars to fight the sale, they are also clued-up about the law. ‘We are very different from other objectors,’ said Ms J. Tan, one of the seven. ‘We are very well-informed and very well-educated.’
A second owner, who was bemoaning the fact that every day of delay costs them about $100,000 in legal fees, said: ‘Every time someone makes a mistake, it becomes my problem.’
Said another: ‘If I don’t have grounds, I will not throw away my money. If I win, nobody will pay us back.’
Source : Straits Times – 6 Nov 2007

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"I don't believe anything in the papers"

Business Times - 7 Nov 2007

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Re: Sales committee member grilled on why he didn't take heed of rising prices
"Quote :Mr Fong also asked why Mr Wee didn't try to get a better sale price when it became known that residential property prices were beginning to soar; he referred Mr Wee to a Jan 11 Business Times article, 'Developers revive interest in unsold collective sale sites', reporting just such a surge in home prices.Mr Wee's response - 'I don't believe anything in the papers.' - drew sniggers from the crowd. When Mr Fong pressed on, saying that BT was 'a respectable daily', Mr Wee clarified his comment to mean that he felt 'we should not take everything at face value'. Referring again to the Jan 11 BT article - and the fact that neighbouring development, The Grangeford, had upped its minimum asking price by a quarter - Mr Ramesh said these should have alerted the Horizon Towers' sales committee to the fact that property prices were rising, that the promised premium had been 'significantly eroded' and that they should have done more to get a higher price.Mr Wee said the sales committee did try but relied on the expert advice of their sales agent, Alvin Er, that $500 million was the best price they could get. He said it never occurred to him that he could seek advice from other experts.

Comment : Mr. Wee said 'we should not take everything at face value'. Yet, he relied at face value the expert advice of Alvin Er, without occurring to seek supporting advice from other experts..... "

Forum page.

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Other Days:

Horizon Towers sale could be timed out by tribunal decision

Business Times-8 Nov 2007

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Horizon Towers owners renew objections to the sale at hearing
Straits Times - 7 Nov 2007

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STB not obliged to rule on Horizon Towers sale by 11 Dec

Straits Times - 8 Nov 2007

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HPL director's words were in contempt of court; owner's lawyers
Business Times - 10 Nov 2007

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DTZ: $500m was best en bloc price possible

Business Times - 13 Nov 2007

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Penthouses cost $20,$30m...where am I to go?

Business Times - 15 Nov 2007

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Majority owners fault Sale Committee

 MORE displeasure was expressed at the Strata Titles Board (STB) hearing into the Horizon Towers sale yesterday – this time, not from the minority owners who opposed an en bloc sale but the majority owners who agreed to it.
They found fault with the sales committee’s efforts, particularly, its failure to consult owners about going ahead with an offer from Hotel Properties Ltd (HPL) and its partners, which just met the reserve price of $500 million, set months before property prices started surging.
Majority owner Poonam Harilela, whose family owns several units in the development, said that they agreed to the en bloc sale in April 2006 because they were told by the sales committee they would get an 80 per cent premium if they sold their units collectively rather than individually.
But by January 2007 – around the time the sales committee signed the deal with HPL and its partners – that premium had dwindled significantly.
Ms Harilela said that her father’s unit attracted an offer of more than $2 million in December 2006 – close to what it would get in a collective deal – so it did not make sense to sell it en bloc.
She conceded that the quantum of the premium was not guaranteed by the sales committee.
‘But the reason we went for the en bloc was the premium, because it could better our lives,’ she said.
‘The main reason why we wanted to sell was to upgrade our lives, not to downgrade and have nowhere to live.
‘We’re not talking about the stock market, we’re talking about a home. And at that point in January 2007, the prices were so high we couldn’t get a replacement unit. And that’s the point,’ said Ms Harilela, who has lived in Horizon Towers for 17 years.
She acknowledged that the collective sale agreement signed by the consenting owners was legal and binding and gave authority to the sales committee to sell the development as long as the reserve price of $500 million was met.
She said that this was why she approached sales committee chairman Arjun Samtani – before the deal was sealed – to ask if the committee could reconsider selling the development en bloc.
A second witness yesterday, Mohinder Kalra Singh, testified in his affidavit that the sales committee failed to go back to the consenting owners to ask them whether they wanted to proceed with the HPL offer.
The hearing before STB was concluded yesterday.
The various parties have until Nov 23 to make their closing submissions to the tribunal and until Nov 30 to make their replies.
The STB tribunal will then deliberate and announce its decision by Dec 7 – just before the sale completion deadline of Dec 11.
If the tribunal approves the sale and grants Horizon Towers a collective sale order, the minorities still have the right to appeal against that decision.
If the STB decides not to grant an order and the sale falls through, HPL may go ahead with the lawsuit it has filed against the majority owners for breach of the sale and purchase agreement.

Business times 16-Nov 2007

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Horizon towers hearing over, Strata Titles Board yet to rule

PUBLIC hearings on the hotly-disputed $500 million collective sale of Horizon Towers drew to a close at the Strata Titles Board (STB) yesterday.

But it is still unclear if the STB will hand down a result by Dec 11: the sale completion deadline for the 99-year leasehold property.

Both sides – those for and against the sale – must file written closing submissions by Nov 23 and a reply by Nov 30. The STB said it will make a decision in due course, after considering the submissions.

Sources said a ruling could come as soon as early December.

But even if that happened, the case could drag on if one side decided to appeal against the ruling.
Already, this STB hearing is said to be the longest ever. The dispute stems from unhappiness among some owners who feel the $500 million price tag is unfair.

The case went back to the STB last month after the High Court decided that the STB’s earlier decision to throw out the sale on technical grounds was wrong.

The consenting owners had earlier extended the sale deadline to Dec 11 in a bid to avert a lawsuit brought by developer Hotel Properties and its two partners for alleged breach of contract.

The STB had said during the hearing that it had no legal obligation to rule before the deadline.
One of the objectors, Ms J. Tan, is optimistic about the outcome of the hearing. ‘We fought hard for our homes… We are confident that a case of bad faith has been made out.’

She said the evidence suggests to them that the $500 million deal was inked this year even though the consenting owners would have objected to it, given that the premium had evaporated. After all, the premium was what had induced the consenting owners to sign the collective sale agreement, she said.
Two consenting owners – Ms Poonam Harilela, a member of the Harilela family that owns Holiday Inn Park View Singapore, and Mr Mohinder Kalra, employed by the Harilela group for 32 years – gave evidence on that point yesterday.

Mr Kalra, who owns one unit, said that he had signed the agreement because of an expected 80 per cent premium, but that this premium had almost vanished by January. He told the board yesterday: ‘I thought to myself that if this unit has to be sold at $2.3 million, why do we need a collective sale?’
A unit was valued at $2.2 million in February.

At $500 million, apartment owners would get about $2.3 million each, while penthouse owners would get at least $4 million each.
Straits Times - 16 Nov 2007

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Friday 07 Dec 2007

HorizonTowers Decision : minority lost their case.

SC en-bloc update (OCT)

A letter from the Sale Committee to 'Fellow Owners', but intended primarily as an update for the majority (as stated).
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No reason given for the delay
No apology

Read this:

Supreme Court Judgments for Horizon Towers.
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Concerning allowing the Buyers lawyers to participate in the proceedings
Decision 1 found on lawnet for a search fee
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Concerning the STB decision to throw out the sale on a technicality.
Decision 2 found on lawnet for a search fee
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Justice Choo Han Teck wrote in his judgment
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'Parliament is telling the Board very categorically, that the Board has the power to allow amendments'
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'it is the duty of the Board to consider whether there was any error that was sufficiently material or substantive to affect its decision whether to grant or refuse the application.'
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First, it would have to establish the nature of the error, whether it be typographical (a typo), clerical, intentional (perhaps there's a legal word for this - say they knowingly include signatures that are not the true owners etc), or even criminal.
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"If an error or omission had caused prejudice to the minority, the Board may, in the exercise of it's discretion, dismiss the application".
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After mulling it over for a while, I have come to the conclusion that this ruling isn't, afterall, a complete closure of a very valid and important avenue of objection for the minority. If prejudice to the minority can be proven then the STB has to consider the technicality to be a serious one. Far from disallowing any technicality to be ignored in its entirety, it now has to be examined with regard to it's prejudicial nature. A fact far more damaging if proven to be so.
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HORIZON TOWERS

Horizon Towers will go back to STB and have it's case heard again, starting from where they left off.
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Court to rule today on STB dismissal decision

Business Times - 11 Oct 2007 .

High Court gives Horizon sale fresh lease of life

Business Times - 12 Oct 2007

STB hearing dates

Oct 30 running on selected days until Nov 15

This and that

Counsel take exception to Horizon Towers report

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Everyone knows it's just a game they play in court; see who can make the quickest and smartest retort. Perhaps the journalist did hit below the belt by suggesting latent personal acrimony between the counsel. After all, throw any three lawyers into a room together and I'm sure you could dig up some kind of personal past relationship; old rivals from Raffles for a start.
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Nothing to report on the Tampines Court front. We are still waiting for the sale committee to make the next move. They wasted no time in marketing the property within 2 days on reaching 80%, yet it's nearing 7 months since the sale and they still haven't applied to the STB. Pity the order wasn't in reverse. The STB schedule is believed to be full, so even when they do file, it might be a long time before a hearing can be scheduled....

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Minton Rise's hearing (a privatised HUDC) is before the STB this week (or so I was told earlier). Poor Minton Risers, another HUDC sold down the river for just the bare reserve price. Some details:

Kheng Leong, a privately owned property group, bought the 472,378.5 sq ft site in Hougang for $209 million on 14/15 Jan 2007. It has a 2.8 plot ratio which could mean a new condo with about 1,100 units averaging 1,200 sq ft.. Minton Rise has 342 apartments and owners will receive about $611K on average, which works out to about $236 psf of potential gross floor area, inclusive of developmental cost and differential premium. (A pittance for their site, they won't even be able to afford one of those shiny new homes, it's downgrading for most of them. A travesty.)

Minority owners have secured a higher valuation for their estate than the sale price, $31 million according to the Today article -6 July. Some of the majority owners are now up in arms about receiving around $100,000 less than they could have.

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Horizon Towers ruling out Thursday 11 October:

Court to rule today on STB dismissal decision

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Amendments kick in on Oct 4 2007

Amendments to en bloc sale legislation take effect on 4 Oct 2007

1. The Ministry of Law has announced that the Land Titles (Strata) (Amendment) Act, enacted by Parliament on 20 September 2007, will take effect from 4 October 2007.

2. The provisions of the new Act will apply to developments where the required 80% or 90% majority consent of owners (based on share value) has not been obtained as at the date of commencement of the Amendment Act, i.e. 4 October 2007. These developments will have to comply with the new requirements set out in the Amendment Act. Developments where the required 80% or 90% majority of owners (based on share value) have signed the Collective Sale Agreement will not need to comply with the new requirements. Developments that are 10 years or more require 80% majority consent while those below 10 years require 90% majority consent.

ISSUED BY THE MINISTRY OF LAW3 OCT 2007

© 2005 Government of Singapore

How does this effect ongoing and future enblocs? Who benefits the most?
Industry weighs new en bloc rules - article from Today here

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Gillman Height at the STB

20 October

The STB has had to make some adjustments due to 'unforeseen circumstances'. (I'm guessing it's because they have to make room for the continuation of HT hearing on the 30th Oct onwards.) Written and oral submissions have been pushed forward as a consequence. What those submissions are, I do not know.

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05 October

After arriving late for the 3rd day of the hearing, I only heard three minority owners questioned on their affidavits in the morning. .

After he counsel had finished with a witness, any minority owner could stand up and ask further questions of that witness. This participation by the on-lookers was a surprise to me as in my previous attendance at another estate's hearing, no such participation occurred. Was it just for minority witnesses only, I wonder?

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I cannot give an account of the 4th day as I was only partially present. A statement given by a minority owner's valuer being one witness.

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The last day of the hearing was a continuation of day 4. I was told the argument for CSC was given in a written submission only.

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The Board has up to 3 months to deliver their written decision. How soon for an oral one?

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28 September

For the first two days (24th & 25th Sept), Counsel for the minority cross-examined all the applicants' witnesses namely the SC Chairman, the two valuers & the two marketing agents.

(as it is an ongoing case, details have been omitted)
Next week, 3 Oct-2007:- will be for witnesses for the minority which should total around 10 people altogether giving their statements.

4 Oct-2007,:-arguments on point law regarding the 80/90% requirement will be heard.(TOP/CSC) Also scheduled; the perceived irregularities in the CSA etc

That's all for now, folks.

__________________________

18 September

Taken from CondoSingapore article:

An issue as simple as the age of the estate is one of the biggest points of contention. The former HUDC estate was built in 1984, but privatised in 2002, when the Building and Construction Authority issued the Certificate of Statutory Completion after work on additional facilities was completed.

Depending on which year is used, the majority consent needed by the sale committee would differ. Under current laws, a 90-per-cent approval is required for developments less than 10 years, while older developments only need 80 per cent.

At Gillman Heights, the consent level was 87.5 per cent of its 608 units.

Several issues have dogged the sale since a deal was struck with CapitaLand in February. For example, the Collective Sale Agreement (CSA), inked in June last year, had expired, and there was no valid extension in the supplemental CSA, Mr Ng said.

"Since the CSA is in fact over, the sale committee is not authorised to represent the subsidiary proprietors in making the sale order application," he said. The sale committee lawyers, from Lee & Lee, could not be reached for comment.

Gillman Heights is one of a series of high-profile en bloc deals gone ugly. And a lawyer, who declined to be named, felt that even with the new regulations expected to kick in early next month, such messy tussles would be here to stay amid a property boom.

"The new laws would reduce the complaints over the transparency of the process," he said. "But why are people unhappy? Because they can't buy a replacement with the money (they're getting)."


Strata Titles Board Hearing Dates: Sept 23, 24 & Oct 3,4,5
The outcome of this case will determine whether or not Tampines Court requires 80 % or 90% approval before application to the Board. This is probably one of the reasons why there has been no advertisement to date in the newspapers (a STB requirement), even though 7 months have lapsed since the sale.

The CSA and S&P

Since ‘all’s quiet on the western front’ at the moment, it’s as good a time as any to go back and reflect on the Collective Sales Agreement (CSA) and the Sales and Purchase Agreement (S&P). It could serve as a warning for others reading this blog who are perhaps undergoing an enbloc sale of their own in their estate.

There’s very little to say about it except that my copy (the draft copy given to all owners) of the CSA has 30 pages of clauses defining the obligations of the signatories, the Sale Terms, the Sale Committee etc. All very detailed, covering every eventuality and written in opaque legalese.

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(The following is my layman's reading of the said documents and as such may contain errors, If you find any faults or question the analysis then PLEASE LEAVE A COMMENT! I will amend accordingly)

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CSA:

Sale Terms -

4.1.5 COMPLETION OF THE VALID CONTRACT OF SALE SHALL BE SCHEDULED NOT EARLIER THAN 3 MONTHS AND NOT LATER THAN 6 MONTHS FROM THE DATE OF THE VALID CONTRACT OF SALE

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So according to the CSA the expiry date should have been 25th September 2007.

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BUT

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4.3.1
“THE SALE COMMITTEE SHALL, IN CONSULTATION WITH THE SOLICITORS AND/OR THE PROPERTY CONSULTANTS (but, importantly, not the owners!) HAVE THE ABSOLUTE DISCRETION TO NEGOTIATE AND AGREE WITH ANY PROSPECTIVE PURCHASER OR TENDERER ON THE DETAILED SALE TERMS OF THE COLLECTIVE SALE, AND TO ACCEPT ANY QUALIFICATIONS, ADDITIONS, MODIFICATIONS, OR AMENDMENTS PROPOSED BY ANY PROSPECTIVE PURCHASER OR TENDERER TO THE SALE TERMS OF THE COLLECTIVE SALE, INCLUDING. BUT NOT LIMITED TO, THE SALE TERMS STIPULATED IN 4.1 (in short, change anything and everything in the CSA pertaining to the Sale Terms, which they subsequently did) HEREIN, SAVE AND EXCEPT CLAUSE 4.1.4 (this refers to lowering the reserve price; the one thing they cannot do by LTSA regulations)…”

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And

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12.5
"ALL INSTRUCTIONS GIVEN BY THE SALE COMMITTEE TO THE SOLICITORS AND/OR PROPERTY CONSULTANTS OR OTHER THIRD PARTIES IN ACCORDANCE WITH THIS AGREEMENT SHALL BE DEEMED INSTRUCTIONS GIVEN TO THE SAID PARTIES BY ALL THE SIGNATORIES (thus covering themselves so that they don't have to go back to consult with the owners before selling the property lock, stock and barrel)."
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These two clauses together give the SC absolute power.

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So what did the now all-powerful Sale Committee do ?

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Well, they went forward and 'agreed and negotiated with the proposed purchaser' and made the following 'amendment' in the S&P
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S&P
6 - ...THE SALE AND PURCHASE HEREIN IS SUBJECT TO AN STB ORDER BEING OBTAINED WITHIN 12 MONTHS FROM THE RPA APPROVAL DATE....

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Calculating the RPA approval date is a little tricky and if I am wrong PLEASE CORRECT ME!

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Order of official approval: OPP >>>LTU>>>RPA

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OPP: (Outline planning permission) - granted on 3 May 2007 (see pg 4 of S&P)

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Lease Top Up Approval Date: as of now unknown but up to 10 weeks + 2 wks extension from OPP = July 26 (actually this is also open-ended as they can 'mutually agree' to extend even this etc). (see page 5 of S&P)

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RPA (Residential Property Act): approval to be obtained within 6 weeks from the LTU = 6 Sept 2007 . But, this is tentative as it all depends on the LTU date which is, as already mentioned, unknown. (see pg 7 and 16 of S&P)

So, using the time frame above they have , approximately 18 months from March 25, 2007 (date of sale) to September 2008 to get the sale approved at the STB (and even then they can extend the deadline if they mutually agree to do so).

Owners signed for 6 months in the CSA.
The Sale Committee, without owner consultation,   TRIPLED the length of time the consenting owners thought they had agreed to when they signed the CSA.

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UPDATE (25 Oct 2007)

Letter from Sale Committee dated 23 October 2007:-

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OPP date - 03 May2007

LTU date - 22 June 2007

RPA date - 10 July 2007

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So, I believe this means the expiry of the S&P is 09 July 2008 (12 months from the RPA in principle date of approval). But of course, these things are always extended in perpetuity or so it seems ...........

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UPDATE (Mediation 2008)

Qualifying Certificate expires on 25 July 2008

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The in-principle date of approval and the Qualifying Certificate are one in the same Please check the Residential Property Act at the side 31 (2).

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QC for each unit: $400

So, I suppose

560 units = $2,240,000

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Another minority voice

Here is a flyer sent by another dissatisfied minority owner (not me!). I think this might be the last one for a while...

Newspaper article 1

September 1st 2007

LIEN HE ZHAO BAO

Recent article in the Chinese morning newspaper about the 41 appealling minority owners and some of their views. No mention of how Tampines Court could turn out to be another Horizon Towers. I believe it is highly edited, but nonetheless, a decent article.

I'm still waiting for a translation........

Rebuttal

A flyer in the post today that needs a reply.
Dear Author,

URA WEBSITE for proof of minority position here

Private residential property transactions with caveats lodged (in the last 12 months)

check out condos in our area:
THE TROPICA, LOYANG VALLEY, AZALEA PARK CONDO, CARISSA PARK CONDO, DAHLIA PARK CONDO, BALLOTA PARK CONDO, AVILA GARDENS, CHANGI GARDEN, MODENA, TROPICAL SPRING, SIMEI GREEN CONDO, MELVILLE PARK, SUNHAVEN, CHANGI RISE CONDO, TAMPINES COURT

Please! Enough of the property agent's stuff and nonsense about how old and cheap our estate is!

Just go to the URA website above and check for yourselves the price movement of condos in this area. The list is huge. Your $420,000 figure is plucked from the air! The last individual unit sold in this estate was in Oct 06, before the exponential rise in property prices, and even then it was sold for $520K (figure taken from website).

Don’t forget; we didn’t sell our units INDIVIDUALLY but collectively with our enormous common area included – what is the price of our common area??. Was it given away for free? What happened to the 66% premium promised by the PA? Projected sale price of new development - $745 per sq foot (revealed at EOGM by property agent). Gross realization - $1.9 billion. 

Property vaues have moved less than 10% in the past year? According to the URA website, Loyang valley moved ~70%, Melville Park: ~45%, Changi Rise Condo:~40% ...it goes on and on..

Lease decreasing? Loyang Valley (99yrs) is older and is leading the pack with a 70% price increase in the last year. Potential buyers are obviously not put off by the looming 30 yr mark.

Upgrading: Buy a soon-to -be upgraded HDB and expect to receive a bill for $30,000.
Every estate requires upkeep: show me one that has everlasting lifts and eternal paintwork. You have a leak? Call a plumber. This is maintenance and it is a fact of life. Upgrading is optional, a decision taken by SPs at an AGM. These scare tactics might have worked on some people at the beginning, but believe me, the minority remaining have and never will be persuaded by such weak and futile arguments.

Value: only a monetary value is put on our homes (and a very low one at that without a valuation). Windy, spacious, solid, loved, irreplaceable. Do you expect to live forever? Do you think more money is the key to happiness? If being neighbourly is so important to you, why are you selling your neighbours’ homes without their approval? What harm have we ever done to you? As for accusing the minority of being un-neighborly; well, just who is pushing who here? We have a right to defend our homes at the STB. Personally, I have experienced no hostility from neighbours, and I feel no animosity towards those who signed. Majority owners are most certainly not fools, they know they have been led down the proverbial garden path.

Let the others do the work? Who asked them to appoint themselves? What work did they do? It is normal practice when selling a home to 1) do a valuation 2) keep an eye on the market and raise the price accordingly and 3) sell in a reasonable length of time. Was this done? The guardians of 560 units did a very poor job and did not inform us of the various bids and offers. As a majority lady at the EOGM so eloquently put it: 

“I put my trust and faith in the SC, only to find that my faith was blind and my trust misplaced”..

STB Amendments

So, the new amendments to the enbloc process are finally here. Unfortunately too late for us.

Having lawyers present to 'clear your doubts' on the matter sounds good, but the crucial problem remains: to look for answers one must first know the questions.

I presume the 'lawyer' that will be present in future enbloc meetings/signings will be none other than the enbloc lawyer. But surely that will defeat the purpose. His clients are the SC and not the majority owners.

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From the Ministry of Law website

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Oral Answer by DPM Prof S Jayakumar to Parliamentary Question on En Bloc Legislation, 27 August 2007 here

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Volume 83
Monday No. 9
27th August, 2007
PARLIAMENTARY DEBATES OFFICIAL REPORT
(Recourse for unhappy residents)

Ms Irene Ng Phek Hoong asked the Deputy Prime Minister and Minister for Law what recourse is available to unhappy residents affected by en bloc sales of their units and who cannot afford to hire legal counsel to pursue their case, especially regarding unscrupulous and intimidating practices.

The Deputy Prime Minister and Minister for Law (Prof. S Jayakumar): Mr Speaker, Sir, currently, the law allows an owner who does not agree to an en bloc sale to file an objection with the Strata Titles Board. There is no fee for filing an objection; and the owner is not required to be represented by a lawyer and he may appear before the Board himself.

Besides this, any owner who at any time feels that he is being harassed or intimidated to consent to an en bloc sale may lodge a Police report.

Let me add, Sir, that my Ministry has completed our review of the en bloc sale legislation and I shall today, after the conclusion of Question Time, introduce the Land Titles (Strata) (Amendment) Bill. The changes to the legislation will be explained in detail by myself during the Second Reading of the Bill at the next sitting of the House. For now, I will just say that in addition to the proposals that we had set out in the public consultation paper and which I mentioned during the Committee of Supply, the Government has also accepted a number of additional changes that will further enhance transparency and procedural clarity, as well as offer better protection to the owners of affected developments. Sir, I believe these changes will go a considerable way to address the unscrupulous and intimidating practices that Ms Ng referred to in her Question.

Ms Irene Ng Phek Hoong (Tampines): Sir, as the Minister has noted, there have been various reports of intimidation in the past by sales committee. Can I ask the Minister whether there are any provisions now or in the new Bill to ensure that the owners can oust the sales committee if the sales committee had been found to be either negligent, under-handed or unfair in its dealings, as well as not representing the interests of the owners but more of the buyers?
The second question is with regard to pending cases, such as Tampines Court which started the en bloc process at the end of 2002, before the property boom. The STB has yet to approve the sale, and the sale and purchase agreement will expire on 24th September, renewable by four months. I believe minority owners are opposing the sale and have filed their objections to STB. Can I ask the Minister, pending the review, how will these owners be affected by the changes that will be coming?

Prof. Jayakumar: I would ask her to be patient as it is just a matter of time before she reads the provisions of the Bill. As a general rule, I hope she will understand that I would like to avoid commenting on specific cases of en bloc sale because I do not have the details and it may not be proper as some of these cases may end up in court. The general rule in legislation is the prospective application. The Bill has certain provisions for transitional and savings provisions. And later if she has a look at these provisions, they provide that the amendments will apply to all developments, except those where 80% or 90% majority, based on share values, have already signed the collective and sale agreements at the time the amendments come into effect. And there are also provisions in the Bill concerning applications made to or pending before a Board at that time the amendments come into effect. So I think she has to study these proposals and I hope she will speak her mind when the Bill is read a Second time.

Pros and Cons to signing now

For those minority owners who are thinking that "it's a done deal, I might as well sign now" - perhaps you should consider the pros and cons to signing first:

Diadvantages of being a majority owner at this point in time:

1. You surrender all rights to your home.
2. You cannot sell your home as a caveat has been served on your property.
3. You do not know what the outcome of Tampines Court STB appeals will be. Look at the mess the majority at Horizon Towers is in!
4. Only majority owners can be sued for breach of contract.
5. Find out for yourselves what the costs are if STB does NOT AGREE to the sale.
6. You may also have to pay the minority lawyer's fee (STB decision).
7. You may pay the minority share of the costs if the STB does NOT AGREE to the sale.

Advantages of being a minority owner:

1. You pay nothing unless the STB AGREES to the sale
2. You can still sell your home, as the caveat served is premature and can be removed (old rules).
3. No one can sue you as you have not signed any legal document.
4. You retain all the rights to your home.
5. You get the same sale price as everyone else if the STB allows the sale.

Disbursement fees

The en bloc lawyer has sent out a letter to the majority owners demanding that they pay $781.25 to them as soon as possible for the purposes of paying for the disbursements to be incurred in the application to the STB.

These are the disbursements listed:

1. Advertisement fee: $200,000
2. Photocopying: 50,000
3. Valuation: 20,000
4. STB filing fee: 5,000
5. Hearing fee(x5): 5,000
6. expert witness': ______

Total: $280,000

$280,00 / 457 majority units = $612.69

So, are there more costs involved?

According to the CSA (draft); the lawyer fee that is charged on completion = $2,380 / unit + disbursements.

The lawyer fee for application to the STB is extra: $30,000 + $5,000 per minority objection, subject to a cap of $50,000.

Whether this is a $50,000 overall fee cap or $80,000 is unclear, but I believe the latter.

As it is certain that at least 40 minority owners are appealing, does this STB lawyer fee have to be paid upfront by the majority along with the hefty disbursements? It seems so.

$280,000 + $80,000 = $360,000

$360,000 / 457 majority units = $787.74

This is closer to the figure if $781.25

The majority should check on this.

HT 1 and 2

The failed Horizon Towers buyers have sent a a letter to lawyers representing the MAJORITY owners who signed the original sales deal..... alleging the sellers are in breach of contract.

I have no idea how this will eventually pan out, the developer went into this sale knowing it was conditional to STB approval. The majority could theoretically sue the Property Agent and Lawyers for negligence for not getting the papers in order.