Saturday, 8 September 2007

Horizon Towers Update: A Trust that Failed

On Friday night, HPL (the buyers) filed an affidavit with the High Court, suing the majority sellers including the SC members. You can read that article here. In particular, the affidavit alleged that some members of the SC "tried to defeat the collective sale by encouraging the other majority sellers to go back on the agreement".

The majority owners met on Friday night from 8pm to close to midnight as well, to decide the next moves. You can read the reports from Business Times, Straits Times and CNA here. In essence, the SC disbanded/quit at the end of the night, leaving the majority owners completely directionless. The SC was disbanded because the CSA stated that a minimum of 5 was needed in the committee and that quorum was not met (with only 3 left).

Some points to be made so far:-

  1. Check your own CSA. Almost every one will have a minimum number of owners needed to be in the SC. This is typically 3 (which is the number needed to represent owners for the STB application) but it can vary depending on the PSC that drafted the CSA. Indirectly, as this case showed, it also allows a SC to be disbanded leaving owners without leadership.
  2. The affidavit cites, among other things, the fact that some SC members have (presumably on their own motives) encouraged sellers to rescind the CSA. Yet every majority owner is sued by HPL. The actions of a few SC members have given the fuel needed by HPL to show that the owners (and SC) were not doing their best to secure the sale. What it also points to, is the unquestioning faith many owners place on their SC members to do the best for all owners. People forget that (and not just in HT but in many estates) some SC/PSC members (a) are not even residents (b) are not duly elected (c) are individuals out to make a profit (d) are not necessarily suddenly going to develop strong ethical responsibility to all owners when thrown into the lawsuit fire (neither are they obliged to). After all, as the HT reports showed, those who want to step into the SC insist on "blanket immunity from legal proceedings". It's typically the first thing all PSC members will ask for - indemnity and exclusion from liability. It's in most CSAs.
  3. The new amendments might resolve some of these problems since it shifts responsibility from SC to owners to ensure everything is as transparent and fair as possible, including the need to revert to owners for the election of SC, agent, lawyer, approval of sale etc through formal general meetings. But some estates are trying to avoid going through such 'hassles'. Will the HT case haunt them in the near future? Isn't it safer to let the new amendments to the LT(S)A kick in and work within the new framework, rather than rush through things and risk legal repercussions?
The tv show X-Files theme is applicable here: TRUST NO ONE. Can you put the fate of your home (and more) in the hands of a group of self-motivated people (some of whom don't stay in your estate) who gathered together to sell an estate, with standard CSA clauses to protect them, while often giving them rights to do many things without asking owners for consent under the current law?

At the end of the day, the HT case shows just how complex and intricate the legal transaction of a collective sale and its consequences are, and how many people are unaware of this. And while outsiders may speculate about what could've been avoided, what might have gone wrong, how the majority owners and SC might remedy, who to blame, etc, I'm absolutely certain each of these outsiders, myself included, do not want themselves to be a HT owner at this very moment.


13 comments:

Anonymous said...

NO COMMENTS

Anonymous said...

Found this in my letter box. Out of the 8 sales committee from the big units 4 units has a unit no 4 address. 3 sales committee has more than 1 unit. Figure it out.

Dr Minority said...

>>Figure it out.<<
I'm sorry but I'm not sure what you are referring to...!

To everyone:
I'm going to request anonymous posters to do the following:

1. Please post your comments into the relevant threads.
2. Please elaborate on your comment if necessary.
3. Please use "Other" when posting and enter an appropriate nickname. Use that nickname consistently in future posts.
4. When responding to a previous comment, please quote the part of the comment you're replying to using ">>" and "<<" to indicate it's a previous comment, like above.

I'll only begin moderation if this gets out of control.

Thanks,
DM

Anonymous said...

Think what the poster means the SC in the big units are not representing the owners to sell their house.Not a lot of people will want to buy house no 4. Considerered bad luck-means death in chinese. So join SC to push their units through.The other 3 has got spare units. Join SC to push for their units. And they are telling the home owners to trust them. Maybe i'm wrong.

Dr Minority said...

>>Not a lot of people will want to buy house no 4. <<

Wait, is this referring to Horizon Towers? (What estate IS this? I've read in other comments about "big units" and "small units" which presumably refer to the same estate)

If not, why did these owners buy units with No 4? Or are they hoping that this counts as an example similar to the Feng Shui case where taxes are not payable because the owners are compelled to sell due to bad luck?

Anonymous said...

Think he may be refering to the freehold condo next to Leedon Heights which was recently sold. Check the most read blog other than HT. I have been following that blog because i also own a big unit which is in the process of signature collection. No 4 is cheap to buy but hard to sell,unless you sell it cheap.

Anonymous said...

More appropriate for judge to take

over STB.

Dr Minority said...

>>Think he may be refering to the freehold condo next to Leedon Heights which was recently sold. Check the most read blog other than HT.<<

I'm not aware of any blog about a freehold condo next to Leedon Heights LOL. (Tulip Gardens, Holland Hill Mansion, Holland Crest??) Do provide the link to it here. Anonymously of course if you wish. Am now very curious to read this blog!

Anonymous said...

More appropraite for judge to take over STB. 114 replies now.

Dr Minority said...

>>More appropraite for judge to take over STB. 114 replies now.<<

This refers to a discussion THREAD on the CondoSingapore.com forum. It's not a blog (like this one). Can I confirm you are now referring to the CondoSingapore thread "More appropriate for judge to take over STB" which has diverted now to discussions about Tulip Gardens?

Anonymous said...

Correct.

rebelrouser said...

Sale Committees are basically a set of residents who are dying to sell their own unit to cash in , so the basis of their formation is completely diametrically opposed to those who resist selling .

MY contention is if we allow them to be formed willy-nilly then surely we should be allowed to form a group that is completely opposed to that. The watchdog and guardian of our arichitectural heritage, our environment, our community, our historical and emotional value and attachment to our home which we have worked and earned the right to live in. That is surely priceless as long as the structure is strong and safe!

TRUST? -seems like 'INGOT we trust' apply aptly with those in Horizon Towers who unfortunately agreed too soon to sell their home and live to regret it.

So the common law of Trust would apply? Are SC members trustees? HOw far would their indemnity protect them? Were they acting in good faith throughout or were they negligent, fraudulent? Is ommission as bad as commission ?
In the absence of legislation , the common law will be shovelled in thick and fast..indemnities are only as good as the ink they are written on..All said , Trust lawyers would be in demand soon as this saga moves to Appeal court and I am rather excited watching it on the margin from a long way away.
Good luck to all in HT and if I know the developers, they are certainly not giving up that easily.

MORAL OF THE STORY: Don't go where angels fear to tread or where fools in this instance jump into a murky mess. About time residents rethink about being a member of the SC...lol

That could well work for all of us minority anti-enbloccers!

Anonymous said...

Layman cannot understand "rebelrouser". Sounds too Italian. What are you trying to explain? History,Geograghy,Science or Maths?
Goodness Gracious!