Saturday, 30 June 2007

Money or Memories?

In a strike of the hammer (metaphorically), over 600 residents from Farrer Court, some of whom I know and some who have lamented the loss of their flats, are now going into a mad frenzy to find replacement homes. With each getting over $2m for their ex-HUDC flat, it's no wonder other ex-HUDC estates are now getting very active in forming sales committees, pushing for signature collection, attempting to privatise etc all to cash in the enbloc fever before the temperature abates due to possible worries of bubble bursting and/or government intervention. Some have already said that the recent news that plot ratios will remain largely the same (curbing rampant speculation that the government will increase plot ratios to house the additional 2m influx of migrants, and subsequently boost redevelopment agendas) is an early sign that the governmental panadol is going to cool the enbloc fever.

Add to this, more legalistic confusion arises. One estate that has been collecting signatures and received tenders, found out that they had exceeded their 1 year limit. No names mentioned, but the fact is ALL estates hoping to go down the enbloc road have precisely 1 year from the date of 1st signature on the CSA to acquire the 80% or 90% consensus, and then up to 1 year to submit the application to STB. Given that this estate has received bids, but not reached the 80% required to execute the CSA, and has exceeded the time limit, what happens now? Will the developers' bids be nullified and another round of CSA (which surely must happen) occur, but maybe this time with the RP raised, given that it was a value from a year or even 2 ago? Is this a form of cold feet or active 'resistance' to an unfavourable CSA?

And of course, Horizon Towers (you can read about this in the condosingapore forum) is undergoing a yoyo battle over when the mediation for STB is; current date set would exceed legal deadlines which may cause the enbloc deal to fall through. Heavyweight lawyers are hired and guns are on the ready to go off.

Pearlbank Apartment is under threat again, and with the neighbouring MRT land being redeveloped, there's even more pressure to tear down a modern icon of Singapore's past. You can read the International Herald Tribune piece on Pearlbank here.

Finally, a fantastic piece from Prof Linda Lim of U of Michigan which can be read here. Reflecting on the state of collective sales in Singapore, and the tension between place-based sentimentality and economic and urban renewal justification, she has these to say when her mother's flat was en bloc'd :-

Witnessing my mother's experience made me realise that 'retirement at home' is no longer an option for me.

As an economist and business professor whose thinking is rooted in market logic and financial rationality, I do not always agree with policies and financial actions which may be rational only in a particular institutional and collective cultural context. Singapore's current en bloc fever is a prime example of economic irrationality on all sides.

But regardless of the economic considerations and outcomes, one thing is for sure - the destruction of so many homes not only pollutes the environment and tightens short-term housing supply, but also could cause excess supply and loss of property values in the longer term.

It also destroys the sense of home itself, which is much more than an economic phenomenon. As a friend contemplating an en bloc sale says: 'I am torn. It will make me rich and give me financial freedom...But it will also take away my children's memories.'

Money or memories? Perhaps only a romantic expatriate like myself - with values rooted in the Singapore of the 1960s when we were a new nation, and who has eschewed an economically rational decision when it has meant surrendering the ephemeral identification with home that citizenship brings - will choose memories.

I have met Linda when she was in Singapore June 2006 for an Institute of South East Asian Studies talk titled "Singapore: Place or Nation - The Implications for Economy, State and Identity". If the resistance to enblocs (however small, but still about 10-20% of all who are subjected) is anything to go by, there are some owners (Singaporeans and otherwise) who have a strong affiliation to place and treasure the fact that homes are places of security and places of attachment. Geographyer Tuan Yi Fu said it eloquently, when he points to the difference place has for the young and old:-

Place can acquire deep meaning for the adult through the steady accretion of sentiment over the years. Every piece of heirloom furniture, or even a stain on the wall, tells a story. The child not only has a short past, but his eyes more than the adult's are on the present and the immediate future. His vitality for doing things and exploring space is not suited to the reflective pause and backward glance that make places seem saturated with significance. ... Yet adults, particularly educated adults, have no difficulty associating inanimate objects with moods. Young children, so imaginative in their own spheres of action, may look matter-of-factly on places that to adults are haunted by memories (Tuan 1977: 33)*

Are we a generation of adults or youths, able or unable to understand the significance of place over the 'present and the immediate future'? What is the government saying of citizens when they allow the systematic destruction of places that for many are viewed as homes, and not sound investments? Can any blame be cast on Singaporeans, with little sense of place, if they become 'quitters' and pragmatically choose to emigrate? Memories. I choose that anytime. But in current enbloc atmosphere, I go against the majority and am deemed anti-democratic and anti-Singaporean.

How ironic.

ps. Transcript taking longer than usual. Need to get excerpts transcribed! In the meantime, Enbloc List has been updated. Apologies for the delay.
* Tuan, Y.F. (1977). Space and Place: The Perspective of Experience. Minneapolis: University of Minnesota Press.

[Error on permitted time corrected, with thanks to Pariah's comments]

Sunday, 17 June 2007

More Anti-Enbloc Blogs, En Bloc Blues & 2nd Public Consultation

Quite a few items to report this week...

Firstly, several blogs have popped up. It's great to see that civil society and activism is strong and vibrant in Singapore, especially since minority owners have barely any space to voice their concerns and dissent.

Dairy Farm Estate at Upper Bukit Timah has started the en-bloc process, and a group of conscientious owners has set up a blog on their estate, to discuss the prospects of selling their homes collectively. You can find the blog here. Tampines Court has also started an anti-enbloc blog, which they said is better late than never! You can find the Tampines Court blog here. And there's another general anti-enbloc blog started by M Goei. You can find her blog here. (I have updated their addresses on my links page as well.)

Secondly, if you haven't read it yet, the Straits Times have done an excellent SEVEN page spread on the flip side of en bloc sales, which they titled "En Bloc Blues". You can find the articles in the CondoSingapore Forum (Many thanks to Mr Funny for putting these up for readers) as well as sites such as sghousing. Thanks must go to the reporters Joyce Teo, Fiona Chan and Keith Lin who contacted many of us and for putting up a balanced view of en blocs. The various articles are available here (titled "En bloc blues", "Riding the en bloc wave", "Many forced to downgrade..", "This is my home..").

Thirdly, the Ministry of Law has started a second round of public consultation. In response to the 100 over feedback from the public (presumably largely from minority owners and dissenters) from their first public consultation, MinLaw has now started to solicit feedback from the pro-sales folks - property consultants and law firms. Information available here.

Finally, some forums have new discussions on en bloc sales over at Stomp and ChannelNewsAsia. I have likewise updated the En Bloc List (will try to do that on weekends when possible). In the following week, I hope to share an analysis/deconstruction of a transcript and minutes of an EOGM where it is blatantly obvious that majority owners will do anything to force the minority owners into a very uncomfortable spot for their holding out on the sale (and hence the majority's profits).

Monday, 11 June 2007

Acronyms Galore, or What Do Those Silly Short Forms Mean?

I'm getting tired of typing the lengthy terms everytime LOL. So here's a list of short forms or acronyms for readers:-

BT - Business Times
CNA - Channel News Asia
CSA - Collective Sale Agreement (contract that binds all owners, and outlines the terms of the sale. Note it's different from the SPA)
EOGM - Extraordinary General Meeting (needed at least once to consider the sale)
LT(S)A (or LTSA) - Land Titles (Strata) Act (the law in charge of collective sale)
PSC (or PTSC) - Protem Sale Committee (like-minded owners, typically not elected, in charge of the collective sale)
SC - Sale Committee (like-minded owners, sometimes elected, in charge of the collective sale)
SP - Subsidiary Proprietor (or owner of a condo unit)
SPA - Sale and Purchase Agreement (contract that is made between the seller and buyer of the land)
ST - Straits Times
STB - Strata Title Board (statutory board in charge of mediating, approving or rejecting a collective sale)

Saturday, 9 June 2007

Measures to Ensure Transparency - Deconstructing a Parliamentary Discussion

The Pariah sent me a link to what looks like a 'transcript' of the parliamentary discussion around en bloc sale committees and the en bloc process in general, dated 22 May 2006. This was between A/P Ho Peng Kee, Snr Minister of State for Law, and Mr Chiam See Tong, Opposition Member. You can read the transcript here.

The discussion centered around en bloc sale committees (SCs) and the need for transparency, fairness, and accountability ('do not abuse its powers'). Let's take the points raised in this discussion paragraph by paragraph. In no way is this intended to be a direct attack on A/P Ho, but it is meant to open up a space for further debate on what is seriously lacking in the legislation, and on the issue of transparency.

Para 2: "The Board takes all objections seriously and examines them very carefully."
While this is true, the issue here is that the STB is bounded by what the legislation defines clearly as permissible objections - financial loss (defined in a limiting manner), acting 'in good faith' (again, defined in a limiting manner), and being partisan to the redevelopment. Given these tight boundaries, what 'objections' fall through the cracks, which can then be thrown out as legally excluded? Issues of intrinsic value of home, valuation of units that are factored in the original sale price but excluded in the en bloc method of apportionment, aggressive behaviours of SC/agent/law firm, lack of transparency, etc.

Para 3: "the Board had, on two occasions, dismissed the applications because the procedures set out in the legislation were not complied with."
Two out of what must be close to 100 en bloc sales by now, is not a lot. IF, however, one counts how many en bloc sales has to go TO THE STB (ie did not achieve 100%), then the number rises substantially. Has the government or the STB asked (and produced findings) on why these estates never achieved the 100% consent? Note the addition qualifier - "set out in the legislation" - which means there are numerous owners who might have complained about the issues mentioned above, but couldn't because these are not set in legislation. Furthermore, the proposed changes include one which aims to make it such that minor non-compliance with procedures would not cause the sale to be dismissed.

Para 4: "[Requiring the CSA to be signed within 12 mths will make it such that] all owners.. will not be kept in suspense for an indefinite period."
How about all owners being subjected to repeated en bloc attempts, on an almost regular basis? The 12 mth limit to an enbloc process will not preclude SCs from forming again and again. Unfortunately, I don't think the government has a record of how often estates repeat the enbloc process.
More importantly, while I applaud the effort to make the update of the enbloc process accessible to people in 4 different languages, more needs to be done to make the CSA itself accessible to laypeople, not just in different languages, but in everyday English rather than its current legalistic form.

Para 5: "[The proposal to require a general meeting to start a SC] will also serve as notice to all owners of a possible en bloc sale initiative being started."
I think this is the clearest case of where the policy makers are not in touch with "the ground". The fact is that almost all en bloc initiatives are started by a broadcast letter by the marketing agent to ALL owners, requesting them to attend an owners' meeting (or in some cases even a general meeting). Any agent with enbloc experience knows that the initial stage of announcing to all owners in as public a manner (notice boards, registered letters to owners etc) is crucial in getting the prerequisite 80%. Will the EOGM requirement change anything? Not likely.

Para 6: "I expect many useful points [from the public consultation on proposed changes] will be incorporated into the final amendment Bill."
I certainly hope so!! Over 100 feedback was sent to MinLaw, surely that has to cause them to consider some of the problems with current, and proposed, law.

Para 7: "the sale committee is perhaps the most important component in the en bloc sale process."
Absolutely, but posting "minutes of the sale committee.. so that all owners, whether majority or minority, will be kept au fait with the discussions" (Para 8) is insufficient. Anyone in the business world will easily realise that minutes are cleaned up versions of what transpired in a meeting. A transcript might be better, but an even better solution would be to require the sale committee to comprise of both pro- and anti-sale members. Something that Prof Jayakumar suggested but was not seen in the proposed changes.

Para 10: "[the idea of legislating a 1-to-1 exchange] is one area where we should leave it to the owners to decide, because not all owners may want a replacement flat."
Do read Pariah's blog for more details on collective exchange; she's probably the most knowledgeable person in terms of exchange. She points out that the suggestion raised by Chiam is not that everyone must receive a replacement flat via an exchange, but that the option be legislated such that should an owner want a replacement flat rather than cash payout, they may do so. Australia is looking into such a suggestion, as mentioned previously, and perhaps Singapore should consider it seriously too.

Para 10: "I know on the ground that owners who want a replacement, in fact, negotiate with the developers who are buying the property."
Wow. Can anyone who has in fact negotiated with the developers please contact me, so that I can believe this statement?
(a) Most agents don't even bother offering possible replacement flats for displaced owners (ie the investment arm is separate from the residential sales arm).
(b) Most CSAs do not include or build into it the possibility for owners to obtain a discount or first dibs, much less negotiate, with the developers on new units. If it does, it means a much lower sale proceed and that might upset investor-owners who prefer the higher premium.

I would dearly love to obtain a negotiated replacement flat, but was never given that opportunity at all. Those I've spoken to recorded the same situation. The whole issue of negotiating for new units before it is built, or even planned (or designed), is highly complicated, perhaps on par with the process of exchange. Unless A/P Ho is referring to owners approaching the developer/new unit agents and asking for a discount because they sold the land to them. In which case the usual discount would be given, rather than a special one, I suspect. Most sales agents want their commission after all.

Did the parliamentary discussion address the issue of transparency? Only narrowly defined, and certainly not enough to tackle the increasing dissent and frustration over the aggressive machinations of SCs. But for all the points raised above, they are made outside of parliament and it's a small voice in a sea of greed. I can only hope some of the feedback sent by the little people, actually make a dent in the law.

Sunday, 3 June 2007

Re-Introduction to Enblocing Singapore for Newbies

The ST Upfront article by Joyce Teo, "Small Band of Dissenters Fights En Bloc Frenzy" (Straits Times 30 May 2007) was a wake up call to many people who may be stuck in the madness of the en bloc frenzy and not know that there are people out there, in a similar situation, who have been putting up information, and networks, to help minority owners. My blog's one of them. The Pariah's blog is another, and increasingly there are other anti-enbloc blogs set up by specific estates.

So for newbies, what to read?

Firstly, the TOPICS on the right side is a good start for you to pick a subject you'd like to read up on. General subject areas include the Myths, Tactics Against Enblocs. You will find links to Other Blogs and Anti-Enbloc Blogs, as well as letters to Forums in Other Voices. Of use to a lot of people is the "En-bloc List" which contains a list of sold, tendered, undergoing, or starting enbloc estates.

Secondly, the list of LINKS offer a range of information sources ranging from the Statutes to sites with information on the collective sale process as well as property agencies' information on the Singapore property market. There's also links to the various discussion forums (such as REACH from the Feedback Unit) and other Blogs related to Enbloc sales. The CondoSingapore Forum keeps a good record of media postings about enblocs.

Feel free to read. Don't browse. You're talking about potentially hundreds of thousands, if not millions of dollars, involved in this single decision. Take the time to learn what is said and more importantly, what is not said, in the en bloc process. Knowledge is power - while it's a cliche to say this, it does apply to lots of minority owners and people who have been intentionally kept in the dark over their own estate's collective sale. Spend time reading, and feel free to email me at Or the Pariah who is another fabulous fountain of information :)

Good luck, and hope you find what you need here, and importantly, the strength and will to do something about it.

Dr Minority

Myth #8 - Transparency - Advantage to Who?

I've been asked this in an email and thought it's important that this be discussed here - the issue of transparency.

Let me begin with a quote from a recent ST article on minority owners and a side-conversation I overheard: "A consultant's role in a collective sale is to help owners make informed decisions, but 'there will always be owners who, for different reasons, will not want to sell, no matter the price, and we respect that" - Ms Tang Wei Ling, DTZ Debenham Tie Leung.

Now the side-conversation, overheard at The Coffee Connoisseur while sipping coffee. A property agent was seated next to me, trying to persuade his client, over the phone, to part with $4.7 million for presumably a flat or house. He kept on saying to the client, that he is very certain the property's value will increase next week, and wants the client to commit to the sale today. Off the phone, he told his friend (colleague/partner/wife/girlfriend) the client was indecisive and he just had to say something to make the client sign (and hence gain his commission). This includes of course saying things to persuade the client. Now obviously the property value MIGHT increase; we don't know except in hindsight. And if the client commits, he can never know if it'll go up or down. So in a way, he's not telling a lie - just half-truths.

An email was sent to me from someone undergoing an enbloc in her estate. She was frustrated with the lack of information from both the SC and the marketing agent. She said she has to initiate information from the agent and often they are not forthcoming. Often, the SC was not forthcoming and refused to reply to her. How many of you have encountered this situation?

She asks if there's any regulation regarding the issue of transparency. After all, given the DTZ quote above, an agent's job is to help inform owners (ALL of them) to help them facilitate the enbloc sale.

The proposed en-bloc law changes are supposed to tackle the issue of transparency (as stated in the position paper) but whether that will happen remains to be seen. What is the case now is this:-

  • Transparency is not an issue that STB will consider as a matter that can block an en bloc sale.
  • Information is a double-edged sword. The more information you have, the more informed your decision can be. But it also means the more likely you are to ask questions or critique certain things, or be dissatisfied with certain aspects of the en-bloc process.
  • Hence, agents often encourage that transparency be kept to the barest minimum, to minimise potential slow down to the enbloc process from too many queries raised, too many complaints etc. By the barest minimum, it means being around for Q&A during the CSA signing, so that they can persuade you to sign; writing letters to all owners informing them of the stages of the process etc; how much you'll be getting etc. The 'positive' aspects that will push the sale forward. That is their job after all.
  • What don't they tell you? The minutae of the CSA clauses - that's the job of lawyers. And unless you are trained to read legal documents, CSAs are as foreign as doctors' scribbles. Agents and SCs are not likely to tell you, for example, that once you have signed the CSA, you give the SC near-total rights to anything and you can't sue them. They don't tell you that while the RP can be revised upwards (if stated in the CSA) given market conditions, that the SC is under no obligation to do so (to guarantee a quicker sale, rather than a maximum profit). They don't point out what are the other representations that the SC might have heard, what alternative methods of distributions they turned down and exactly why. They don't tell you why they chose a particular method of distribution and be made to defend that choice. All these information may work against you signing the CSA, and selling your unit collectively.
So is there 'transparency'? Only very narrowly defined (and which can be legally upheld in court) in the form of the agents/lawyers being present for Q&A, letters sent out etc. BUT the information given may not be complete so as to allow owners to make "informed decisions", but rather half-truths or worse, withholding information, so that the sale can proceed expeditiously.

That's why you need to read up on en-blocs yourself. Use the information on blogs such as mine and Pariah's, forums, etc to check on information not forthcoming. They might keep such things from you, but that doesn't exclude you from learning on your own.