HUDCs

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Eunosville

Eunosville collective sale tender re-launched
JonesLangLaSalle 

Eunosville re-launched for en bloc sale

SINGAPORE: Former HUDC estate Eunosville has been re-launched for en bloc sale on Monday with the same asking price of at least S$688 million.

Its sole marketing agent, Jones Lang LaSalle, said the 330-unit private residential development was first launched in June 2013 for collective sale by tender.

But interested developers wanted more time to assess the market, after the introduction of the Total Debt Servicing Ratio (TDSR) framework at the end of the same month.

Jones Lang LaSalle said the owners of Eunosville are now hopeful of keen interest from developers this time round, given the healthy number of bidders in recent government land sale site tenders.

With a land area of about 376,712 square feet and with a gross plot ratio (GPR) of 2.8, the site could potentially yield 1,000 units with an average size of 1,100 square feet.

The asking price translates to approximately S$806 per square foot per plot ratio on the potential gross floor area, including estimated differential premiums of S$163 million payable to top-up the lease to fresh 99 years and for intensification of use, subject to approval from the relevant authorities.
The tender closes at 2.30pm on Tuesday, January 14, 2014. 

- CNA/gn

HARBOUR VIEW GARDENS

The Court of Appeal upheld the High Court decision to reject the sale on grounds of bad faith.

Appellate Court decision (15 Nov 2013) here

MA; Colliers

Questions before the court :-

Did the CSC breach its duties under the law, resulting in the transaction not being in good faith? 

46 In our view, the CSC patently breached its duty to act even-handedly as between the Consenting Proprietors and the respondents, having regard to the CSC’s involvement in the manner in which the Additional Payment was offered. 

48 The facts of Allgreen were materially different from those in the present appeal.

51 The CSC also breached its duty of disclosure, transparency and openness.

Did Colliers breach its duties under the law, resulting in the transaction not being in good faith?

52 We also found that Colliers breached its duty of transparency and openness owed to all the proprietors in the Development,

Did the respondents suffer prejudice as a result of the CSC’s and Colliers’ breaches of duty?

Procedural fairness in arriving at the 80% threshold (or, in general, the requisite consent level) is crucial because the remaining minority proprietors would be obliged to sell their properties without having consented to the collective sale if that threshold is met.

In the present case, we found that the process was tainted by elements of non- disclosure and lack of even-handedness on the part of the CSC, with one member of the CSC obtaining the most favourable offer and effectively, the only offer of an incentive payment, at the expense of the other minority proprietors. This amounted to an unacceptable inequality of treatment of the Dissenting Proprietors, and a fortiori, where a member of the CSC was favoured over the other minority proprietors. In the circumstances, the process by which the 80% threshold was achieved had been seriously tainted, and the respondents suffered prejudice as a result 

A final observation 

54 We note that the public tender for the Development was launched even before the 80% threshold was achieved, 

Although para 7(3) of the Third Schedule to the LTSA does not explicitly state that the 80% threshold must be reached before a public tender is launched, it is, in our view, implicit in the opening words of para 7(3) that the requisite threshold under s 84A(1) of the LTSA should be met before the specified modes of sale under para 11 (viz, public tender and auction) can be launched. 

    A DEFINITIVE RULING ON THE 80% AT LAST!   

How does this line up with previous HC decision vis-a-vis the all-important requisite 80%??  Namely the High Court decisions of RAINBOW GARDENS  and REGENT GARDENS
.

Up to now , the requirement was for the estate to have garnered the 80% at point of application to the STB and NOT at point of sale - theoretically  doubling the signature collection from 12 mths to 24.

THIS new ruling has finally moved the goalposts back to their just and equitable point in the process - and not even at the point of sale but AT THE POINT OF TENDER

To a question I put to the enbloc lawyer in TC en bloc Round 1 (6 years ago!): "Is the 80% applicable at point of sale or point of application to the STB?" To which he replied " That has yet to be determined in a Court of Law"

Well, the Court of Appeal has finally made that determination - a day late and a dollar short - but I am happy that at last this prejudicial loophole is now closed.

HORIZON TOWERS

It seems like the Horizon Towers saga was ticking away in the background all this while.

A new judgement just out ; 

Five plaintiffs (objecting minority owners) seeking equitable compensation against two defendants (sale com. members) for breaches of fiduciary duties. 

In other words they want their legal costs fully recovered... costs which run into the hundreds of thousands.

I haven't read it yet - just skipped to the end where it said the judge dismissed the plaintiff claims (ie they lost).

Look for it on the Supreme Court website under recent judgements:

Then Khek Koon and another v Arjun Permanand Samtani and another and other suits - [2013] SGHC 213

or here

Gilstead Court New Row

Marketing Agents BEWARE

 I believe head(s) rolled at the HSR agency; careers ruined, people sacked.  Complaints were made to the Council of Estate Agents (CEA).

The paper failed to point out that the extra payment made to the 6 minority in the Regent Garden case was not about reaching the 80% consensus level, but  payment to withdraw their objection at the STB, thus clearing the way for the sale to go through.

Mind you, extra payments should not be encouraged across the board. The former Supreme Court judge is quite right in saying "It is necessary to outlaw such behavior as a form of corruption, with possible criminal, as well as civil sanctions". However,  it is also ironic that this same former Supreme Court judge is enmeshed in his own en bloc debacle (Gilstead Court) whereby the CSA was fashioned in a way which effectively penalized the minority for not signing the CSA.  Thereby ensuring an unfair distribution of proceeds - the majority get more, the minority less.  It is actually worse than it sounds; taking money from the minority and divvying it up amongst the majority...  read the media report here

THOMSON VIEW

Ngui Gek Lian Philomene and others v Chan Kiat and others - (HSR International Realtors Pte Ltd, intervener)
5 September, 2013 12:00 AM

The  issues:

1. Did the CSC fail in its duties?
2. Do minority owners have the ability to raise objections that had not been previously submitted to the STB?
3. Do offers of secret payments made by the marketing agent to some SPs amount to bad faith?
4. ... not so important

Judgement

1. No

In my opinion, the judge was very lenient on the CSC.  They seemed to be harried and pushed along by the marketing agent and buyer. They didn't act like prudent sellers and agreed to new terms that were 'materially less favourable and not in line with market practice'. Their failure to extend the public tender 'was a breach of their duty to obtain the best price for the Development'. 

And still, the judge did not lay any blame at their feet.

2. YES

Ah, this is the most important issue moving forward. This clause just had to be challenged:-

LTSA 84A(4 ) Where a section 84A stop order is issued under subsection (6A)(b) in respect of an application to a Board under subsection (1) for an order for the sale of all the lots and common property in a strata title plan, and an application is then made to the High Court under subsection (1) for an order for the same sale of all the lots and common property in the same strata title plan, any person referred to in subsection (4)(a) or (b) who filed an objection to the Board (but no others) may re-file his objection to the sale, stating the same grounds of objection, to the High Court in the manner and within the time delimited by the Rules of Court.

'43 Nevertheless, my view is that the Section does not preclude the Defendants from raising the issue of the Incentive Payments. While I accept that the intent behind the Section is to avoid new grounds of objection from delaying the collective sale process, this intention does not extend to shutting out legitimate grounds of objection that could not have been known to the objectors at that point in time.

'45 Accordingly, I hold that the Section does not prevent dissenting subsidiary proprietors from raising a new ground of objection at the High Court if, through no fault of theirs, it became known to them only after they had filed objections to the STB. This interpretation of the Section ensures that dissenting subsidiary proprietors are not unfairly barred on a technicality from raising a new objection.'

So, that's a kick in the behind to those who crafted the Law! They thought they could tie the minority's hands by disallowing the fruits of  'discovery' at the High Court.   But this wise judge said No; the dirty deeds that are hidden at the STB level (and cannot be ferreted out) can indeed be uncovered and brought to light at the High Court.  Amen to that.

3. YES

52.    ...   'HSR  breached its duty of transparency by failing to disclose the Incentive Payments to the CSC or the other SPs.'

54 ........ 'HSR had the prospect of earning commission only if the 80% consent threshold was achieved. In order to achieve that 80% consent threshold, HSR promised the Incentive Payments to certain SPs who, but for the Incentive Payments, would not have signed the CSA. In so doing, HSR in effect promised to reduce its commission. The reduction of its commission would result in the net sale proceeds being increased pro tanto. However, the benefit of this reduction would not be shared by all SPs; the reduction would benefit only the few SPs who were promised the Incentive Payments. The ultimate outcome is that, without the consent of all the SPs who signed the CSA, the method of distributing the sale proceeds set out in the CSA would be surreptitiously departed from. Hence, there was bad faith in the transaction involving the method of distribution of the sale proceeds.'

Gilstead Court Row

'Sure fail' at the High Court! An unfair distribution of sales proceeds!

Blatantly treating the minority owners unfairly? Ignoring their obligation for 'even-handedness' when dealing with minority? Minority owners who are only exercising their right not to sign the CSA? What was this former supreme court judge thinking???

Only options for the SC now are:-

a) remove the penalty clauses on the minority owners. 

b)  pay the minority owners to withdraw their objection at the STB (which is perfectly legal) , but......

Looking at their website and in particular, this page, it looks like they have tied their hands at "willing owners' making ex-gratia payments

Ditto for the purchaser making ex-gratia payments ..

From the Tender Terms:-

Regent Garden .... an estate where the purchaser made ex-gratia payments to the minority to withdraw their objections - and it was deemed kosher by the High Court. 

Thomson View Condo

 Thomson View sale hits a roadblock


This case is presently being heard at the High Court .....

Eunosville first attempt at Enbloc Sale

Today article here

Eunosville seeks $688m in collective bid

Gilstead Court Tender

HARBOUR VIEW GARDENS

This collective sale failed at the High court

... sneaky Compensation/Contribution Agreement paying off 1 owner $200k to reach the 80% was judged BAD FAITH  - and the sale was thrown out .

The Contribution Agreement was in fact two agreements - one agreement between the majority owners and the Marketing agent  and the other agreement between the Marketing agent and the lucky owner. The CSC refused to disclose either agreement to the minority.

Interesting reading - a little wooly perhaps, but interesting all the same.

You can find it for free at the Supreme Court website.. under Recent Judgements

 09 April 2013

https://www.dropbox.com/s/09zshgj78vtrcv4/Harbour%20View%20Gardens.pdf?dl=0

No-go for Harbour View Gardens sale

A PROPOSED $33 million collective sale of Harbour View Gardens in Pasir Panjang Road to Roxy-Pacific Holdings has fallen through.
A High Court appeal by the consenting owners at the project was dismissed yesterday.
The Court of Appeal upheld a ruling by High Court Justice Belinda Ang in April.
She had refused to allow the sale as the Harbour View Gardens collective sales committee "had not acted in good faith" while its marketing agent's conduct was "commercially unacceptable".
The exact reasons for the decision are unknown as the written judgement has not been released yet.
The appeal was mounted by the majority owners, represented by Drew & Napier senior counsel Hri Kumar, who could not be reached for comment.
The Straits Times understands that the appeal was heard yesterday morning and dismissed before noon.
Rodyk & Davidson real estate lawyer Lee Liat Yeang, who was not involved in the en bloc sale or court case, said yesterday that the dismissal of the appeal "is seen as a wet blanket on an already tepid collective sales market".
The freehold development, consisting of 14 three-storey walk-up apartments, was sold to RH West Coast in July last year for $33 million, subject to clearance for the sale. The marketing agent was Colliers International (Singapore).
RH West Coast is a unit of property developer Roxy-Pacific Holdings, which declined to comment yesterday, citing a pending Singapore Exchange announcement on the matter.
The Harbour View Gardens court dispute centred on whether its en bloc sale could go through.
One central issue was a $200,000 inducement that the collective sales committee and Colliers had offered to couple Han Min Juan and Jee Ming Tu to get them to agree to sell their flat.
Mr Han was a member of the committee. Their consent enabled it to reach the requisite 80 per cent majority threshold. However, a few minority owners objected to the sale, saying that the inducement was not paid in good faith.
They also said that the committee had not acted "even-handedly" as the incentive was offered to only one opposing minority owner and not to others.
August 16, 2013 

End of the road for enbloc

From the Minutes of the SC Meeting held on 11 Jan 2013:

As of 11 Jan 2013, 36% of the SPs had signed the CSA. The enbloc exercise has lapsed as it did not attain 80% consensus despite best efforts by SC. The meeting was convened to decide on the procedure on the refund of the en bloc fund.

(details on procedure can be found on the Notice Board)

The Sales Committee recorded a note of thanks to the SPs who have extended their support to the SC for the past 1 year.

Cooling measures

Additional measures to cool the property market

4-weekly Statutory Notices

Shunfu individual unit sells for record $1.33m

SC Letter / Notice of meeting

SC Meeting; 11 Nov 2012

The Final Push

You can never sound the death knell until all options have been exhausted. There has been a fresh injection of hope with an increased RP. A RP that is potentially attractive to about 50-55% of the owners in the estate -  but that is just my opinion. The SC hopes it is enough for 80%.  

Two more signing sessions are penciled in for Nov, and a letter from the SC Chairman on the Notice Board   (The letter has since been removed).

In the News

• Supply numbers do not tell the whole story

•  More Executive units selling for over $1 million
•  MAS restrict loan tenure on residential properties
•  HDB resale oprices rise 2% to record high in 3rd Q
• eCo sees bustling sale at launch
• Green Lodge sold en bloc for $191.888m