Saturday, 11 August 2007

Horizon Towers Contacts Needed & Comments Raised

The initial post on the Horizon Towers' STB dismissal has generated over 160 (and counting) comments, in true MSN style of rapid fire and response. I do not believe in censorship nor do I want to stop people from commenting to one another, so I'll put some of my comments here rather than be drowned out by the continuing discussion (and often speculation) on the plight of Horizon Towers.

Firstly, if there are any Horizon Towers owners/residents reading the blog, a major newspaper reporter who specialises in collective sale reporting is looking for contacts to interview with regards to the situation in Horizon Towers. If you'd like to talk to the reporter, please let me know - enblocsingapore@hotmail.com . I'll hook you up. The reporter is bona fide, and anonymity can be maintained should you choose. It'll be good to get some information from the residents and owners, to at least calm some of the very rampant speculation. Just note that if you have been advised by your lawyer(s) not to speak to the press, then you should comply.

Now aside from the glaring question of who sues what where how when, two other issues have turned up in the comments - (a) is the CSA still valid for it to be resubmitted to STB (b) during the owners' meeting where they decide what to do next, should any voting be public or confidential.

Voting, Anonymity and Why Current Enbloc Favours Certain Parties Over Others

I'll address the latter (b) first. For a while now, I have been advocating the fact that the current system of enbloc procedures is not efficient and mindful of the needs and concerns of owners. What I'm referring to is the fact that any signature collection for the CSA can last for a year.

Think of it this way - if a powerful political party is given not a short period of time to campaign for votes (as is currently practiced), but a whole year to garner votes, and by garnering I mean actively in-your-face constant reminders to vote for them and why it's good to vote for them etc, do you think elections will be fair? No, because (1) a sustained campaign is only feasible to the party with the financial resources and clout to do so; any party that does not have that power will face serious problems trying to get their own votes, (2) there is a very real risk of wearing down - a voter might vote irrationally simply because they want to get it over with.

The period of time to collect a CSA is 1 year. That favours a sustained campaign by the agent and sale committee to push for a sale, and to wear out resistance if any. Unlike voting, CSA signature collection is not anonymous either. In other words, the agents and SC know who voted and who didn't. They are under no obligation to keep that confidential (see your CSA, are there any clauses which require that such information be kept confidential? Doubt so). Any owner who signs on the CSA can see who else has or hasn't signed. They can then persuade, coerce, even threaten their neighbours, resulting in an ugly community divided into two.

When the owners meet to decide the fate of their estate, one commenter said that any voting should be kept confidential. Absolutely. No raising of hands. Have proper ballot cards for all registered SPs to decide, and that result should be compiled by an independent party.

This should be the way with CSAs as well, to be honest. Hold 2 voting sessions in a 4 month period (not 1 year and given the bullish property market, even pro-sales owners should think a year too long), with voting done anonymously but verified and certified by an independent party. Failure to achieve 80% means accepting that it's not going to happen, and owners moving on with their lives.

CSA and SPA Validity

I want to preempt by saying I'm not a lawyer nor trained in Law. I read things carefully and logically. All discussion is based purely on rational and not legal reading, so CAVEAT EMPTOR (BUYER BEWARE - READ AND ACCEPT AT YOUR OWN RISK!). One commenter asks if Horizon Towers wishes to resubmit, can they 'reuse' the CSA?

Okay, there's TWO contracts involved in a collective sale. The Collective Sale Agreement (CSA) which binds the owners, sale committee, outlines the responsibilities of agents and lawyers (sometimes), method of distribution etc etc. The Sale and Purchase Agreement is a contract between the buyer (the developer in most cases) and the seller (the majority owners).

Each of these two contracts vary, sometimes subtantially, between estates. This depends on the law firm hired and the SC's decision to include/exclude certain clauses, indemnities, conditions etc.

Typically, the CSA will have a number of expiry or period of validity clauses. The Horizon Towers (HT) CSA should contain them as well, outlining when the CSA will lapse (eg when 80% is not achieved by a particular expiry date, when no SPA is achieved, when no application to STB is made etc). Assuming that the CSA has a clause to the effect that (for example) if STB approval is not issued within 12 mths from the execution of the CSA, it means that so long as HT has not reached that deadline, the CSA is still valid. Hence, everyone who signed on that CSA is still bound by it. They can extend the deadline (if permitted in the CSA), eg to apply to STB to obtain approval but the signatures stand.

The SPA should likewise contain clauses that outline its validity subject to an STB order. For example, if the STB dismisses the application within X number of months from the date of the SPA, then the agreement shall be deemed to be cancelled etc. It might even outline claim clauses eg "the purchaser shall have no claim whatsoever against the owners for compensation, costs, damages" etc. So in all likelihood, if the HT SPA contains such a clause, the STB dismissal would have cancelled it BUT not the CSA. If the CSA goes past the expiry date and no submission to the STB has been made, then the SC will need to recollect signatures again. I do believe that if HT SC decides to resubmit, since the SPA has been nullified, they'll need a (most likely) redrafted SPA to submit to STB as part of the documentation.

That's my (amateurish) reading of it. Do let me know if it's wrong, but like I said, it'll depend on the individual CSA and SPA. The best advice on this would be to seek a lawyer. And no, I don't have the HT documents. :P

It's a really rough time for HT owners, both majority and minority I'm sure. All the best to everyone there.

26 comments:

Anonymous said...

CSA = collective sales agreement
SPA = Sales/Purchase agreement

Am i right to say that if 84% signed CSA, then we will expect that SAME number of people (84%) to sign SPA with buyer ?

Will there be any scenerio where 84% sign CSA but only 80% signed SPA ? Logically speaking, shouldn't be. Or 80% signed CSA but 84% signed SPA ? Even more impossible, right ?

Question : If CSA submitted to STB is only 79% valid, but SPA is 84%, then that shortfall of 6% is questionable. If 6% of shortfall is due to NOT rightful owners signing ( eg. one of the director signed instead of all directors (company unit) signature), then that SPA signed by same director should not be valid. So, the number became 79% CSA vs 79% SPA, correct ?

Anonymous said...

Hello, does it mean now has to work backward ? Has anyone verify 84% who sign SPA are valid signatures ?

If only 79% SPA valid, then that tally with 79% of CSA valid signature.

Then, no case, right ? Those people who sign CSA or SPA must be rightful owners before it's made valid, right ?

Anonymous said...

Oh....sounds logical !!!! Instead of ASSUMING 84% SPA signatures are valid, why not check on 84% SPA validity. Hey, maybe 79% is the correct figure. Then, there is no need to redo/resubmit make 79% of CSA to become 84% ?

Anonymous said...

hey, like that means no need voting liao.

Anonymous said...

aiyo, redo CSA, must redraft SPA or not ? If redraft SPA must follow the old SPA, then redo CSA also follow old CSA lah. Possible ?

Anonymous said...

redo, redraft failed again, how ? redo, redraft again ? no ending liao. If put in new things, wow biah, all parties fight like mad whether that new clause benefit who ? Then what ? again now ending ?

Anonymous said...

Owners wanting en bloc sign CSA. They authorise Sales Com. to sign SPA when more than 80% is reached. Owners don't sign directly on SPA. So cannot say "% of CSA vs %of SPA". Right?

Anonymous said...

>>>> Owners wanting en bloc sign CSA. They authorise Sales Com. to sign SPA when more than 80% is reached. Owners don't sign directly on SPA. So cannot say "% of CSA vs %of SPA". Right? <<<<

11 August 2007 14:53

OK, if base on what you said is -Then, CSA does not necessarily have to tally with SPA BUT BOTH must be MIN 80% correct ?

So, now CSA is 80% or not ? STB check CSA not SPA

Dr Minority said...

>>>OK, if base on what you said is -Then, CSA does not necessarily have to tally with SPA BUT BOTH must be MIN 80% correct ? <<<

SPA has no consensus level (ie no %). It is an agreement between the buyer (the developer) and the seller (the majority owners, ie those who signed the CSA). The SC, on behalf of the sellers, negotiate with the buyer to draft an SPA which then forms the contract.

Whether there is 80% share values for HT or not is unknown. What is known is that the latest level of signing was 84% (which we have not received word if it still holds, ie has been cross-validated).

Anonymous said...

>>>>....Whether there is 80% share values for HT or not is unknown. What is known is that the latest level of signing was 84% (which we have not received word if it still holds, ie has been cross-validated)....<<<<

So, this is important point before even voting.

Anonymous said...

Hi Dr Minority,

>>>....SPA has no consensus level (ie no %). It is an agreement between the buyer (the developer) and the seller (the majority owners, ie those who signed the CSA). The SC, on behalf of the sellers, negotiate with the buyer to draft an SPA which then forms the contract...<<<<

I understand SPA has no consensus level. SPA is signed when CSA meet 80% or more, correct ? If CSA is 79% ( this is unknown at this stage, need HT's & STB verifications ) then SPA should not be even sign in the 1st place. In another word, SPA signed will not be valid. Am i right to say that ?

Anonymous said...

wow, then better check that figure -79% or 84%. That figure can 'kill' or 'save' lives.

If 'gong-gong'(silly-silly) go for voting and finally extend the dateline & make 79% to becomes 84%, then they have themselves to blame lah.

tan said...

Dateline is TODAY. SPA still valid or not ? Got to watch news tonight on what's going to happen ?

ling ling said...

hello everybody, signature is signature. How to verify valid or invalid unless someone forge signatures ??

Anonymous said...

hi everyone, 12 aug sunday times said HT owners will not extend deadline of sales contract but will appeal to STB on their application. If they win, they will still need a new SPA.

Anonymous said...

>>>> hi everyone, 12 aug sunday times said HT owners will not extend deadline of sales contract but will appeal to STB on their application. If they win, they will still need a new SPA. <<<<

12 August 2007 10:58

Oh, if HPL does not want, then there will be many developers who want. Prime district is really running out of land ! Everywhere in prime district either enbloc or enbloc in progress.

Anonymous said...

Chinese saying, " you shaved off my eyebrow", HPL will look bad. HPL definitely wants the site that's why stressing legal action.

Anonymous said...

""hi everyone, 12 aug sunday times said HT owners will not extend deadline of sales contract but will appeal to STB on their application. If they win, they will still need a new SPA. ""

this is just as good as asking HPL to sue them.. they want to ignore the contract signed with HPL for $500mil and reapply to sell higher price

good luck HT! u need lots of it

Anonymous said...

way i see it - both parties also bleed and everyone stuck. What one of the lawyers said is right -mediation is the best. HPL up the price to $1300psf. HT sellers don't ask for $1810psf ( grangford price). Have to see monday's news on what HPL said ?

Anonymous said...

$1300psf could be $300mils more ? wow, this amount will allow HPL to buy another block of Costa Del sol. But if buyer insists on original price, i.e. $500mils, there will be no solution except court case. Not necessarily he will win.

Marcus said...

What happened if the owner of the estate have more than 4 units which pruchased during the exercise and so they have 4 votes or just 1 vote? I believe that there will be owners whom had more than 1 unit.

Anonymous said...

sellers counter sue agent also no use. Because it's a Pte Ltd company. They can just close down the company & re-open another one. How much can that cost ?

Anonymous said...

>>>> sellers counter sue agent also no use. Because it's a Pte Ltd company. They can just close down the company & re-open another one. How much can that cost ? <<<<

It does not cost much to open a company.

Anonymous said...

>>>What happened if the owner of the estate have more than 4 units which pruchased during the exercise and so they have 4 votes or just 1 vote?<<<

Each unit has a number of share values. This share values determine the voting rights of the owner. In most estates, 4 units = 4 votes (thereabouts). Eg Ong Beng Seng bought 180 units at Costa del Sol. When it goes enbloc you think he has 1 vote only? He'll have the equivalent of 180 units' share values!

rebelrouser said...

HOw sad is it to see Singaporeans using their homes like shares in share market, dealing and wheeling !
Speculators/developers buy up our homes just to dismantle them to line their already large pockets!

By the way, I noticed that temples and churches are going to revise the price of niches built to store the urn that contain our cremated ashes too..geez, so folks better go buy our little spot for our ashes before we die, maybe someone might speculate and buy the whole allotment , so think ahead ..buy , buy , buy..potential for making money even after we die!

Anonymous said...

>>>>By the way, I noticed that temples and churches are going to revise the price of niches built to store the urn that contain our cremated ashes too..geez, so folks better go buy our little spot for our ashes before we die, maybe someone might speculate and buy the whole allotment , so think ahead ..buy , buy , buy..potential for making money even after we die! <<<<

haha....u may be right. Hey, some people might want to subsale to another to earn some money.