Sunday, 22 July 2007

Who Needs a Pro-Tem Sale Committee?

In an worrying twist to the en bloc madness, I witnessed over the weekend a troubling new incident. Now, traditionally, to begin the en bloc process, the following stakeholders are involved in the following sequence :-

  1. Step One: PTSC - Group of like-minded subsidiary proprietors (aka owners) get together and commit to the task. This is the pro-tem sale committee (PTSC) which need not be voted in or nominated.
  2. Step Two: Agent - The PTSC contacts property agents (typically real estate investment division) to draw their attention to the estate, and to ask them to give presentations to the PTSC.
  3. Step Three: Owners - The PTSC nominates the most suitable agent to present to the remaining owners and begin the CSA.
I went to an agent presentation this weekend, in an estate in District 10, one of the few remaining super prime estates near numerous conveniences (embassies, up and coming eating places, schools, national park etc), and the above order is reversed. In other words:-

  1. Step One: Owners invited to agent presentation. Agent obtained information on SPs on their own accord (this was found out quickly when not all SPs received the invitation letter).
  2. Step Two: Agent encouraged those SPs present to nominate them as their en bloc agent.
  3. Step Three: Agents then begin the process of soliciting PTSC members.
What this means is that the agent actually went into an estate, without any official invitation by any SP at all, to offer their services, make a presentation on selling the estate collectively, and then asks owners who would like to form the PTSC.

The key word here is "without any official invitation by any SP". Has the Wild Wild West expanded its frontier again in the story of enbloc madness? Can any agent go into an estate now, particularly one in a prime location, and present themselves as a suitable agent for the SPs?

Technically, yes.

The law is so open about the protocols for starting en blocs that nothing prevents this from happening. In fact, nothing can stop any number of agents (typically citing that they have X number of developers they're in talks with, who have expressed 'deep interest' in the land) from going into an estate uninvited, unwarranted, and give their sales pitch. Again and again. Without any invitation by any SP.

This brings new meaning to "representing the interests of all subsidiary proprietors" when they begin the process without any SP in mind at all, or without their permission. It certain indicates strongly that this is a self-serving agent who has taken the term "proactive" to a whole new level. And with such an agent, how can any owner be assured that they will be sufficiently represented, or their assets protected from any unscrupulous methods or tricks that an agent might do?

We're not talking about some chap putting a leaflet under the windscreen wiper of your vintage Rolls Royce when it's parked outside. We're talking about a guy walking into your home unannounced, saying he's interested in your car, he has your details, no need to testdrive he's already checked it all out, and claiming he has several buyers interested in it. Just agree to him being your sole agent and he'll sell your car for you, whether you wanted to or not. The buyer will of course pimp it up (or in mrbrown's term, zhng your car).

My good friend who stayed in this estate felt very angry about this whole deal, and especially violated by this agent who came into the estate without permission and started talking about selling it all off.

If the law does nothing about this, I fear more agents will be attempting the same trick in hopes of securing that juicy agreement that will fatten their coffers courtesy of a successful en bloc.


Anonymous said...

Dear Dr Minority,

Thanks for highlighting and bringing to our attention this particular disturbing development in the enbloc madness. I am not surprised if this is not already happening in other potential enbloc estates. Thank you for your post. It is good that we can now on our guard, know what to look out for and will be more vigilant against such unscrupulous agents.

Thank you.


Anonymous said...

Nothing and I mean NOTHING! will stop this little red Juggernaut from reinventing itself!

Anonymous said...

actually, there is one thing that might stop it - the government :)

The Pariah said...

I totally agree that something needs to be done to stop this harrassment of owners in their own homes! If Singapore can pass a Spam Control Act (came into effect on 1 July 2007) to curb harrassment via SMS and e-mail, what more of this?

Perhaps the council members of The Singapore Institute of Valuers and Surveyors (SISV) are UNAWARE of such rampant misconduct by members of their profession. Whilst not all marketing agents are accredited members of SISV, there will invariably be a few senior people within such property consultancy companies who are accredited members.

Regardless of whether the specific individuals who carry out such harrassment are accredited members of SISV, their conduct amounts to the proverbial rotten apple that taints the entire barrel!

I'd urge all and one to be proactive and Just Do It ... inform SISV of such specific instances. The President of SISV Council is none other than Dr Amy Khor, Senior Parliamentary Secretary of MEWR! Hopefully, SISV will see the light of day and develop a Code of Ethics for their industry and find some way to close the loophole such that all agents must be an accredited member and tie-up with REDAS (Real Estate Developers' Association of Singapore) and ASREA (Association of Singapore Real Estate Agents) to ensure effective enforcement.

Anonymous said...

Mah Bow Tan just said, DC raise not targeting for a slower collective sale.

Government not going to stop this little red Juggernaut.

SISV and REDAS and ASRE can all stand one side.

Anonymous said...

What you wrote is indeed worrying when even outsiders can call a meeting at your place of residence promoting to sell it. So I was thinking perhaps anti-en bloc owners should call a meeting, collect the required minimum signatures to block en bloc for say 2~3 years, stamped and sealed for legality (whatever the term). If a CSA is recognised, so should an anti enbloc agreement. What do you think?

Dr Minority said...

Starting an anti-enbloc agreement is an ideal counter to the collective sale agreement, but both agreements are subject to factors that are valid only at that particular point in time. This makes it hard to legalise, in principal. For example, the CSA is valid only for the duration of the enbloc process. One cannot say "I agree to sell my unit at any time" because one will need to consider variables such as pricing, needs etc. So it's not an unconditional agreement but a conditional one - "I agree to sell my unit under certain conditions".

Same with anti-enbloc agreement (AEA). If I were to sign an AEA, stipulating that I will not sell my property for the next 2 years, what happens if I need to emigrate, or move elsewhere, or need to liquidate my assets for urgent reasons? Will any penalty stipulated in the AEA apply to me (just as there are penalties in a CSA).

What might be more useful is to have an AEA for the duration of the current enbloc attempt. I'm not a lawyer but I suspect this might be doable. A document, jointly signed by at least 20% of all SPs that states they will not sell their units for X number of years, and only under X conditions will they be released from the agreement.

The issue will be - what form of penalty will be needed in an AEA, to ensure people take it seriously enough?

Anonymous said...

This can only happen in an estate where the security is lax. How is it possible that an agent can just walk into an estate and conduct a presentation without being invited? I cannot believe that an agent will just saunter into the estate without someone opening the doors. The agent would not have one soul willing to listen to him if he did that! Therefore, we should not believe this posting by Dr. Minority. He should be more responsible in his postings and not mislead others just because he is anti enbloc.

Anonymous said...

Well, to Anonymous, I stay at that estate and what Dr Minority has so accurately reported was exactly what had happened. Do you stay at that particular estate? If you don't, then maybe you should be more responsible and not mislead others with your comment!

Dr Minority said...

Perhaps some clarification may suffice the anonymous poster dtd 24 Jul 23:39:-

1. The agent obtained a list of owners, easily obtainable from either stat boards or even the managing agent. The list however, is outdated, as my friend's unit does not reflect the actual ownership. It is not known where the list originated from to have such errors.
2. The agents went door to door in the estate to inform people of the presentation, a few days before the event. Not all owners, particularly those staying outside the estate, were informed.
3. When asked in a public forum whether there was a pro-tem sale committee, the agent said they were in the process of forming one. When asked further, the agent began to hedge and no names could be given from him, neither did anyone stand up to present themselves.
4. The fact that the letters to owners were all addressed to a non-existent chairman of the MC, in the presence of the actual chairman (who while acknowledging speaking to the agent, gave no permission for them to turn up at the estate to give the talk), should be highly suspect.
5. This estate is not an isolated incident. I've had one other estate which reported illegal solicitation by 2 agents.
6. Ultimately, the fact remains - it's not the lax security that's the problem, BUT THE LAX ENBLOC LAW THAT IS AT ISSUE. Any single resident can request for an agent to come make a presentation. And given the super prime location, there are sufficient agents hoping to go fishing for a prize catch. Including going door to door, buying refreshments, spending their (and owners') time, etc. After all, if they are thick skinned enough, they may well win a multi-million dollar contract.
Like I said, I reported what I witnessed at the presentation. It's naturally up to you to interpret things.

Anonymous said...

Well, ask yourself a simple question? Who booked the room for the agent to conduct a presentation? Can an agent, without invitation just walked into the estate, open the door to the meeting room, arrange for enough chairs to seat the almost 50 people present? Does it make sense to any of you? Yes, I was there! The agent must have been invited by someone who has the authority to allow him to do all that. Who is this person? We can all guess, I am sure. So, this isn't a case where agents can just walk in to any estate to make a presentation to SPs. There has got to be prior arrangement. This is sheer common sense.

Anonymous said...

It's so easy to be "invited" to give a talk.

Just paste the words "Who wants to be a millionaire!" big big on the agents forehead and loiter outside the estate.

In the case of a super-prime, super-rundown dev. ripe for enbloc, replace "millionaire" with "multi-millionaire".

Dr Minority said...

To anonymous poster of 25 July 2007 15:14, I have responded to your latest comment elsewhere.

I'd like to reiterate my point: "without any official invitation by any SP at all". It isn't "without any invitation" but the key term is 'official'. I don't think your contention is lax security (in my estate, anyone can book the function room, even non-residents!) but to what extent is any agent officially invited. Apologies if that is not your point.

In any estate, what counts as official? Let's put it on a scale:-

1. No resident invites an external party in for a particular purpose directed at all residents. Party self-invites themselves.
2. 1 resident invites a party in for a purpose directed at all residents.
3. 1 group of like-minded residents invite a party for a purpose directed at all residents.
4. 1 group of like-minded residents, ratified at a general meeting to represent all residents, invite a party for a purpose directed at all residents.

The government in their proposed legislature changes to enbloc laws clearly believe that (4) is the proper definition of 'official representation', and that the current method of self-nominated PTSCs (3) are not. Certainly not (1) & (2).

In response to your 'simple question' of 'who booked the room' etc, in my estate, anyone can, including non-residents hence generating (1). I do not know the booking method in your estate nor is that relevant. I think you will agree that when an agent goes into an estate to give an enbloc talk, without any official invitation as stipulated by (4) above, or (3) as is the popular practice, then something is wrong with the enbloc law, as I pointed out in my post.

FYI, (1) has happened already, in at least 2 estates.