Guerilla Tactics II - Quorum, EOGMs and Management Councils

This is a follow up to the post titled Guerilla Tactics. Was going through the Singapore Statutes (Yes, makes for fun reading), and found some interesting bits that have direct bearing on en-bloc sales, especially the START of it.

As I've pointed out before, the first point of contact between any marketing agent interested in offering their services to your development, is the management council. They typically then become the Sales Committee. But to do that, they have to be ratified in an Extraordinary General Meeting.

Did you know the regulations for EOGMs are set out in the Statutes? Look for the Building Maintenance and Strata Management Act 2004, First Schedule. This is of course my understanding of the Statutes, and lawyers (of which I am not) are the best people to confirm this, but unless your management council (MC) or sales committee (SC) are comprised of lawyers, I doubt anyone keeps a close eye on these regulations. But here are some nice bits:-

• A group of subsidiary proprietors (SPs) MUST submit a 'requisition' to the Management Council to initiate an EOGM. Now this has to be done formally in writing, to the MC's secretary.
  
• This group of SPs must comprise at least 20% of the total share values of the development. This approximates to 20% of your total no of owners (Schedule 14(1)(a)). Now this is possible if the SC and friends can get together to create the requisition but say in a development of 100 units, you need about 20 people to initiate the EOGM. In reality, that is often not easy or they don't even bother with this.
  
• Any business conducted in any general meeting (including the EOGM) must be held by the MC, not the SC. The SC can be there, but the chairperson of the MC must be present (or his/her proxy). So if an SC organises an EOGM (not an owner's meeting) which they need to ratify themselves, but the MC is not there, this is illegal.
• The EOGM must be held 6 weeks after the requisition is received by the secretary. (Schedule 14(1)).
• The EOGM needs a quorum or any business discussed there (including agreeing to begin the en-bloc sale, ratifying the SC etc) are not legal. The quorum is at least SPs who hold 30% of the aggregate share values of the development (Schedule 3(2)(a)). Again, this translates roughly to 30% of all owners must be at the EOGM. We're not talking cousins, friends, curious bystanders, girlfriends etc, but 30% of the share holders of the development.
  

In effect, any EOGM that does not conform to the above would be illegal. Which means any SCs that are ratified at EOGMs, any voting to agree to sell the development, all these are illegal if the procedures above are not only adhered to, but carefully logged down. How many EOGMs have you been to, where attendance is taken, names/ICs/share values noted, to gather the 30% requirement?

I've heard of cases where SCs formed by themselves, created by self-interested owners, who then invite marketing agents to come to present to owners, without the say so of the development's MC. Unfortunately, under the current laws, this is allowed. This completely excludes the need of any pro-tem SC to discuss matters with the other owners; they can choose whichever agents and lawyers they like AND THEN conduct an owners' meeting or EOGM to let owners know this is what they've done, now thank them for their hard work. In fact, most agents will tell pro-tem SCs to do that - the less interaction with owners, the more effective the sale process can be, since less information to owners = less chance of issues or contention arising from the sale. That's why most owners complain of a lack of transparency.

But that doesn't mean that if any SC decides to hold an EOGM, they can bend the rules. There are rules to adhere to, and now you know something that can be used at the first EOGM, to make sure the SC cowboys don't come charging guns ablazing. This is Singapore - there's a long red tape to stick to, and by golly, if they are so eager to sell and sell, they need to do it properly! In triplicates! Like obedient citizens!

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