Saturday, 22 September 2007

How Many EOGMs Does It Take To Lay the Golden (Nest) Egg?

A commenter asked how many EOGMs is required under the new amendments. Let’s count them up:-

EOGM 1: Election of Collective Sale Committee (CSC)

According to the Section 84A Subsection 1A, and Third Schedule Para 1, the first EOGM is to elect the CSC comprising no less than 3 members and no more than 14. Such election is to be conducted by ordinary resolution (majority vote). If this is like election for management councils, each candidate will have to be voted in, which means some may not be elected if the majority votes otherwise. During this EOGM, all candidates must declare any interests (direct or indirect) in any property developer, property consultant, marketing agent or law firm. (Third Schedule Para 2)

EOGM 2: Appointment of Law Firm, Marketing Agent, Apportionment of Sale Proceeds, and Collective Sale Agreement.

This is the 2nd general meeting. To “consider” the appointment of lawyer, marketing agent, to “consider” the apportionment of sale proceeds, and to “consider” the terms and conditions of the CSA. Now “consider” means it is purely informative; you do not get to vote on the matter. But I wonder if a subsidiary proprietor or a group can requisition for a motion to vote on these matters during the general meeting or not.

Some have tried to argue that since EOGM 2 is informative, it can be collapsed into EOGM 1. This means that the CSC is highly confident that (a) the SPs will elect for the formation of the CSC (b) all of them would be elected (c) they have lined up the law firm, marketing agent, and CSA already. However, I suspect some marketing agents and law firms will now insist that before they sign a contract to be their agent, the CSC must be fully ratified first (since the election of the CSC is an ‘internal’ matter now, and it might not even get off the ground).

EOGM 3: Execution of the CSA

The 3rd general meeting. This is to give an update on the total number of SPs who have signed the CSA and to provide information on the sale proposal and process. This is before the public tender.

EOGM 4: Number of Offers, Sale and Purchase Agreement

The 4th general meeting. This is to provide information on the number of offers from the tender, their respective amounts, and to “consider” the terms and conditions of the SPA. This will be held “as soon as practicable” after the close of the tender, auction or private treaty.

EOGM 5: Dissolving the CSC

This is not officially in the process, but a group can requisition for the dissolution of the CSC by ordinary resolution at an EOGM. (Third Schedule Para 12)

So a total of 4 (or 3 if some groups decide to shoot for compressing EOGM 1 and 2), or 5 if a group thinks the CSC should be dissolved. Only EOGM 1 and 5 currently allows action by the SPs, the rest (EOGM 2,3,4) are purely informative only. As I said, because these are general meetings, there's a possibility that a SP or a group can requisition for additional motions to be entered into the notice as well. This will have to be tested of course.

The EOGMs 2 to 4 are stated in the Third Schedule (you can find the document here) reproduced below:-

7.—(1) The collective sale committee shall convene one or more general meetings of the management corporation in accordance with the Second Schedule for the following purposes:
(a) to consider the appointment of any advocate and solicitor, property consultant or marketing agent;
(b) to consider the apportionment of sale proceeds;
(c) to consider the terms and conditions of the collective sale agreement;
(d) to give an update on the total number of subsidiary proprietors who, immediately before the date of the general meeting, have signed the collective sale agreement;
(e) to provide information of the sale proposal and sale process;
(f) to provide information on the number of offers received for the collective sale and the respective amounts; and
(g) to consider the terms and conditions of the sale and purchase agreement.

(2) The meeting under sub-paragraph (1)(a), (b) and (c) shall be convened before any subsidiary proprietor signs the collective sale agreement.
(3) The meeting under sub-paragraph (1)(d) and (e) shall be convened after the subsidiary proprietors referred to in section 84A(1) or 84FA(2) have signed the collective sale agreement but before the launch for sale under paragraph 11.
(4) The meeting under sub-paragraph (1)(f) and (g) shall be convened as soon as practicable after the close of the public tender or public auction or, where applicable, after the collective sale committee has entered into a private contract under paragraph 11

5 comments:

Anonymous said...

ever heard of (first) three in one?

Dr Minority said...

Wow that would be near impossible. The first two I might understand but the 3rd (which can only be done when 80% has been achieved) will have a time lag from the first 2 EOGMs. Unless the estate is exceedingly small, eg 20 units, that might be possible, but it'd open up the possibility of objection if a minority owner argues that the EOGMs were not conducted in good faith (which it might not be if all 3 are done together, hence defeating the rationale for having them separately in the first place).

ngiamsw said...

Had a look at the new bill, and looking at the section on "Notice of general meetings"(pg 26)[extract at the bottom], I would say that it is pretty clear that in the new bill, CONSIDER means VOTE on the items (appointment of property consultant, lawyer,... ) during the general meetings that you mentioned in your post so it is a right granted to subsidiary proprietors unless we vote to give away that right.

I highlighted this point and the fact that the Protem sales committee was asking us to vote to elect them AND authorise them to appoint consultants/ lawyers/ professionals (as ONE motion!)at yesterday's Kensington Park AGM. The AGM ended with them withdrawing their motion.

On a separate note, the Protem Committee had invited 3 property consultant to present to the subsidiary proprietors yesterday and finally only one (CREDO) made a presentation to us. The other 2 could not come/wait because of other Condo meetings. Interestingly, the CREDO rep was not that gungho and actually recommended that no consultants/lawyers be appointed til late Q407. So looks like things will slow down for a while...
See the extract from pg 26 of the bill:-
Notice of general meetings
3.—(1) A notice of a general meeting of a management corporation shall be served
on each subsidiary proprietor who is a member thereof and on the first mortgagee of a lot, as ascertained from the strata roll, at least 14 days before the meeting.
(2) Every notice for a general meeting shall —
(a) specify the place, day and hour for the meeting;
(b) include each proposed resolution to be CONSIDERED at the meeting;
(c) specify any other business to be transacted at the meeting; and
(d) inform each person to whom the notice is addressed that he may VOTE in respect of each proposed resolution and, where relevant, on election of members of the collective sale committee

Dr Minority said...

dear ngiamsw,

thanks for your comment of which merits a post reply on its own. Do have a read of it and let me know whether you think it's a rational interpretation, especially if AR Paul Tan has made a ruling on this 'consider' aspect of the EOGM.

Also, Credo is right in that everyone is trying to figure out what's the proper protocol under the new law, so until that has been ironed out, a lot of things can be undermined if it's not done in accordance with the new law (which many are still confused about).

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