Application to STB

Florence Regency Tender Results

7 October 2017

Standoff in Florence Regency en bloc sale amid risk of oversupply in area

6 October 2017

The 3 bidders in the Florence Regency tender have declined to raise their bids or reconsider their terms and conditions. So now the CSC are skipping to scenario 3: look for any buyer willing to sign within the 10 week private treaty window. Good luck there - the bid has to be at least $629m to match the LTSA mandated valuation.

Failing that they will go for Scenario 4; a new tender in Jan 2018 and a new LTSA mandated Valuation at close of tender. 
They have 1 year to make an application for sale to the STB from date of 80% - so enough time for at least one more roll of the dice.

Either way, I think they are toast.


29 SEPTEMBER 2017

No witnesses were allowed at the opening of the tender box

So, this is a case of the Valuation being higher than the RP & all the Bids.  This is a good thing for FR. The Valuation protected them from selling below value and the bidders will have to increase their bids or some other shenanigans will come into play.  They have 10 weeks to play around with this 

And before the comments come in about the 'market setting the value'. that is patently not true. There are High Court decisions which say that the market does not set the value. The Gov does not sell it's GLS sites if the bids are too low and below their valuation.

Hang in there,  FR.

There are a few possible scenarios open to FR, in my humble opinion:

First Scenario

The SC go back to the bidders and ask them to top up their bid to the Valuation. If the difference is not too great then perhaps one will oblige. The sale can be proceed as it does not run counter to the CSA and would be above the RP. 

Second Scenario

None of the bidders agree to top up their bids and the SC then take the Supplemental Agreement route. Since the CSA states that there can be no sale below the official valuation they will have to come out with a new CSA and find a fresh 80% who agree to sell below the valuation. 

This would be an improvident decision; the route of death. The 80% majority can sign for any RP they like but they cannot contract out their obligation to the minority not to undersell the property. The valuation at point of tender is there to prevent such an outcome. 

If. say, the new 80% majority agree to undersell the property then the minority will make an objection to the STB.  I believe the buyer can, with SC permission, agree to top up the difference in exchange for the withdrawal of their objections.  This will probably be cheaper than topping up the difference for the full 100% of owners.
Alternatively, the 80% can agree to compensate the objecting minority from their own pockets.

If the buyer or majority do not wish to top up and proceed with the sale regardless, then the minority will go to High Court. In my opinion, they have a rock solid case for the sale to be thrown out at that juncture. The sale would not be done in good faith with regard to sale price.

The LTSA valuation was set at close of tender as a safety net primarily for the minority.  It is bad enough that one's home is appropriated by one's neighbours, but thankfully, the Law does protect against an undersell.

Third Scenario
A sale with any interested party through a private treaty as long as the Valuation price is met to avoid minority issues. The have 10 weeks to enter into a private treaty from close of this Tender 1 (LTSA Second Schedule 11.-(3))


Fouth Scenario
Hold another tender and/or get another independent valuation? 

Fifth Scenario
One should never underestimate the ingenuity of lawyers and marketing agents to circumvent or twist rules to their advantage. We shall see if any new permutation is born.

Valuation Report for dumb sheep

The registered bundle contained the official valuation report done at close of tender. (TAB 5)

Once again we have been served with a worthless document high on words and devoid of any actual computation or 

We still do not know on what basis the RP  - or even this particular valuation - was derived. There are no calculations, no information on which sites it based it's comparison method of valuation. This Valuer didn't even include such basic information such as plot ratio. It gives the Total Strata Area as if it were important. The Total Strata Area (the 560 unit area) is not part of  any calculation determining the RP. It is only used when determining the sales proceeds/unit.

Indeed, I queried the MA* (see update below) at the second session of the 2nd SP Meeting whether the Valuer used an existing plot ratio of 1.71 or 1.55 (as shown on the MA's price analysis slide) and he couldn't give me an answer.  Did he not think to ask? Did he not want to tell? Well, this valuation doesn't give an answer either.

So, if the valuer used the estimated existing plot ratio of 1.55, doesn't it follow that this valuation is also just an estimate?
If so, then what is the true valuation when the correct development baseline is used?
How are we to know whether the correct or estimated existing plot ratio was used in this report?

" For the purpose of this report, the Direct Comparison Approach is adopted to determine the open market value with the Residual Approach as cross-check'

Properties considered in it's direct Comparison Approach: NONE LISTED
Residual Approach crosscheck: NONE GIVEN

Was our SC sleeping at the wheel again or did they even think to ask for the RLV. Shame on them for delivering us such an insubstantial report. In this day and age of informed owners - we deserve better.  This report should have been thrown back in their faces. 

This 'independent' Valuation was the last chance to see how TC was valued, and it failed miserably. The majority are happy with an unsupported RP and the sales proceeds from the sale.

I have said it before and I'll say it again - the sale is unstoppable regardless of all the mis-steps, bloopers, stonewalling and non-transparency. In the end it is typical of most collective sales with only a tiny minority of people who actually care about the details.

Alas, the residual land valuation should not have been a detail hidden from owners since day 1. It is the cornerstone of a collective sale.  The reason why it was such a guarded secret, never to be revealed, was because we 'simple' owners would then become 'informed'. Marketing agents do not like informed owners, it makes their job so much more difficult.

UPDATE 
Looking at the STB website and the Form 21 for Application for the purpose of a Collective Sale:-

So, the MA has to furnish supporting evidence and details on CALCULATION .. in other words the Valuers RLV...... to the STB. So how could he claim ignorance of the baseline plot ratio used?  He must be in possession of the full calculation if he is to make a proper application for sale at the STB. 

How could he have stood there and tell me he didn't know?

Braddell View

Oct 2017

Sep 2017

Notice of Sale in newspapers

Notice of proposed Application of Sale in newspapers dated 18 Sep 2017

Braddel View Enbloc

Braddel View to join the collective sale scrummage

Just Waiting

There's nothing to do but wait for :

1) the advertisement* of the particulars of the sale in the local papers followed by
* 4 daily newspapers on Mon 18 Sept, 2017

2) the  notice of the collective sale (a large bundle of documents) sent to each owner by registered post. These will include the CSA, S&P, Valuation Report among other things

3) minority objectors have 21 days from date of notice for collective sale to make an objection at the STB.

4) the Application* for sale to The STB within 14 days of the newspaper advertisement.
* 22 Sept 2017

5) wait 60 days or less for the STB Approval or Stop Order from date of first mediation

6) wait 3 months from XXXXXXXX (we have been given the runaround on this)  for completion of sale and money in your bank

7) stay for 6 months if necessary to prepare to move out.

CAVEATS
A comment below said they he/she had received a letter from the SLA informing them that a caveat had been lodged against their unit.

What is a caveat?
A caveat is a legal document lodged with SLA by a purchaser to protect his/her interests after an option to purchase is exercised or a Sales & Purchase Agreement is signed

This is normal practice as the buyer has a caveat-able interest in the majority units. The buyer should not, however, lodge caveats against the Minority units until such time as the STB approves the sale.

Note:   As of Thurs 8 Mar 2018, no caveat has been lodged on my unit. The CSC has sent in a Notice of collective sale and that is reflected in MyProperty details - but the Buyer has not lodged a caveat on my minority unit to date.

Pines Grove 4th/3rd? Enbloc Attempt

Straits Times 14 Sep 2017

STB or High Court for '0.25% or $2000, which ever is higher'?

NO RENOVATION COSTS FOR OBJECTORS AT STB

 The confusion lies in the subtle difference in the 2007 & 2010 LTSA Amendments

SSD Issue & the masses

Interesting question on the FB -

I am interested in the answer.

Looking at the actual Declaration Form, it does seem that all owners need to sign it in front of a lawyer. Only those actually owing SSD are required to submit to the IRAS - the rest only need to be submitted if the IRAS requests them for audit purposes.

Strata Titles Board Application (STB)

My understanding of what's in the works:-

The Team has said it will make an Application for Sale to the STB tentatively on 22 Sep 2017

They have quite a lot of paperwork & procedure to do (I won't bore you with all the details) but one of the requirements is to place an Advertisement  of the particulars of the Sale in the local newspapers.  The Advertisement must include:

(i)   information on the development ie name, land lot number & address

(ii)   brief details of the sale proposal

(iii)  the place at which the relevant parties can inspect the documents for the collective sale

They then have to serve notice of the collective sale - a huge bundle of documents - to each owner by registered post. The bundle must include:

(i)  the advertisement referred to above

(ii) the collective sale agreement (CSA)

(iii) the sale & purchase agreement (S&P or SPA)

(iv) a statutory declaration made by the purchaser on his relationship, if any, to the unit owners

(v) the valuation report done at close of tender and;

(vi) the report by an independent valuer on the proposed method of distributing the sale proceeds.

The CSC must make an Application to the STB within 14 days of the Advertisement and lodge a copy of the Application at the Singapore Land Authority (SLA).

The Thorny SSD Issue

The SSD Issue:   About 49 SPs face paying Sellers Stamp Duty since they all bought their units after 22 Aug 2013. They may have known they would be liable to pay, but not how or when. Those at the meeting on 25th Aug 2017 were shocked to find out that the SSD is due 2 weeks after the Date of Sale of Tampines Court. In other words the due date is Tuesday 5th Sept 2017  (not next week as I incorrectly posted earlier- woohoo, I have 1 more week of holiday before going back to work on the 4th :)). To the left is a table of the 49 owners with caveats lodged since 22 Aug 2013 and how much they approximately owe. 

The penalty for late payment is punitive: 100%-400% of SSD owed :

No forewarning was issued to the affected owners and they are in a quandary as to how to pay such huge sums at such short notice. All SPs need hand-holding in a collective sale and that is why we pay high fees to the 'professionals' so that they take care of the details and tell us what, when, how and where to do the necessary.  They failed on the when, how and where in this instance.

Today the MA has come out with the following on FB:

Some of these owners are flippers, to be sure, but some must be genuine home buyers and I don't believe we should throw anybody under the bus in the rush for riches. I am glad the MA will help these owners in their quandary and get them either a delay in payment until their sales proceeds come in or payment by reasonable instalments. I have it from good authority that the latter is do-able.

5 Sep 2017
Anonymous said:

Rec email confirmation from IRAS SSD payment is deferred till SALES ORDER date...today is the deadline to request for deferment,..i reckon most if not all the owners who are affected by the need to pay seller stamp duty have done the e-stamp and have written to IRAS to request for deferment...another hurdle down..

SP MEETING 25 Aug 2017

I attended the above meeting and stayed for the two sessions. There were 2 sessions because too many people turned up for the first and the second was held for the overflow. This post is just my own summation - not verbatim as to what was said. 

Huttons started with a powerpoint presentation of their Feasibility Study of TC. I am not going to go through everything just some highlights.

• 39 parties collected the Tender Document, Investment Memorandum & Feasibility Study
• 7 Site inspections were conducted & 11 presentations

They listed 7 Negatives about the estate - the size of the new development, the 5 yr development timeframe (which to me, is not a concern as it applies to every single development in Singapore), possible DC increase in Sept, Height Restriction, Traffic restriction (oddly he linked this to having to build larger units), Higher construction costs and finally the large number of Minority. 

They listed 4 Positives about the estate - cheap compared to other collective sales, Tampines is a mature estate, Convenient to Tampines Central & Amenities and finally, no other launches in the area. 

Official Valuation Report at Close of Tender 

United Valuers and the market value of the land as of 15th Aug 2017 was $940 million. 

We didn't see the Valuer's workings (RLV).

Sale Price Analysis Slide

• The Differential Premium (DP) was $$243,724,555
• The Lease Upgrading Premium (LUP) was $115,000,000

I noticed they gave the existing plot ratio as '1.55 (subject to confirmation)'.

THIS IS HIGHLY SIGNIFICANT! 
At the 6th SC Meeting held on 12 Dec 2015, Colliers International was one of the shortlisted marketing agents. They said the following about the baseline plot ratio:

So.... if the baseline plot ratio does indeed turn out to be 1.71 then Tampines Courters are being shortchanged! No where does it say that the  sales proceeds will be increased!

The Sales Proceeds for each unit is pretty much the same as in my table. You will get the official figure next week in a Letter which has already been sent out to all owners.

The Timeline
Everyone is interested in the Timeline. The CSC has the intention to make an Application to the STB within 1 month. I hope they won't mind if I just insert their slide ... it's easier pictorially than in writing.

So, tentative date of Application is 22 Sep 2017 (end date should be 22/8/2018)

The Retention Sum is $50k. The Buyer will return the $50k to you when you hand them your keys on vacating your unit. The MA advised owners not to buy a new property until the order of sale from the STB. This is sound advice - unless of course you can afford to own 2 properties at the same time.

The MA also said that Huttons would assist owners in finding new homes for free. So no Agent fee if you use their services. I have since found out that this is the normal market practice. The Buyer does not pay gent fees, the buyer's agent will get his commission from the Seller or share the Seller's agent commission. 

Next up was the lawyer and the Letter in the post to all owners (you should have it by Wed).

Sellers Stamp Duty (important if you purchased your unit on or after 23 Aug 2013)

You are liable to pay varying amounts of SSD by 5 SEPTEMBER 2017. All affected owners have to pay including Minority owners.

I feel they are very slow in getting this information out, especially as their 'Letter' wont arrive until the middle of next week. The penalty for late payment is 100% -400% and the quantum is quite huge. This is a huge disservice to the approx 48 owners who fall under this category. The CSC have not served them well. The amount of SSD payable in the letter is incorrect - so beware. The legal firm has offered 'legal or administrative assistance' on the payment of SSD, for a fee! Crikey! They give very little warning to SSD owners, get their SSD payments wrong and have the audacity to charge for their service!   So get your skates on and approach the IRAS to see if you can get special consideration such as paying in instalments or whatever.

There was an audible shock in the audience when the payment date for SSD (5th September;) was announced.

The Lawyer said that if an owner didn't pay, then the amount would be deducted from the sales proceeds. This is worrying as the penalty by then would be 400%! Imagine if you owed 250k in SSD and got the shock of your life when they deduct over $1m! Though he did promise that there would be no penalty. How can he manage that, I wonder? Was it a slip of the tongue or can all SSD owners now sit back, do nothing and pay at the end? This needs to be clarified.

I am not a SSD owner, I have no sympathy for the flippers but a genuine new owner caught out by this deserves attention.  

Other issues you can read for yourselves next week.

The Sales & Purchase Agreement.
He didn't go through it clause by clause but instead highlighted salient points and scrolled through the rest.

You will have to wait for the STB 'Bundle'* to view it - nothing shocking stood out. The usual conditions; I don't know why they spent 1 week hammering them out.

• 6 months to vacate
• $50k retention sum
• No rent for the 6 mths
• Owner pays maintenance fees
• Management & Sinking Fund to go back to the Owners after auditing by the Buyer. This is Law so it's not really a condition. I am not sure if the Buyer doing the auditing is a concern, I don't know the market practice for this. 
• Something about Owners to remove furniture on vacating (only to pile up at the dustbin centre like a mountain). You can take light fittings and the aircon with you ... I believe. 

Can't think of anything else at the moment...

Bundle*:- LTSA Frist Schedule: 

1. e) serve notice of the proposed application on all the subsidiary proprietors of all the lots and common property in the strata title plan concerned and, if applicable, on the subsidiary proprietors in reversion of the leasehold estate in the lots, or on all the proprietors of all flats in the development concerned, as the case may be, by letter by registered post notifying everyone of them of the proposed application accompanied by a copy each of the following documents, and stating that copies of the documents may also be obtained from the marketing agent or the collective sale committee:

(i) the collective sale agreement referred to in sub-paragraph (a);


(ii) the sale and purchase agreement which is to be the subject of the application to the Board;

(iii) a statutory declaration made by the purchaser under the sale and purchase agreement on the nature of his relationship (if any) or, if the purchaser is a body corporate, the nature of the relationship of every one of its directors (if any), to any subsidiary proprietor of any lot comprised in that strata title plan or any proprietor of any flat in the development, as the case may be;

(iv) the advertisement referred to in sub-paragraph (d);


(v) a valuation report from an independent valuer on the value of the development as at the date of
the close of the public tender or auction; and

(vi) a report by an independent valuer on the proposed method of distributing the proceeds of the sale due under the sale and purchase agreement; 

Developer Plans for TC

http://www.asiabuilders.com.sg/news/155085/sim-lian-plans-over-2-000-units-at-tampines-site

My Sales Proceeds

So...... "How much am I going to get?"

Here is my attempt at doing the 50/50 Method of Apportionment. I am not a Valuer so it is UNOFFICIAL and just for my own amusement and because I like to do my own checking.

First, a few details:
Total Floor Area = 87,988 sqm (according to Huttons)
Total Share Value = (560x4) = 2240
Sales Price - $970,000,000

*Offiicial column added on 29/08/17

Collective Sale Costs & Expenses to be deducted from sales proceeds:

1) Marketing Agent Fee: 1% + GST

2) Legal Fee: 0.28% + GST

3) STB Fee: ($35,000/560) = approx $63 

4) Disbursements (photocopying etc): TBD

How To Check Your Floor Area

Everything is online and it is free to search for your own property details.

My Property details look like this:










How To Calculate Your CPF Refund
I am not going to wade into the Bank - CFP refund area. You can work that out for yourselves.
CPF refund rules changed on 01/01/2013 for those over 55yrs.

In general: The amount of CPF utilised towards the purchase of your property has to be returned to your CPF Ordinary Account, together with the accrued interest. Check your CPF Account

CPF WEBSITE

How to Calculate SSD (Sellers Stamp Duty)
SSD Calculator:

https://www.iras.gov.sg/IRASHome/Quick-Links/Calculators/
https://www.iras.gov.sg/IRASHome/Other-Taxes/Stamp-Duty-for-Property/
https://www.iras.gov.sg/irashome/Other-Taxes/Stamp-Duty-for-Property/Working-out-your-Stamp-Duty/Selling-or-Disposing-Property/Seller-s-Stamp-Duty--SSD--for-Residential-Property/
Singapore relaxes SSD rates (Mar 2017)
IRAS e-tax Guide Stamp Duty (seventh edition)

From the REALIS website and Tampines Court Resale Transactions:

• 48 units changed hands between 10/12/2013 and 26/05/2017. These would be liable for SSD. 
• 5 units@16%,  21 units@12%,  16 units@8%,  6 units@4%.  

That's between$68k-$278k give or take! The 5 most recent sales escaped the punitive 16% bracket as they fall under the new rate of just 12%.

Today, I called the IRAS and the guy on the phone said the SSD needs to be paid 2 weeks from S&P. I told him there was zero information about SSD payable in Collective Sales on the website.

From a reliable source:

Those who are required to pay SSD will receive letters from the IRAS in due course They will be asked to settle within a stipulated time frame. There's nothing to worry about as they can always appeal for the amount to be paid in instalments."

I would say: CONTACT THE IRAS NOW as the SSD is due 5th SEPTEMBER!

The Retention Sum Until Vacant Possession
Owners will have 6 months to vacate their units upon legal Completion of Sale. The Buyer will retain $50k of your sales proceeds until you hand over the keys.

After paying off:

• SSD (if applicable)
• Collective Sale Costs & Expenses
• Outstanding Mortgage Loan Amount 
• Mortgage loan Pre-Payment Penalties
• CPF Monies Utilised & Interest Accrued
• Other costs (eg property Tax, Maintenance fees etc)

Some owners might suffer what is called a 'Shortfall'  - in other words, they might not have enough money for the $50k Retention Sum. I talked about this 10 years ago here  & here 

They will need to pay this sum in cash if no provision is made for them.

TAMPINES COURT SOLD

    Our Beloved Estate has been SOLD   

       S&P Conditions unknown       

To the happy Majority - you got here at last. Mostly by luck if truth be told. It is not over yet, there are still some hurdles to cross but it looks like your dreams will indeed come true. 

 To the sad Minority - for 10 years you have warded off those who would sell your home from under you. Your sentiments and sense of injustice is not assuaged by the talk of money. Your Home is sacrosanct and full of memories. It is not over yet, there are still some hurdles to cross, some of you might make an objection at the STB, but I feel it might be futile. My condolences to this group of owners.

To the neutral Minority - You did well to stay out of the fray, keep to the sidelines and be true to the notion of neutrality. Sell or Stay makes no real difference to you. It is not over yet, but you will probably do the sensible thing and wait for STB approval before buying another home.

http://www.straitstimes.com/business/property/sim-lian-bags-tampines-court-for-s970m-in-biggest-en-bloc-sale-here-in-decade


What is this CSC member talking about?

Why do people NEED to sign after the deal is closed? Either it is closed or it is not. The Law requires 80% only and even if they get 99% it will make no difference to the timeline. So, CSC... is the deal done or are there outstanding conditions that need fulfilling?  It is indeed frivolous and unnecessary for Minority owners to sign now. It will not hasten the process and only binds them to costs should the deal be abandoned later. I have no intention of signing and I do not like to be given false reasons to sign. So, I ask this CSC member... why is there a NEED?

His reply:

So, there is NO NEED after all as the deal is indeed signed and sealed. The Buyer is brimming with confidence as he just signed a near billion dollar deal - no sign of a wobble there.

So - in order to counter this FAKE need let me say:

a) The money will not come any faster if the present majority is increased.
b) New signatures will have no effect on the process and serves no purpose. 

c) New signatories will give up their rights for no reason whatsoever.
d) 100% consent is impossible

Tamines Court Bagged

TC Clinched for $970m

Florence Regency up for Collective Sale

Worse Case Scenario possibly unfolding - alas, just FAKE NEWS from TOP HUTTONS REP!!!

It looks like our ex-CSC member / Huttons Top Rep / ex-TC resident is about to spill the beans on the Terms and Conditions of the S&P on her website here. 

She bills them as "Mystery Conditions" but leaks that 'they need 80% of the owner's signature again'

AGAIN! The horror! This is the worse case scenario if it is true. It could be a typo error on her part as her website is full of grammatical errors (a great website none the less), and she was entirely wrong about TC Rd 1......  but if I take what she has written literally then...

Does this mean that the Sales Price has gone below the RP?  Will the CSC be asking owners to sign again for less than $1.7m/unit? Will our estate be sold for a pittance? Are we following Shunfu and their yo-yo RP (though we'll be the losers in the end)? Did the $1million bidding fee follow market practice or was it to scare away potential bidders? 

In which case the power now lies with the Owners to accept the Sales Price being offered and the conditions along with it. Good Grief, please say No! We can always go back to the drawing board, and go through the stages quickly with a more competent team. This is not the last chance saloon. I warned of this again and again 

What does she mean by 'One Final Signature needed to make En Bloc history'??

Turns out this is FAKE NEWS from a TOP HUTTONS REP! 
Tracy G. is a 'Senior Division Director of Huttons Real Estate Group. 
She was the recipient of the Top Producer Award 2016
She sold her unit(s) before the increase in RP
She is registered with CEA as a Huttons employee

The CSC has come out with a disclaimer on their FB page
They also claim she has left Huttons. This fact is not reflected in her webpage nor the CEA- so it must be pretty recent.

Storm in a tea-cup -- but a total lack of professionalism being shown here.
A case of sour grapes, perhaps?