That FAQ flyer

The FAQ FLYER FROM THE MA

Two young marketing agents came to my door yesterday handing out 3 pieces of paper; 1) Letter of rebuttal to the 'Vice-Chairman's undated letter distributed to SPs', 2) Dates of the the next 2 signing sessions and 3) Tampines Court Collective Sale FAQ.

The first was dealt with my an Anonymous commentator in far more succinct terms than I ever could. The second needs no comment other that they obviously haven't gotten permission yet to use the air-conditioned Activity Room for free.
The third throws up a wonderful set of canned responses to the FAQ of enbloc.

(edited/truncated version, answers are in my own words)

Q. How is the reserve price  determined?
 A. The residual land Value Method.*
*Yet when I asked to see the RLV, the MA point blank refused to show me. 

Q. Why should I sell at $1.xx?

A. Because it is a premium price when compared with recent transacted sales. A 50% premium!

The TC record price was $1,250,000 set in May 2013. The fact that a TC unit can command this sum in a good market makes a mockery of the present RP. But why are they even talking about individual unit prices? The RLV on which the RP is based has no connection with individual unit prices. When I ask about apples why are they talking oranges?

MA's Letter of Rebuttal of Vice-Chairman's SP Letter

The MAs Letter of Rebuttal to the Vice- Chairman's undated letter to all SPs 

An Anonymous  commentator has rebutted the rebuttal and laid out the points brilliantly and I hope he/she will not mind if I publish them as a post. 

"From a one time fence sitter (Until today that is)

So Hutton's have come out with an official response to the Vice Chairman's letter, all well and good and they seem to rebut his concerns with clear and concise points.

Except, there is a glaring omission, and a rather large one at that.

Nowhere in the rebuttal does Mr Lian mention the reason he gave to the Sales Committee for the reduction of the reserve price, as recorded in the 'Minutes Of Sales Committee 13th Meeting' dated 28th July 2016, some 12 days ago, and I quote..

MA's FAQ Flyer

A FAQ Flyer was sent out to all owners . Couldn't they have found a more Singaporean-looking family for their front cover?

Alas, it has a disclaimer which prevents me from posting it in full which says:

It asks the following Questions:

• How is the reserve price determined?
• Why should I sell at $1.32m?
• Why nor set a higher reserve price?
• Will the land valuation affect the reserve price?
• Is it possible to get higher than the $1.32m?
• Is a 'down' market the right time to sell my property?
• Is there any legal cost upon signing the collective sale agreement (CSA)?
• Can I get a similar size replacement unit?
• With $1.32m what can I buy?
• Will I have the necessary funds to purchase my next property?
• When will I need to find my next home?

Utter Rubbish from the MA

I have just read the Minutes of the 13th Meeting of the Sale Committee.

I am dumbfounded by the MA's feeble excuse for lowering the RP by multi-millions to it's present farcical figure. 

Here it is:

 "the construction cost of a new development would increase due to the 'Silver Zone' which would hamper movement of heavy vehicles resulting in having to use alternative construction methods"

What utter rubbish! What 'alternative' methods are they dreaming of? Dropping in heavy machinery by helicopter? Having a human chain passing building materials mano-to-mano along Street 11?? 

Look at the present construction of the multi-storey carpark near the round market to see how they dealt with cranes, building materials etc. No problem as far as I could see - those drivers of impossibly long haulage trucks were expert at backing into that tiny road without even dismantling the carpark IU barrier at the centre. I watched them do it one day and was awestruck. A perfect execution that took less than 2 minutes. 

Tampines Court isn't even on a tiny side-road like that car-park. When they knock down TC they will have a HUGE EMPTY SPACE where they can leave a HUGE entrance so trucks can just turn off slowly. There will be no impeding structures, no IU barriers, nothing but open land. 

If that is not enough, then they can do what the new Storage Hub building did just off the PIE  ... have a temporary back entrance to the site. 

POSSIBLE ENTRANCES TO TC BUILDING SITE

The Jewel of Changi

Here is another another reason why Tampines Court deserves a much higher reserve price. We are just 8 MINS AWAY from the next big thing in the east.  We sit on  prime land - lets not give away our jewel for the price of a few beads. 

I hear nothing but negative things about why we should settle for this horrendous RP, the usual gripes. 

Namely:

1. The electrical station is about to blow and owners will be saddled with a $6 million dollar bill to replace it.  

Well, the station was ready to 'blow up' in Rd 1 & Rd 2 and.,naturally, it didn't. If and when the day comes for owners to repair/replace the station then we will not only have 560 units to share the cost but we have a sinking fund as well. That is what a sinking fund is for. SPs should think about topping up this sinking fund regularly and painlessly to keep it healthy rather than fretting about the future.  I would rather fork out $10k to bring our electrical system up to scratch than lose $300k through a misguided enbloc and downgrade to an even older condo (with the same inherent problems) or HDB!  

Vice-Chairman

The Vice-chairman of the Sale Committee is making an extraordinary effort to raise awareness amongst the SPs that the reserve price is set too low. He is going door-to-door handing out a letter outlining his concerns and urging SPs to make their collective reservations known to the marketing agent. They can do this either through the Tampines Court Facebook page or email direct to the SC.

He believes "the RP is set too low for the following reasons:

1. The reserve price originally calculated by Huttons was SGD XXXMN on 14/11/2015. But after shortlisting as Marketing Agent, they reduced it to SGD XXYMN within a month. This was not justified.
2. The basis of reserve price is the "most approximate value of any future development in Tampines Court by the developer buying it. Huttons has assumed selling price of the new development at SGD1100psf whereas based on current prices of similar projects in and around Tampines/comparable locations the selling price should be at least SGD1150psf and not SGD1100. On this basis, the reserve price will in crease by at least SGD 90 million.
3. The estimated sale proceeds of any unit in enbloc sale should not be compared with present selling price of an unit in Tampines Court but with the potential commercial value of the new development and profits to developer from additional built up area based on 2.8 times the existing land area - based on this, each unit should bet minimum SGD1.XXmn"

Well, I applaud this SC member for this tireless and thankless endeavour, he is taking his 'Duty of Conscientiousness' very seriously. It is also a relief to know someone on the committee understands these matters. 

I hope the rest of the committee is behind him and not just sitting on their hands. 

Good grief!

Around 42.14% of SPs have signed the CSA

Do 42.14% really want to downgrade to a HDB or a new shoebox unit? Do they really want to hand the developer all the common property for free? Do they realise that new units are going for $1200 psf and that they are being offered half that amount? 

This is not replacement cost - this is enforced downgrading.


I am getting scared
My enforced choice of future home will be:

I see the old "depreciating asset" and "infrastructure problems" are rearing their heads again (see comments below). Add to that the 'high maintenance fee" and you have the 3 cornerstones of every pro-enbloc argument since the days when the Enbloc King roamed our corridors. 

GLS Website

The URA has a new website design which makes navigating
 GLS sites easier.  It can be found HERE

The CSA Rd III

Just received the CSA today and saw the RP for the first time. I am shocked at how low it is! Does the SC realise that this RP will have to hold it's value for 2 to 3 years until the completion of sale? Do they really believe that this figure will look good in 3 year's time when it comes to replacing our units? Never mind the waffle about 'raising' it later, if you set your sights so low at the beginning, nothing is going to materialise. You won't reach 40% with that RP.

Under 2 Apportionment method for proceeds of sale, it does not actually say what method they used. But looking at the figures it can be deduced that it's the 50/50 method (Share value/Strata area). This is the same method that was used in Rd I and Rd II. The proceeds difference between the biggest and smallest units is only $30k. 

Under 3 SC conducts and controls the collective sale
The phrase 'one or more supplementary contracts' needs clarification.

Under 4 Authorised representatives
'To take any action' is too sweeping. There must be some limits on the SC powers, they cannot be given a blank cheque. We know from experience this can be costly indeed. Our puny sales proceeds would be punier still.

Under 6.3.1 'The completion date of sale' will be no earlier than 3 months after the ...etc
So it is later than 3 months... in other words 'whenever'.

Under 6.4.3  'may also have to pay rent' . I think we can push the SC to negotiate for a nominal rent only. In Rd I the rent was $1.00. 

Under 12.1 'Amendment of CSA' . The phrase 'a non-substantial nature' is highly subjective and open-ended. Better to agree to any amendment at the EOGM and stick to that. 

The good things about this CSA- it is mercifully free of the worst kind of legal jargon and without the menacing clauses prevalent in previous CSAs. Pity they didn't include the marketing agent's workings on the residual land valuation  (if any).

EOGM 3

Caught only the last 20 minutes, so I have no idea what transpired in the main. 

My impression: a small group of dedicated enbloc residents. The Sale Committee and Co. would have been speaking to the converted I imagine. Any protestation would have fallen on deaf ears also. I had no intention of speaking but really, when a resident suggested that the sale committee be allowed to sell below the valuation, well, that was just too much to swallow. The Valuation at time of tender is a LTSA safeguard to protect the minority from an over zealous SC from underselling the estate.  I asked someone at the back who was just there for a look-see like myself if anyone challenged the MA's figures... apparently not. 

Well, as I said - the converted need no persuasion. 

The RP is a pittance any which way you look at it. 

The signing of the CSA began after the meeting, so they have until 24 Jun 2017 to reach 80%. Expect Notices every 4 weeks on the notice board. 

Psf ppr Vs Psf of new units

Let us do a quick comparison between the cost of land to the developer (the price paid psf ppr) and the sale price of new launches (psf) on the SAME piece of land. 

Let us take the newest developments in our area... the Santorini and Q Bay. Hidious developments, to be sure, along Tampines Ave 10. mostly comprising of shoe box units, but that is irrelevant.

First the map:

Q Bay was bought  in May 2012 at a cost of $418 psfppr.
Santorini was bought in Jul 2013 at a cost of $562 psfppr.

According to the URA website the most recent sale price psf is as follows:

So, you see, you NEVER have to worry about the developers ability to profit from their adventures... they always find a way. 

Shunfu Ville SOLD

Shunfu Ville sold for $638m to Qingjian, each owner to pocket $1.78m

SHUNFU VILLE sold for $638 million - with each owner pocketing $1.78 million. This would be considered a very good sale and a job well done by the respective sale committee. 

The newspaper article gives a lot of information but fails to mention the DC/DP. The sale price could NOT have included the DC/DP since $638m/358 owners = $1.78

Looking further down the article it said  "an asking price of at least $688 million or $791 per sq ft (psf) per plot ratio."  

In order for this to be true, then the DC/DP would have to be around $217m (see table)

SO... since the MA is going to try simple math on us poor simple owners come the next EOGM... I have my own simple reverse math to propose (see table).

JUSTICE SERVED

17 MAY 2016

Remember Thomson View?  The enbloc that was thrown out of court because the marketing agents gave incentive payments to 4 owners as an inducement to sign the CSA? 

Two years after the fact, and the CEA have finally fined the agency involved in this shady deal and prohibited them from taking on any collective sale for 1 year. 

MEDIA RELEASE (COUNCIL OF ESTATE AGENTS (CEA)

" The Council for Estate Agencies’ Disciplinary Committee sentenced HSR International Realtors Pte Ltd (HSR) to a financial penalty of $74,000, for two counts of continuing to act on behalf of a client where to do so would place their interests in potential conflict with those of the client, without declaring in writing to the client a conflict of interest. The Disciplinary Committee also imposed a condition on their licence where HSR is not to undertake any collective sale work for one year starting 20 April 2016. 

 About the Case 

2. In September 2010, the Collective Sale Committee of Thomson View Condominium appointed HSR as its marketing agent for the collective sale of the condominium. The Committee comprised eight subsidiary proprietors, appointed to act jointly on behalf of all the subsidiary proprietors for the collective sale. HSR formed a sales investment team to take charge of this collective sale project. 

3. In October 2010, on HSR’s advice, the subsidiary proprietors approved the minimum sale price (also known as the reserve price) of $490 million for the condominium. The Collective Sale Committee also proposed a Collective Sale Agreement, which a number of subsidiary proprietors proceeded to sign. 

4. By March 2011, the Collective Sale Committee received 58.5 per cent consent of the total share value of the condominium. To encourage more subsidiary proprietors to sign the Collective Sale Agreement, the Collective Sale Committee raised the minimum sale price to $580 million in July 2011. 

5. In October 2011, the Collective Sale Committee received consent of 80 per cent of the total share value of the condominium and proceeded to launch the tender. The first two tenders did not receive any bids, and the third tender in August 2012 attracted a bid of $590 million from a purchaser, Wee Hur-Lucrum Pte Ltd. The Committee awarded the tender to this purchaser in September 2012, and applied to the Strata Titles Board in October 2012 for a collective sale order. 

6. In the same month, however, the minority subsidiary proprietors filed objections to the collective sale. The Strata Titles Board then issued a stop order for the collective sale on 14 January 2013. Subsequently, the Collective Sale Committee brought the matter to the High Court. 

In the High Court 

7. In April 2013, during the discovery process, it was found that HSR had offered incentive payments to four subsidiary proprietors to sign the Collective Sale Agreement: 

a. The first subsidiary proprietor was offered an additional 10 per cent of the final purchase price of her shop unit, in exchange for her signing the Collective Sale Agreement for her 10 residential units; 

b. The second subsidiary proprietor, a couple, was offered an additional $185,000 for their unit and their son’s unit; 

c. The third subsidiary proprietor, a couple, was offered an additional $85,886 for their unit; and 

d. The fourth subsidiary proprietor was offered the reimbursement of his wife’s business class return air ticket from Europe to Singapore, so that she can sign the Collective Sale Agreement. 

8. The Court ruled that the Collective Sale Committee had not acted in bad faith. However, the Court found that HSR had breached its duty as an advisor to the Collective Sale Committee by offering the incentive payments. In particular, these incentive payments brought about a conflict of interest on the part of HSR, which led to the agency placing its own interest (to collect the commission) and the interests of the four subsidiary proprietors over the interests of the minority subsidiary proprietors. The Court also ruled that HSR had breached its duty of transparency by not disclosing the incentive payments to the Collective Sale Committee or the subsidiary proprietors. 

9. Since the offer of incentive payments by HSR was a clear breach of its duties and was deemed as an act of bad faith, the Court dismissed the application for collective sale by the majority subsidiary proprietors. 

CEA’s Investigations 

10. The Council for Estate Agencies’ (CEA) investigations revealed that the lead property agent in HSR’s sales investment team had approval from HSR’s management to offer the incentive payments. The intention was to pay out the incentives through the commission from the collective sale. CEA’s Disciplinary Committee (DC) therefore took action against both the lead property agent and the licensee (HSR). 

11. The licensee, HSR, pleaded guilty to the DC on 12 April 2016, to two counts of breaching para 13(1) read with para 13(2)(a) of the Code of Ethics and Professional Client Care, under the First Schedule of the Estate Agents (Estate Agency Work) Regulations 2010. Another two counts of breaching para 13(1) read with para 13(2)(a) of the Code of Ethics and Professional Client Care, under the First Schedule of the Estate Agents (Estate Agency Work) Regulations 2010, were taken into account for sentencing. 

12. HSR was sentenced by the DC on 20 April 2016 and ordered to pay a financial penalty of $37,000 for each count. The DC also imposed a condition on their licence, which will disallow HSR from undertaking any collective sale work for one year starting 20 April 2016. 

13. Disciplinary action was also initiated against the lead property agent who offered the incentive payments to the subsidiary proprietors. However, the agent passed away before the disciplinary proceedings could be completed. 

CEA’s Regulatory Framework 

14. The duties, business activities, and conduct of property agencies and agents in Singapore are governed by the Estate Agents Act and Regulations, which include the Code of Practice and the Code of Ethics and Professional Client Care. These are in place to raise the ethical and professionals standards of the real estate agency industry and to safeguard consumers’ interests. 

15. CEA has also put in place a system for complaint management, dispute resolution and enforcement. CEA thoroughly investigates reported malpractices and takes appropriate disciplinary actions against errant property agencies and agents. Property agencies and agents who breach the Code of Ethics and Professional Client Care are liable to face disciplinary action by a DC. The DC comprises members who are nominated from a disciplinary panel that includes practicing solicitors and other professionals from the real estate industry. "

Marketing Agent Fined $74k for Non-Disclosure to CSC

https://www.straitstimes.com/business/property/hsr-international-realtors-fined-74000-over-thomson-view-en-bloc-bid

Government Land Sale to watch

Tampines 'condo zone' along Tampines Ave 10 / Ave 1 will have a Government Land Sale (GLS) in the first half of 2016 

This is the parcel of land to look out for (Parcel C).

Previous land sales in the area :
http://www.tampinescourt.net/search/label/Land%20sales%20in%20Tampines

EOGM 2

I didn't attend the meeting, but those selected were:

MARKETING AGENT: HUTTONS

LEGAL FIRM: ALDAN LAW

Second Reading Speech by Law Minister K Shanmugam on the Land Titles (Strata) (Amendment) Bill | Ministry of Law

Second Reading Speech by Law Minister K Shanmugam on the Land Titles (Strata) (Amendment) Bill | Ministry of Law

Shunfuville Tender closes

ST Article 17 Oct 2015 - Collective Sales

Gilstead Court COA overturns HC Decision- or BULLIES BEWARE!

Another brilliant decision handed down by the Court of Appeal. 

In a nutshell:

• The High court has no power to change the terms and conditions set out in the CSA after the fact - in other words they cannot first rule that there was bad faith and then 'fix it' so that the sale can go through.  Hurray to that.

•  The CSA cannot contain punitive clauses for non-signatories - because 

 an SP has the absolute right not to sign the CSA, for whatever reason he or she might have. The law still expects that such an SP will be treated fairly...... No SP should ever feel compelled to sign a document he or she does not agree with because of undue group pressure or the fear of suffering penal consequences, whether covert or overt.