Wednesday, 15 August 2007

Devonshire Lodge - Minority Owner Seeks Legal Action

As predicted, more and more minority owners are now plucking up their courage to seek legal action against their enbloc sale. Channelnews Asia reported yesterday on a single minority owner who plans to fight the enbloc sale of Devonshire Lodge in Devonshire Road, a building that's just over 10 years old (TOP 1996). There were no news report on the sale but a caveat lodged with URA on Mar 2007 showed the estate comprising 27 units was sold for $35,680,000 (although CNA reports it at $37.2m).

You can find the CNA news here (including a video). Mr Philip Fong from Harry Elias Partnership (Currently representing Horizon Towers' minority owners) mentioned some possible grounds for taking the sale to court - "inadequate marketing, the sale was rushed into, suppression of facts". He also pointed out the minority owners face an uphill task since they are "not privy to what went on during meetings to discuss the sale of a property" and "they do not have easy access to the sales committee and documents". The CNA also reports that typical minority objections are on grounds of "sale process" and "valuation".

Estate: Devonshire Lodge, Devonshire Road
Stage: Sold at $37.2m in Mar 2007
Party: Sole minority owner, Mr Jeffrey Lai. Lawyer to be hired. No STB Hearing date yet.
Collective Sale Lawyer: Toh Tan & Partners
Developer: Evan Lim & Co
Reason: Sale amount for the estate may not be in line with valuation.
Details: (CNA) "some owners are having second thoughts", "we want to know that it's a fair valuation when they sell the property". Mr Lai plans to obtain an independent valuation report
for submission with his objection to STB.


Anonymous said...

The heads-up should be on those "willing" sellers who are now thinking of backing out of the deal ala "HT"..

Minority rights must always be preserved.. but sellers who signed a contract and now thinking of backing out by technicality default deserves no sympathy.. ever..

Anonymous said...

by the way, who is the agent ? A bit fishy why this deal was done quietly n was not even in the newspaper ?

Anonymous said...

I am currently vetting a draft CSA for the pending en-bloc sale of my unit in Ocean Park.

What strikes me in this document is the powers assigned to the Sale committee. Their obligations and duties are spelt out visa -viz the Vendors who signed the document and delegated powers to them.
Their appointment no doubt was made willy nilly with a minority who attended the AGM for sellers and voted them in.

But what about the minority owners? How are they represented as a collective group? What are the responsibility of the SC to this group?

Very little information filters through to me as an individual owner. At this juncture I want to know who are the dissidents , who are the people who want to have a voice about not selling. I don't trust the members of the pro-tem sales committee who most likely are made of those who want to sell and expedite the whole collective sale.
Do the SC owe responsibility to the minority to divulge the number of residents who have agreed and the ones who have not?
Should the SC not ask the Marketing consultants to do a feasibility study as to how much it would cost for the owners to develop themselves ?
What are the developers' potential plans?
Could the residents have first choice of units off-plan if they wish to buy into the new development?
Could they exchange the sale price for a unit of their choice, preferably of the same dimension and facing at the same offer price or discounted price?

These are questions that not just the anti-bloccers want to know but also the potential sellers who should be informed of to make their decision.

SC owes us (vendors and the minority) the duty to get the Marketing team to give us estimated feasibility study on what the developers are getting out of this whole deal.

Transparency is knowing what we are giving up and whether we are over-enriching developers who are basically asset strippers.

I am not willing to exchange my 2000sq ft unit with a gorgeous ocean view located on firm non-reclaimed freehold land for a pile of paper cash which will never buy me the same home in the same locality!
Freehold tenure is suppose to be infinite and forever , the potential value is priceless.

Anonymous said...

The agent for the Devonshire Lodge is DEANS REALTORS PTE LTD. Heard of them? Think this is their first en-bloc deal. The price is S$37.2 million. Works out to S$919 psf ppr. Grossly underpriced these days, given that the Metz is going for S$2500 psf.