NUS Role in Gillman Heights Saga

NUS played critical role in Gillman Heights en-bloc sale Straits Times 19 April 2008

I REFER to Mr Nicholas Kong's response on behalf of the National University of Singapore ('NUS: No conflict of interest in property deal', April 2). We minority owners - who have no wish to hawk our homes - of Gillman Heights in which estate NUS, by virtue of its 50 per cent ownership (303 units out of a total of 607), is the Goliath, wish to share our experience in the collective sale of Gillman Heights and, in particular, the critical role played by NUS.

The owners were relieved by NUS' reassurance at an owners' meeting on Feb 18, 2006 that it would refrain from casting its vote unless the 'majority' of individual owners decided to sell. We assumed, in the case of a collective sale, majority must be at least 80 per cent, or 90 per cent, depending on the legal age of the estate, but definitely not 51 per cent.

Just over 32 per cent (or around 65 per cent of owners of the 304 units) chose to sell. The owners assumed that that should put paid to the collective sale. However, the sales committee left us in suspense. In June 2006, it announced that NUS had decided to join the sellers. With NUS' 50 per cent, the total percentage jumped to 82.7 per cent.

In May last year, we learnt that Hotel Properties Ltd and two private funds had taken up stakes in the buyer of Gillman Heights, Ankerite, a subsidiary of CapitaLand. CapitaLand would retain a 50 per cent ownership of Ankerite. However, owners of the two funds were not identified.

Only during the High Court appeal in March this year was it revealed that NUS owns one of the private funds. It has a 16 per cent stake in Ankerite. The Strata Titles Board did not have this material information during its hearing of objections in September and October last year and before it issued its ruling in December. Thus, it could not be aware of NUS' direct financial interest in Ankerite at earlier mediation sessions held in June and July last year.

Mr Kong asserts: 'The financial interests of the university are aligned with those of the Gillman Heights owners seeking the best sale price for their units.' In 2006, after the individual owners had made their choice and before the June announcement that NUS would sell, much was going on while the owners were kept in the dark. It belatedly come to light that the delays had much to do with NUS' 'suggestions' that the reserve price be slashed by a hefty 20 per cent (a letter to this effect, dated May 16, 2006, was sent by NUS to the chairman of the Gillman Heights sales committee). Was that NUS' idea of 'aligning' its financial interests with those of the owners?

Lam Seng Mingand three other owners

Developers cutting prices

"Different strokes for different segments if developers cut prices"
Business Times - 18 April 2008

"In cutting prices by 3-5 per cent at three existing projects and achieving encouraging sales, property giant Far East Organisation may have set the cat among the pigeons.

Other developers must now ask themselves whether to embrace this strategy. Of course, the bigger ones have the financial muscle to hold back launches and sales for months and don't need to chop prices to entice buyers in the face of weaker market sentiment.

But there are opportunity costs involved in letting projects linger on the market and in holding on to sites -especially ones with 99-year leasehold - instead of launching the project.

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Still the months ahead may prove fruitful for bargain hunters"

REGENT GARDEN

The High Court reversed the decision of the STB which threw out the sale of Regent Garden in January this year and ordered the owners to complete the enbloc sale with Allgreen Properties.
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"Regent Garden owners ordered to complete enbloc sale to Allgreen"
" Allgreen had already asked the High Court for an order to get the majority owners to complete the sale. It argued that the STB had no need to even examine the sale, as all owners had agreed to sell.

The court agreed, ruling that allegations of mistake and breach of contract were without merit and that the STB's decision to halt the sale of the West Coast Road estate was irrelevant. it also ordered the 25 owners to pay Allgreen's costs."
Straits Times 17 April 2008

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"Court directs Regent Garden sale to Allgreen to proceed"

Business Times 17 April 2008

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Regent Gardens En bloc will go ahead

Today-17 April 2008

Property Agent voice

Since I frequently post letters from minority dissenters in full, it is only fair that I post an property agent viewpoint received today through a comment.

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Dear Owners,

The Tampines Court en bloc has the overwhelming support of the owners. If there was a general election in any democratic country, the en bloc would be said to have received a landslide victory from amongst the owners. Surely the wishes of the overwhelming majority in any democracy must prevail over the wishes of the minority! The minority owners are exactly what they are, that is, they are in the minority.

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The owners of Tampines Court own the land according to their share values - they are joint owners of the land. If the majority owners of the land wish to sell the land, should the minority owners hold all of us up? The minority have lost the fight to prevent the majority from obtaining the 80% consensus. They have failed, and now they try to block the process in the STB, against the will of the majority. Only a minority of the minority objects at the STB Of the ....minority owners who have not signed the CSA, there are only....objectors. Obviously the other minority owners are prepared to let the objectors fight the futile fight, whilst they watch the fire from a safe distance.

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If the STB orders costs against the objectors, the objectors alone will have to bear the costs. Do all the objectors appreciate that they are risking their money for the good of the non-objecting minority owners? Some of the minority (and the objectors) have themselves bought alternative flats!So why are the objectors still objecting? Surely the thing to do is to get the en bloc STB order as soon as possible, so that completion could take place as soon as possible. In another en bloc case, some of the owners bought alternative units and the objector 'fought' all the way.The objector lost the case, and had to pay huge costs to the majority. In the process, the owners who had contracted to buy alternative flats were sued by the sellers of the alternative flats, because of the delay in the completion of the en bloc. The objector caused much misery to himself and all the other owners.

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The Property Market has fallen! At the time that the en bloc process was started, owners were looking at a substantial premium. Now, if Tampines Court is to be tendered out, the price would have fallen. The subprime losses are said to be in the region of $1,000 billion! The whole market is uncertain, and developers are looking more at state land sales instead. There are so many sites available, and developers do not have to wait for the troublesome process of the STB. Just look at the following examples:Royalville, a 174,176-sq ft freehold residential property located along Bukit Timah Road, will be put up jointly with an 8,420-sq ft drainage reserve for collective sale. The combined indicative asking price is S$305 million. Including a development charge (DC) of S$6 million, the price works out to S$1,106 per sq ft per plot ratio (ppr), which is 10 to 15 per cent lower than the previous indicative. (The Business Times, 8th April 2008)

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The S$516 million collective sale of Tulip Garden, a freehold residential property located along Farrer Road, to a unit of Bravo Building Construction has been officially rescinded. The collapse of the en bloc transaction was down to the majority owners’ refusal to accept the developer’s request for an ‘unconditional’ extension of time of the next 5 per cent instalment payment due to them. (The Business Times, The Straits Times, 9th April 2008)

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Amber Glades, a freehold residential property located along Amber Gardens, has been relaunched for collective sale at an indicative asking price of S$127 million. Including of a DC of S$3.5 million, the price works out to S$1,140 per sq ft ppr, which is 15 per cent lower than the previous indicative. (The Business Times, 9th April 2008)

Replacement units are available if the STB order is obtained quickly, then we would all be paid quickly as well.Then we would be able to use that money to buy alternative units.
April 15, 2008 4:35 PM

In reply

"If there was a general election in any democratic country, the en bloc would be said to have received a landslide victory"
Alas, this is not a general election where a simple majority of 50%+1 is required to win. This is the compulsory acquisition of other people's homes which requires 80% of the total share value by LTSA rules. So 79.99% is not a majority. Justice Lee (in his 19 March 2008 decision) stated “it is therefore not for the court to water down the protection afforded by the legislation in its present form in favour of the majority, vast though it may be."

“the wishes of the overwhelming majority in any democracy must prevail over the wishes of the minority!”
-only if they comply with the rules

“there will be adequate safeguards to protect the interests of minority owners. These safeguards are found in the procedures as well as in the substantive powers of the Strata titles Board".(Parliamentary Speech 2007)

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The High Court does not condone the brutish 'might is right' position - in the Horizon Towers High Court decision Justice Choo Han Teck wrote in his 11 Oct 2007 judgement that "...

"fairness requires that the law is applied consistently to everyone in similar circumstances. It gazes upon the horse as it does the horseman. It may be the appellants today who slipped, and tomorrow, the respondents. If the majority succeeds it is because it is right, not because it is the majority. Likewise, if the minority succeeds it is because it is right and not because it receives favours granted only to the underdog"

In a High Court decision on 06 Nov 2007 Justice Andrew Phang Boon Leong wrote:
'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.'

'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.'

"The minority have lost the fight to prevent the majority from obtaining the 80% consensus."
That has yet to be determined. The STB hearing is in June.

"Only a minority of the minority objects at the STB"
That is true – not everyone is of the same mindset; some will persevere where others fall away, still others prefer to remain on the sidelines. This is human nature.

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"If the STB orders costs against the objectors, the objectors alone will have to bear the costs." The objectors proceeding with the hearing are fully cognizant of the costs involved, not just at the STB level but the High Court and the Court of Appeal. A court case is inherently dangerous for both sides, you just never know…

"Do all the objectors appreciate that they are risking their money for the good of the non-objecting minority owners?"
There comes a point where you have to put your money where your mouth is, regardless of the action or inaction of others. You make a stand and go forward, win or lose.

"Some of the minority (and the objectors) have themselves bought alternative flats! So why are the objectors still objecting?"
As far as I know, people are free to own as many homes as they like if they can afford to do so. Buying an alternative flat does not signify agreement to the sale, nor is it a declaration of defeat – the substantive objections to the sale remain. I believe the minority owners who have bought second homes would prefer to rent them out rather than move.

"In the process, the owners who had contracted to buy alternative flats were sued by the sellers of the alternative flats, because of the delay in the completion of the en bloc"
Any owner who buys a replacement unit before completion runs this risk. That is why it is imperative that you do NOT buy a unit if you need to use the sale proceeds for the purchase. Our en bloc lawyer has repeatedly cautioned everyone against this inherent danger and those who buy before completion and then find themselves in this predicament if the sale is delayed (for whatever reason, and there can be many) have no one to blame but themselves. Do not blame others for your own foolhardiness.

"The objector caused much misery to himself and all the other owners."
I believe you are talking about Mr.Yeo from Waterfront View. He had a very strong point to argue and it was unfortunate the ruling went against him. He did not regret his actions. Alternatively, we have Mr. Ken Lee of Airview Towers who went all the way alone and won at the STB and High Court, but lost at the Appellate Court.

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"The Property Market has fallen! At the time that the en bloc process was started, owners were looking at a substantial premium. Now, if Tampines Court is to be tendered out, the price would have fallen"
I find this statement highly amusing. I don't know if the market has fallen significantly, but we'd need to have our own sub-prime woes for it to reach TC levels. Show me an enbloc that is presently going for $260 psf pga! Tampines Court wasn’t sold, it was given away.

I notice how you didn't and couldn't say that 'at the time of sale, owners reaped a substantial premium'. It was a case of now you see it, now you don't. Not quite a case for Hercule Poirot, but definitely 'The case of the disappearing premium'.

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"Developers are looking more at state land sales instead."

This sounds like typical agent scaremongering - developers will buy land whenever and wherever they can. How much state land is left in the middle of mature housing estates? That's the whole purpose of en bloc - freeing up land in choice locations for developers to build more intensely and for huge profits. It's still all about location, location, location. As Mark Twain once said " The reports of my death have been greatly exaggerated." so too the demise of enbloc.

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"The collapse of the en bloc transaction was down to the majority owners’ refusal to accept the developer’s request for an ‘unconditional’ extension of time of the next 5 per cent installment payment due to them"
And all's well that ends well; it was the majority owners who happily scuppered the sale, and the group backing the developer decided it was best to cut their losses – The developer (Bravo)forfeited the 5%.

"Tulip Garden: Kim Eng's Ronald Ooi cuts losses on condo deal" Source Business Times 16 April

In the Finland Garden's case, the deposit was returned to the developer (Bravo) as the STB had not approved the sale. So they win some, lose some.

Amber Glades,….. S$1,140 per sq ft ppr…..Replacement units are available
How, pray, to buy a replacement unit at $1000+ psf ppr when Tampines was sold for $255 psf ppr?*

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*My understanding in this area is not strong; but this is how I estimated:

(a) Estate size = 702,162 sg ft

(b) Sale price = $395,000,000

(c) Developmental charge + Differential premium - $107m

(d) Psf = $395m + $107m / 702,162 = $715 psf

(e) Plot ratio = 2.8

(f) Psf ppr = $715 / 2.8 = $255

(g) Psf pga - $260 (as stated in newspaper reports)

Forfeit

"Some upside in failed en bloc deals"

"It would, of course, be much simpler if the potential units from a large en bloc site like Gillman Heights or Tampines Court were removed from the market.
But this is unlikely as it has become almost a mantra that big developers have holding power, even if they are losing money at the same time"

Business Times 15 April 2008

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You never know which way the wind will blow. It is not entirely impossible that the big developer-buyers will let one of their 2007 acquisitions slide; after all they can pick it up again at a future date through another en bloc (and there could be endless rounds of those). If $600k is considered peanuts to a certain strata of society, then $20m should be coffee money to a multi-million dollar company. You can't hold on to leasehold properties indefinitely. I have not come across a single person in our estate who has bought a new property or is thinking of buying a new property with the en bloc sale proceeds. Everyone is either downgrading to HDB or buying into old estates.

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So if the developer-buyer of Tampines Court is listening - consider giving us up. Come back in another 10 years when large plots of land in booming estates are really scarce and the plot ratio is 4.0. Think of the cost benefits. You currently have Waterfront Waves within stone throwing distance of TC - and 1600 units there to off-load at a price not many mass market potential buyers find appealing. Sales have stalled.

A bird in the hand is worth two in the bush. One project sold is better than two half-sold.

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"Consider wider interests of society, not just economic payoffs"

Source -Business Times 15 April 2008

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EUNOSVILLE

A comment:-

"I'm residing at Eunosville, where we just had the qualifying 75% vote for privatisation. It is indeed very sad. And I must say I was angered by Mr Lau's letter to the forum. Like some people may feel, I think he has no idea what it is like for us. Eunosville is indeed like a kampung. Neighbours' children play with each other and even the adults will stop to chat with each other under the block and while washing their cars. I don't think money can buy you such neighbours, such community spirit." Eunosville resident, 13 April.

Comment on Enbloc and Good Neighbourliness post
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How sad, it looks like the juggernaut that is en bloc will be rolling over his estate soon. Privatisation was the carrot which all the HUDCs bit - they were supposed to upgrade themselves by building a swimming pool, clubhouse etc. Instead, privatisation was just a wolf in sheep's clothing and turned out to be nothing more than a land-grabbing exercise, enforced downgrading, loss of community, a lowering of standard of living, loss of savings (for some) and the most important of all, loss of home. Knowing the hell other HUDCs have gone through, Eunosville should be very careful about how it proceeds. They have better safeguards in place than their forebears (I particularly like the 5 day cooling off period) -and more info at their fingertips.

The law ministry is thinking about tweaking the rules once more - lets hope they listen to the people and not just property agents. You can read about it here.

Of course, new rules and possible amendments to new rules do not apply to TC,

Meet your MP

I just updated the "Meet your MP" link in the sidebar. They have a fancy new website replete with bells and whistles and something new:- you can now email direct to any of our 5 Tampines GRC MPs with your questions/grouses/complaints etc.

Of course, there is also the face-to face approach every Monday, if you so choose.

Harbinger of things to come?

It's wait and see for Pender Court & Tulip Garden Owners"
Straits Times 4 April 2008
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"Makeway View enbloc deal falls through"

01 April 08 | The Business Times by Kalpana Rashiwala

(SINGAPORE) The $162.8 million collective sale of Makeway View in the Newton area to an associate of Bravo Building Construction has been rescinded. BT understands that the one per cent of purchase price paid by Bravo so far has been forfeited. A Bravo spokeswoman told BT yesterday that it had earlier sought payment extensions to ascertain the quantum of development charge (DC) payable. Confirming the move to rescind the sale, she added: 'We decided not to proceed with the Makeway deal as the actual DC turned out to be higher than what we had been told. So the breakeven price would end up being much higher than what we expected. That's why my partner (in the proposed acquisition) decided not to proceedfurther.' She confirmed that the initial information about the DC did not come from Knight Frank, which was the marketing agent representing the owners of Makeway View. The $162.8 million deal for Makeway View announced in early November last year, reflected a unit land price of about $1,583 psf ppr including an estimated $21.5 million DC at the time. Bravo group was one of the biggest buyers of collective sale sites last year, with deals like Tulip Garden for $516 million. Bravo formed separate associate companies for the acquisitions of the various collective sales sites, as the plan was to have different partners for each project. A Bravo associate has so far paid the initial 5 per cent deposit on Tulip Garden, amounting to about $25 million. Tulip Garden's collective sale was approved by STB in late February and the Bravo associate was supposed to have made the second 5 per cent payment shortly after that. However, it requested for an extension on this till early April. Bravo's spokeswoman said her company is seeking a further extension to early June to pay this sum and to also extend the completion deadline for the deal from late May currently to early August. 'We need time to sort out an agreement with our partner and at the same time, sort out the financing arrangement.' Tulip Garden's owners are expected to meet this weekend to decide whether to give the payment extensions. Tulip Garden's price works out to $1,018 psf per plot ratio price (no DC is payable).

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"Tulip Garden enbloc may be called off"
Business Times 8 April 2008
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"Owners say enbloc sale of Tulip Garden has been called off" Owners say enbloc sale of Tulip Garden has been called off

Posted on April 8, 2008 by luxuryasiahome
 

The enbloc sale of Tulip Garden, a freehold development in District 10, appears to be off.

Tulip Garden was sold in July 2007 in a collective sale valued at S$516 million. The property is along the prime Holland Road and Farrer Road area.

Channel NewsAsia understands that owners are now waiting to hear more details from the developer.
Bravo Building Construction bought Tulip Garden at more than S$1,000 per square foot and the sale was scheduled to be completed by May.

However, earlier reports stated that Bravo Building Construction was delaying the completion date and there was some talk that it was trying to arrange for alternative financing.

Some owners of Tulip Garden have already received their share of the deposit for the sale.

According to earlier reports, Bravo Building Construction has called off another enbloc sale – that of Makeway View in the Newton area and is also said to be delaying the completion date of the sale of Pender Court off West Coast Highway. – CNA/vm
Source : Channel NewsAsia – 7 Apr 2008

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"Tulip garden off? How the deal went."
Straits Times 8 April 2008
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"En Bloc market suffers double whammy as investors look elsewhere"
Said Dr Phang: "The long timeline has to be shortened; it's too long, the whole en bloc process. The law allows you 12 months to get 80 percent. And after that, the law allows you 12 months to file the ST (strata title). And when you do, the STB (Strata Title Board) may take short of 4 months or a long time of a year. "Of course not every case is that long but if you look at the historical maximum permissible time, you're looking at something about 2 years plus. And that's a long time to wait for the money. Given the volatile market conditions in Singapore, if it goes up, owners get concerned with replacement. If it goes down, developers (become) concerned. So we should try to manage the timeline and shorten it."

Source: Channel NewsAsia 08 April 2008

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"Property agents in race against clock".

Business Times 8 April 2008

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"Issues of cost, procedures bubble up in new en bloc rules"

Business Times 12 April 2008

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AIRVIEW TOWERS

Decision date: 19 March 2008
(Tan Siew Tian and Others v Lee Khek Ern Ken[2008] SGHC 41)
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What a wonderful written decision! Even though 99% had agreed to the sale by the time it reached High Court - Justice Lee Seiu Kin still judged the case purely on it's point of contention and found in favour of the sole, unrepresented minority owner.

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35 "The plaintiffs also point out that as at the date of the hearing by the STB, the SPs of 99% share value wanted the sale to proceed and only the SP of one unit, representing less than 1% share value, refused to sell. These are compelling arguments indeed but to succumb to such arguments would, in my view, defeat the safeguards put in place by the legislature to protect the minority."

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"it is therefore not for the court to water down the protection afforded by the legislation in its present form in favour of the majority, vast though it may be."

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Weep for joy! Honestly, it does the heart good to see justice prevail against the pervasive 'might is right' mentality.

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The out of control 'purposive approach' has been reined in in clause 25 - at least for those requirements in the Schedule that are time sensitive.

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24 "Sir, the Boards decision will be final. An appeal can be made to the High Court only on a point of law or where there is alleged irregularity in the process.

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25 For this to be achieved it must be the intention of the legislature that where a condition is expressed in clear terms, there can be no scope for the argument that the STB must look beyond the express provision and undertake the onerous task of considering all sorts of submissions of fact and law in order to divine the true intention of Parliament. It cannot be the intention of the legislature that, in respect of any provision that is expressed in clear terms, the STB would be asked to interpret it in any other manner. The STB is not a court of law and certainly not equipped to make a determination on subtle questions of law."

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22 .... there will be adequate safeguards to protect the interests of minority owners. these safeguards are found in the procedures as well as in the substantive powers of the Strata titles Board".

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This is exactly what I was trying to say in a post some time back - that there was no need for the STB to continually abandon compliance of the law and turn its eye instead on its overall 'purpose' as defined by Parliament. Parliament has already defined it's purposes through those very laws and has ratified them one by one. Parliament's intent that enblocs be made easier has not resulted in the elimination of rules, but conversely in their tightening with the very intention that they be applied. The laws are the word of Parliament and the STB should feel comfortable applying them impartially.

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UPDATE 09 April '08: The developer is filing an appeal against the High Court decision

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My musing:

Can a S&P agreement be entered into with less than 80%, less than the majority stated in 84A(1)? Yes - but I still have a bee in my bonnet about this; how is this  right? How can less than the majority conditionally sell the estate, by whose authority? How can a Sale Committee, which has tethered its ratification to 80% (and not less) signing the CSA, have the authority to sell with less than 80%? How can a buyer be allowed to conditionally buy a property with less than 80% approval? Isn't the 80% crucial without which there can be no sale, conditional or not? Isn't it an essential prerequisite? Aren't the less than 80% putting themselves in mortal danger of being sued by the developer-buyer if the SC cannot secure the 80% by the 12 month threshold? Are they made aware of this when they sign? What is the purpose of making a big brouhaha about the exact date the 80% is reached if it is largely irrelevant? If a Sale Committee could theoretically launch a tender exercise anytime during the permitted 12 month period before the 80% has been reached - how many have done so?

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"From the time the minimum 80 percent consent level is secured for a CSA, agents have up to 12 months to find a buyer and submit an application to the Strata Titles Board for an order of the collective sale."

Source - Business Times - 09 April 2008

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So, the public thinks it 80% first then sell

But the reality is sell, then get 80% before the 12 months is up.

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More articles

Poser over homes with 99 year leases
Straits Times 29 March 2008
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Enbloc properties hardly slums
IN HIS letter, ‘Sense of kampung in condos overstated’ (March 20), Mr Lau Chee Kian warned that ‘old estates’ could ‘degenerate into slums like in many countries’. Nassim Park was only 14 years old when it went en bloc although it was in very good condition.

Horizon Hill Towers, the subject of the long running and costly acrimonious dispute now being heard in the High Court, is in pristine condition even though it is older than Nassim Park. Cavenagh Gardens in Cavenagh Road was built in the early 1960s whereas Pacific Mansion in the River Valley area and built slightly later are now around 45 years old and can hardly be considered slums by any standard, being in much better condition than some of the HDB flats only about 20 years old.

Whether an estate would turn into a slum is more dependent on the maintenance rather than age, as the many examples in China, India, Europe and others where some of the buildings are centuries old, have shown. ‘The fact that the majority are willing to sell needs not and does not justify the compulsory sale by dissenting subsidiary proprietors, as the former’s decision could have been misconceived, ill advised, wrongly influenced, etc, and, as it is, turned out to be wrong, because in most cases the price they sold was too low. Dispute, acrimony and ruined lives could have been avoided from the beginning if all those concerned had faced up to the root causes and inherent deficiencies faced in most management corporations.

Bin Hee Heng
Straits Times 29 March 2008
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Condo spirit better than HDB's
 MS SUSAN Prior’s letter, ‘En bloc sales eroding our sense of kampung’ (March 17), about the sense of kampung in condominiums is certainly not overstated. The kampung spirit in condominiums is very much better than in HDB estates where residents hardly interact with each other.

In fact, all en-bloc sales are motivated by greed, worsened by en-bloc speculators who hope to make quick profits by flipping the properties without any feelings for the residents who do not want to sell. It is a load of rubbish to say that enbloc is good for rejuvenation of an estate. In this regard, I would suggest that the Government raise the percentage of approval required from the present 80 per cent to 90 per cent in order to protect the interests of the minority owners.

William Tay Kay Chiak
Straits Tiems 29 March 2008
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No regrets: enbloc buyers that is
I REFER to Mr Lau Chee Kian’s ‘Sense of kampung in condos overstated’ (March 20) in response to Ms Susan Prior’s ‘En-bloc sales eroding our sense of kampung’ (March17). In almost all en-bloc sales, most owners wished they had not sold their homes because they realised too late.

Has no property developer, who has made purchases in hundreds of en-bloc sales so far, ever regretted its land-banking? For confirmation, we should hear from a horse’s mouth, as reported in the Business Times on Nov 15 last year, ‘S’pore home price gains set to slow’: ‘Mr Lim Ee Seng, chief executive officer of Frasers Centrepoint Group, one of the biggest buyers in en-bloc sales, says: ‘We are still looking to boost our land bank, but we are opportunistic and won’t pay current values because our costs would be too high.’ The price gain has helped the developer on earlier purchases of existing apartments, which are sold at a profit. An example is the St Thomas Suites development in the city’s downtown, where apartments were recently sold at $2,189 a square foot. ‘We bought the site of St Thomas Suites at $600 per square foot,’ said Mr Lim in the report. That’s a whopping 365 per cent profit that the Frasers Centrepoint Group has made. That’s why, with their ‘paltry windfall’, the majority owners will never be able to buy a replacement unit. Sad to say, they must regret and downgrade.

Mr Lau rightly points out: ‘The kampung era is long gone. The world has moved on.’ The tremendous advances in science and technology have transformed our way of life altogether, chief of which is changing us from a caring into an impersonal society. Fortunately, Singapore has led in the field of preserving our cultural heritage from being eroded by these negative influences. Singapore has, by and large, succeeded in preserving our core values shared by all in our multi-racial, multi-religious and multi-cultural society. And the ’sense of kampung’ embodied in our core values is part and parcel of our rich cultural heritage.

Admittedly, it is an uphill task to mobilise every Singaporean to imbibe the kampung spirit of yesteryear, but it is not an impossible task. The majority owners in an en-bloc sale cannot be regarded as a litmus test of their view on the ’sense of kampung’. Our uniquely Singapore has, against all odds, managed to accomplish almost everything that we have set our hearts and minds to do - most difficult of all is in uniting a people as pluralistic as Singapore into an almost homogenous nation in just 42 years. And it is a matter of time before the long and tedious process of re-moulding our people into this tremendous sense of kampung camaraderie bear fruits. Succeed we will.

Han Soon Juan

Straits Times 29 March 2008
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That 'earnest' article

En bloc: importance of being earnest

Business Times 27 March 2008

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"New rules can’t prevent fights led by greed but tussles should be less explosive," writes the managing director of Credo Real Estate.

"There were also numerous complaints about how the process was handled, claims of bad faith and the railroading of minority interests."

"Disputes in such sales are not likely to go away, even with the introduction of the new laws, as no amount of legislation can prevent disagreements or actions led by greed or dishonesty."


An article written from the perspective of a property agency - who thinks that all disputes are led by greed or dishonesty. Since it is the minority who dispute the sale before the Board, I am assuming the writer is attaching the greedy & dishonest labels only to them. But that is not what you hear from objecting minority owners at the STB. The litany of complaints against the less than honest tactics of property agents is legendary. Yet the blame apparently falls on the gullibility of owners and not on the unethical behaviours of agents. Agents play a pivotal role in enbloc and a closer inspection of their actions is warranted and certain behaviours ought not to be just frowned upon, but banned outright. There is a right way to go about your business and a wrong way. It's time to stop blaming the victim and go after the culprit.

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Please take note that it was this very same agency that brokered the Finland Gardens sale which was rejected by the STB thus:-

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"The board dismissed the application on the grounds that it found there was no 80 per cent majority and that the sale price was not obtained in good faith.’ (Straits Times)

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To be fair, though, they did also broker Farrer Court - "Smooth Sailing"

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"Among them is housewife Shirley Lee, in her 40s. She was full of praise for Credo Real Estate and law firm Rodyk & Davidson which handled the deal.She said: ‘Everything was so fast and smooth. Such a huge estate is not easy to handle. I’m very happy with the sale.‘They kept in close contact with the residents, gave frequent updates, and made us feel more secure, though it’s a lot of extra work for them.’ (Newpaper - 16 Dec 2007)

FINLAND GARDENS

The next minority STB win to be defended at the High Court will be:-

Finland Gardens' High Court appeal will be heard on the 21 April.
Lawyer for the majority (applicants) will be Michael Huang SC.
Dennis Tan for the minority (defendants).
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Just to recap on this case:
Finland Gardens:
48 unit freehold development off Siglap Road
Land area: 98,309 sqft
Property Agent: Credo Real Estate
Sold: November 2006
Buyer: Sing Holding Ltd for $49.5 Million
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Finland Gardens: Enbloc Sale dismissed : Weekend 01 December 2007 here
STB rejects Finland Gardens' Collective Sale: Straits Times 01 December 2007 here
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AIRVIEW TOWERS

HIGH COURT REJECTS AIRVIEW TOWER'S COLLECTIVE SALE
Straits Times - 26 Mar 2008

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They didn't have 80% - so NO SALE.

What is even more amazing is that the owner was unrepresented!

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Justice Lee Seiu Kin, in his judgment dated March 19, said

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"the 12-month timeline for the 80 per cent minimum requirement is a ’substantive’ condition put in place by the legislature to protect the legitimate rights of the minority."

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The judge ruled that non-compliance with the timeline is not a mere technicality.
He said safeguards were built into the Land Titles (Strata) Act, allowing for the consideration of all objections of minority owners, and other factors.

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‘Timing is important because the longer the process is dragged out, the greater the likelihood that market conditions will change.’

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En bloc details , Sold
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Previous post:-

In late October last year, the STB threw out the collective sale application for Airview Towers at St Thomas Walk.
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The sole, unrepresented minority owner brought his objections to the Board and the Board dismissed the application

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"on the ground that the Applicants had not fulfilled these requisitions under Section 84A (1) (b) read with paragraph 1 (a) (i), in that the subsidiary proprietors of Airview Towers who could rightfully be counted as qualifying to make this application did not reach the requisite 80%."

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Developer Bukit Sembawang Estates Ltd, which had agreed to pay $202.17 million to buy the site in April, said recently that the application had been dismissed on a technicality. They view this setback as a "hiccup" on their website.

The sellers are planning to file an appeal.

14 Feb 2008 update

'In view of the uncertain climate in the property market, Bukit Sembawang said it is reviewing the launch of the two projects - the 102-unit freehold development Paterson Suites and the 123-unit The Vermont on Cairnhill. It is also waiting for the hearing of the appeal against the Strata Title Board's rejection on the collective sale of Airview Towers.Bukit Sembawang had planned to build a 36-storey condominium on the site currently occupied by Airview Towers and an adjacent property. But the Strata Titles Board had dismissed a collective sale application by the majority owners of Airview Towers on grounds of technicality. The hearing of the appeal is set to take place on Feb 19.'

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High Court Appeal Feb 19

Enbloc and Good Neighbourliness

Three letters to the forum page of the Straits Times 20 March 2008 regarding enblocs:

"En-bloc sales eroding our 'sense of kampung"

"Sense of kampung in condos overstated"

"Right to hold property guaranteed by law"

Addressing the three letters in the forum page of the Straits Times, I find myself agreeing with the first two, in parts. The third , actually, I hold in reserve.

It is somewhat hyperbolic to say “enblocs erode our sense of kampung” when we all know that that original sense has long been absent in society. The early relocation exercises tried to keep communities together to maintain those nebulous ties but over the years, the old generation with their old ways gave way to the new generation with their vastly different lifestyles, education and expectations. A very big piece of kampung spirit rested on the shoulders of women and now those women have gone back into the workforce, children are kept indoors, and gates are locked (at least in the public housing sector). We all lament the loss of community spirit and some people at least try to address this problem by getting involved in community based projects. Unfortunately, they are a lot of work for very little return, but even that little return is better than none and so people soldier on. Community based projects work better when they are done on a small scale, for example a condominium can concentrate on the residents in the estate. And for Tampines Court, a community based group called the Tampines Court Neighbourhood Committee (NC) was established some time after privatization. The group comprises of 6 active members (all minority). Here is a list of some of the activities and events (since 2004) that this group of volunteers organized in their free time in order to foster good neighbourliness and community bonding.

Block Parties/Mini-bazaars/DeepaRaya Dinner/Christmas Parties/Gardening Talk /Calligraphy Contest/Egg Painting/Art Contests/FamilyDays/Magic shows/Balloon artists/Henna artists/Comedy Acts/Bingo/Tampines Court Idol/Lucky Draws/Sandwich Making Contest/Toddler races/Sushi making/Lantern festivals/Mooncake Making/ Lantern Decorating contest /Fiesta Nite at Riverview Hotel /Visit to the Lion’s Home for the Elders /Visit to the Jamiyah Home for the Aged /Visit to the Jamiyah Childrens’ Home /Trip to the Night Safari /Day trip to Ostrich farm, fireflies in Malaysia /and finally, their last effort was an Afternoon Tea & Chit Chat.

Tampines Court Neighbourhood Committee was voted the most active NC in Singapore in 2005.

So, what effect does en bloc have on the ongoing efforts of promoting community bonding within private estates? Good neighbourliness does not happen overnight, it takes familiarity and a fair length of time. Well, as evidenced in Tampines Court; it is decimated by it.

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Enbloc splits small communities into pro and anti groups. The anti-group members generally have a stronger sense of community than the pro-group and it comes as no surprise that it is in this group that you will find a greater number of community-based volunteers. The active members of our NC are all minority.

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NC activities saw a sharp decline in attendance after enbloc was announced and the signing began. All along, the NC had had an amicable association with the Management Committee (MC). It was altogether a mutually beneficial arrangement. When the old MC was swept aside at the 2006 AGM, the new MC ,with their strong pro-enbloc agenda, took on a completely different stance. They challenged the very existence of the NC and for a time they were forced to hold their monthly meetings at a venue outside the estate. After the 're-education' of the MC as to the function and role of the NC, the group was eventually allowed to return to continue their resident activities. But things were not as before. The fledgling community spirit that once existed had died. Event planning petered out.

So, what will the NC do in 2008? Well, another visit to an old folks home has been arranged where they shall bring food, music, fun (and Bingo paraphernalia!) to people far more deserving of their efforts. But perhaps, just perhaps, there will be a final attempt at a Mother’s Day event in May.

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The final letter was written by a lawyer who preferred to hone in on the legal and constitutional aspects to home ownership, but left it somewhat hanging in the air, unanswered. I believe the legal aspect was touched upon at the High Court by a minority owner of Lincolnsvale condominium, who claimed he had a 'fee simple title ' (that is, freehold) to his unit and that this was inviolable and therefore "should be immune against proceedings against their property". Justice Paul Tan gave his reasons why this was not so (85 to 90). High rise apartments are basically airspace, and the state "regulates property in thin air"(88). He talks about (89)" the law of property is not really about things but about people.." Owners have rights but with rights comes obligations etc. This is an oversimplification on my part, but read the decision if you can.

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And the constitutional aspect?- well, that's not for me to argue.

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TUESDAY, 25 MARCH

2 more letters today

"Be sensitive to each other": Straits Times 25 March

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"It's our kampung, Mr Lau": Straits Times Online 25 March

"I am saddened by Mr Lau Chee Kian's dismissal of our community at Gillman Heights in his letter on Thursday, 'Sense of kampung in condos overstated'.I am from America and my wife, from Japan. Our two children are both born in Singapore. Gillman Heights is the only home they have known. It has been the best home I could imagine. Mr Lau has obviously never lived in Gillman Heights as I have or, if he has, he has kept himself behind closed doors and locked gate with his curtains drawn and chosen not to be a part of the wonderful community here. Our children run from one house to another, playing with friends. We regularly drop in on neighbours and strike up conversations as we pass each other in the common corridors.Our children have been looked after by all the uncles and aunties here. We and several other families attended the wedding of a daughter of Pak Pandan, formerly a cleaner here. We gossip every day with cheerful Auntie Lim and others at her 'Come Again Minimart' in the basement of our block. Every year, we have been invited by our Malay neighbours across from us to celebrate Hari Raya at their house. We are moving out at the end of March, forced out by the collective sale. We are saddened by this move and will miss our friends and neighbours very much. We hope we will be able to keep in touch, but that is far from the same thing as having neighbours whom one can count on daily for help, advice, and friendship.Singapore has been a great place to live in. Safety, convenience, superb green open spaces and many other things make it a great place to raise children. But it is hard to put down roots when they can be torn up so easily. Communities are living, organic things. They cannot be engineered by governments but need to be cultivated by societies. If Mr Lau's attitudes are predominant in Singapore, then I am sceptical of our chances of finding another place to grow a new community on this island. I hope I am wrong."

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Eric Thompson

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To the first letter: largely poppycock. After considering all sides to the argument over a period of 1 year (the length stipulated by LTSA rules) one must come down to the decision whether to sign the CSA or not. Not signing means you have not been persuaded by the majority viewpoint and have taken a stand against it. You may be perfectly cordial with your majority neighbours, and understanding to a degree - but to meekly acquiesce?

"En-bloc sales at least give you some compensation" and what about those that don't? What about those that give a bare buy price - a buy price that could be 10 to 15 years old and wholly inadequate for toady's market? It all depends from which end of the telescope you are looking through.

"though for the minority who oppose it, it is of no consequence." minority objections are far more complex than a single issue, and encompass a whole variety of personal considerations! Emotional, financial, practical and political.

For the minority to think in "positives rather than the negatives … and respect the views of the majority, rather than accuse them of wrongdoing" The government has given a legitimate avenue for minority concerns to be heard in the form of a STB tribunal. Whilst many may say this has become woefully insufficient as it never seems to be enough to prove their case there - it is all we have got at present. Quite simply, if you view the majority as having done wrong, you don't capitulate, not until matters have been investigated and your concerns addressed and satisfied.

For the majority to "be sensitive to the minority and explain your stand with love and understanding" Ok, I should await someone pushing enblocto come to my door with all the love and understanding he can muster. 'Peace man, I come to sell your home with false promises and without regard to your personal position. Let me show you my love by volunteering my time to undersell your property to the first buyer in the shortest possible time, without doing a valuation. You understand I am doing this in your best interests, I want to relieve you of your burden of having to finance your mortgage and instead make you downgrade where I am sure you will feel much happier." I promise I won't hit him with a frying pan.

"in times of ‘war’ you can at least make your stand as a friend and not as an enemy" . Enbloc wars can be fought in a civilized fashion, perhaps that is what the writer meant. But pretending you are your adversary's friend is hypocritical at best. There should always be room for dialogue - even on this blog I post all comments (save about a handful of distasteful ones), even though they always seem to go round and round in circles :)

BTW: Tampines Court is very peaceful post-en bloc; long may it last.

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To the second letter:

" But it is hard to put down roots when they can be torn up so easily. Communities are living, organic things. They cannot be engineered by governments but need to be cultivated by societies. ". This echoes a previous post of mine about the shallowness of community if people are forced out on a 10 year cycle (see The Wait, November 07).

HORIZON TOWERS

Horizon Towers case back in High Court

THE seemingly never-ending saga of the Horizon Towers collective sale is clearly losing steam.
Two of the nine sets of minority owners fighting the sale have dropped out of the High Court appeal that started yesterday, and even the number of onlookers in the public gallery was noticeably fewer than at previous hearings.
The dropouts - a couple representing themselves and a foreign firm - were not represented in court yesterday.
Minority owners Jasmine Tan and Rudy Darmawan are representing themselves and three others while Mr Quek Keng Seng is representing himself. The other minority owners are represented by Harry Elias Partnership.
Senior Counsel Harry Elias told the court that the $500 million sale price was not obtained in good faith. He highlighted the fact that a higher offer of $510 million from Vineyard Holdings in Hong Kong was not communicated to the owners.
Mr K. Shanmugam and his team from Allen & Gledhill, who are representing the buyers, applied successfully to participate in the court session.
Minority owners are appealing a decision in December last year by the Strata Titles Board (STB) to approve the $500 million sale of the 99-year leasehold Leonie Hill estate.
The on-off again sale has reflected the roller-coaster ride Singapore’s property market has been on over the past two years or so.
The Horizon Towers deal was inked in January last year, before the market shot up. Hotel Properties , Morgan Stanley Real Estate and Qatar Investment Authority agreed to pay $500 million.
But as the market boiled over last year, minority owners felt they were getting a raw deal and tried to halt the sale. They had some success when the STB rejected the sale on a technicality, but that ruling was overturned by the High Court in October. The STB approved the sale in December.
But the once-hot market has cooled considerably since then. Sale volumes have thinned out dramatically although prices have generally held up.
The minority owners are still fighting the sale as they never wanted to sell from Day One. And the sale price of less than $900 per sq ft is still below prevailing market rates, said an industry source.
The hearing before Justice Choo Han Teck continues today.
Straits Times - 20 Mar 2008

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High Court appeal to set aside the order of the STB
Wednesday 19 March and Thursday 20 March
Court 4B at 10.00 am
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The Honourable Justice Choo Han Teck to preside.

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lawyers for some minority owners:
(MICHAEL HWANG) (MICHAEL HWANG SC) (HARRY ELIAS PARTNERSHIP) (CHIA TZE YUNG JUSTIN)

Other minority representing themselves
Vs

Majority/Buyers:
(TAN RAJAH & CHEAH) (ALLEN & GLEDHILL LLP) (K SHANMUGAM SC)
(ANG CHENG HOCK)

"Higher price not negotiated because of 'commission agreement', court told"

Today Online 20 March 2008

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"Horizon minorities say sale was done in bad faith"

Business Times article 20 March 2008

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High Court Written Decision 17 July 2008

Lo Pui Sang and Others v Mamata Kapildev Dave and Others (Horizon Partners Pte Ltd, intervener) and Other Appeals
[2008] SGHC 116

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Right call made
Today - 21 July
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Time to relook en bloc rules
Weekend Today - 19 July 2008
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Another door closes on Horizon Minorities
 

High Court dismisses appeal, says there’s no proof that sale was in bad faith

Minority owners seeking to stop the en bloc sale of Horizon Towers have been defeated yet again. Singapore’s High Court yesterday dismissed their appeal, on the grounds that they failed to prove the sale was done in bad faith and prejudiced their rights.

This decision, coming on the heels of the High Court’s dismissal of an appeal against the sale of Gillman Heights Condominium, marks the second major defeat for minorities here.

The minority owners of Horizon Towers whom BT spoke to said they were still considering their options at this time. But they will soon be meeting to decide if they will take the matter to the Court of Appeal, or start a civil suit to claim for any financial loss - which will be their final recourse.

If they decide not to appeal further, the $500 million sale of the Leonie Hill development to a consortium led by Hotel Properties Ltd (HPL) will go through. It will also mean that the closely watched saga - which has been playing out in the public eye for more than a year - will finally come to a close.

HPL group executive director Chris Lim told BT: ‘We are pleased with the High Court judgment and hope to move forward with the deal as it’s been one-and-a-half years since the sale agreement was inked.’

Justice Choo Han Teck, who presided over the minorities’ appeal, said in his judgment yesterday that the minorities had failed to show that the Strata Titles Board (STB) erred in law in its decision to approve the en bloc sale in December.

The High Court only has powers to consider questions of law on appeal.

The minorities had argued that the sale had been conducted in bad faith. They claimed a better sale price might have been achieved if the sales committee had pursued a second offer from a party called Vineyard, which had reportedly offered $510 million. The minorities claimed the sales committee did not pursue the offer - and even concealed it - because the development’s sales agent, First Tree, was getting a higher sales commission from the HPL consortium.

But Justice Choo said the minorities failed to prove bad faith, as their argument was essentially concerned with whether the eventual sale price was fair - which is ‘a question of fact’ for the STB to decide, and not a question of law for the court to deliberate on.Justice Choo said, if the minorities feel the sales committee had deliberately or negligently not pursued the Vineyard offer, they can pursue a civil claim for the purported financial loss.

He also ruled that the minorities had failed to prove there was a lack of good faith in the way the sales proceeds were to be distributed amongst the various owners. The minorities argued the apportionment method used was unfair because it resulted in penthouse owners getting about 16 per cent less on a per- square-metre basis, compared to non-penthouse owners.

Justice Choo said there can’t be a lack of good faith in the selection of the apportionment method just because it was the only one considered or it led to some owners getting more than others. He noted that the STB had considered the evidence of several experts and it seemed no one method would satisfy everyone.

He added that, even if the STB had deemed the chosen method inappropriate, it would be an error of fact and not an error of law.

He also dismissed the minorities’ arguments that the en bloc sale was unconstitutional, and that the sale agreement had lapsed by the time the STB approved the sale.

Justice Choo also noted the ‘intrigue’ that has surrounded the en bloc sale of Horizon Towers. There have been numerous accusations on the conduct of the various parties involved - ranging from whether the sales committee should have worked harder to get a better sale price, to whether the minorities were only against the sale because the price was too low.‘

The STB was not bound to examine the rights and preferences of each individual subsidiary proprietor and it was not the forum to inquire into the conduct of individual members of the SC (sales committee), or even the SC as a whole,’ Justice Choo said. ‘If the STB were to embark on the kind of inquiry and make the findings the appellants say it ought to have done, the STB would never get its job done within the time limited.’

Business Times - 19 July 2008
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Market news

"Only one collective sale done so far this year"
Straits Times 18 March 2008