STB - Judiciary or Volunteers?

This article on the Today paper (5 Jan 2008) was quite interesting and insightful in highlighting some of the problems of the STB in terms of its functions and members (article available here). Mr Yadav pointed out that the STB is made up of volunteers and this may create conflicts of interest. He asked "who better than a group of impartial persons to manage this delicate balance other than the judiciary". The perception of the STB in many minority owners' eyes is after all quite negative - out of hundreds of enblocs that have gone through STB, and given the numerous complaints about underhanded methods used by marketing agents and sales committees, only a handful of dismissals was ever made. It brings up the question - is STB there to be a check-and-balance mechanism in ensuring fairness and equity in enbloc sales, or is STB there to facilitate enbloc sales? If the former, why were the hundreds of thousands spent on legal fees by minority owners wasted away raising complaints, issues and concerns about how the sale was handled, only to have all their complaints, issues, concerns pushed aside to approve the sale?

The law points out that good faith must be secured in the sale, yet it narrowly defines the meaning of good faith through sale price, method of distribution and relationship of purchaser to owners. What about if the sale was not conducted in good faith, eg if the agent made misrepresentations to secure CSA signatures, or if the meetings were not conducted appropriately, or if the negotiations between purchaser and SC was not done in a fair manner? These have been raised at STB hearings by various minority owners, but legally they do not constitute good faith.

I'm reminded of a transcript of a general meeting at one enbloc site, where a (now ex-)member of the STB, who is also a lawyer representing the SC, made an appearance to the estate to assuage the worries about both Horizon Towers and the (then) impending legislation. In the meeting, he weaved between his role as the lawyer in charge of sale and his role as an STB member. When asked if there would be any conflict of interest, he brushed it off by saying that in any STB hearing involving the estate, he will not be a member of the STB tribunal. This of course does not say anything about whether he may or may not have shared insider information with other STB members, and because he is paid by the SC/marketing agent, he gave information about the runnings of STB and about the HT case (some information of which were not public knowledge). If this wasn't a failure of conflict of interest I do not know what is - that a STB member can use his (supposedly neutral) position to appeal to owners to sign the CSA, indirectly or otherwise.

I wrote about this potential conflict of interest more than a year ago here. At that time, I looked at the breakdown of panel members. Since the new legislation, STB has increased the number of members from 30 to 39. I include the new breakdown, with the old breakdown in square brackets.

Lawyers 8 [5]
Judges 2 [2]
Academics (Lecturers and Professors) 6 [5]
Engineers 4 [4]
Surveyors 4 [2]
Architects 4 [4]
Property Consultants 6 [8]
Consultants 3
Accountants 2

New entries are consultants (non-specific) and accountants. Out of the 8 law firms represented, 4 stated that they deal with enbloc sales. Again, like in the previous post, in these various categories, I'd consider judges, academics and accountants to be fairly neutral with no corporate conflicts of interest. I'm also discounting other extraneous factors eg a law professor who is a condo raider lol. In other words, I'm only looking at their affiliation (firms) and their career function (a law professor is more likely to be neutral in hearings than a property consultant from Savills for example).

Vested Interest Panelists in STB (or members who may have conflicts): 29
Neutral Panelists in STB: 10 (or 25%)

The 2007 list of members had 7 neutral vs 23 vested (or 23%). Under the 2008 list, it means that in a tribunal of say 4 members, there's a 1 in 4 chance of a member who at least can be said to be a neutral person.

I think Mr Yadav is correct - there's only two safeguards against unscrupulous enbloc sales attempts - the law and STB. STB needs to be more neutral in their membership selection, and the judiciary is one way forward. The law also needs to consider carefully that matters of good faith must encompass far more than just price, distribution and relationship. It must recognise the political nature of enbloc sales as well as the social consequences of enbloc sales in disrupting peoples' lives.

Print Page

Tags: strata titles board, strata title board, collective sales, en-bloc, en-bloc sale, enbloc, enbloc sale, collective sale, singapore

Opportunities are never lost; they are taken by others

A new poll's up on the public perception of the role of the Strata Titles Board but let me get the results of the last one in here first:

What do you think of the new amendments? (121 voted)
1. It'll make things worse - 6(4%)
2. It won't change anything - 58 (47%)
3. Why spoil a working system - 2 (1%)
4. Let's see how things go - 4 (3%)
5. A step in the right direction - 15 (12%)
6. Could have done more! - 36 (29%)

The title of this post may not be obvious to many people but if you look at the Money section of yesterday's Straits Times 10 Jan 2008, you'll see the relaunching of the tender for Pearlbank Apartments by Knight Frank, with the catchphrase "Opportunities are never lost; they are taken by others". You can read about the relaunch of Pearlbank Apartments on condosingapore here. Just for those who may not be in the loop, Pearlbank Apartments is an architectural heritage of Singapore, being the first all-housing project built on a URA land parcel. It's been shortlisted as having architectural significance in the recent URA Singapore 1:1 City exhibition and book (as indicated here and here). It was put up for tender in early August 2007 for $750 million but was unsuccessful. Now Knight Frank (KF) is trying again, for the same asking price of $750 million.

But that marketing phrase inserted into the ad (not present in the first ad) disturbed me. Let's think this through...

"Opportunities are never lost; they are taken by others".

Opportunities for what purpose? Obviously KF is referring to their very profitable business of 'urban renewal', having achieved their 80% mandate to sell the place. A few things to note though - in their first attempt in August, it was with much fanfare as they put up a full page top to bottom ad in the Straits Times, highlighting their triumphant ability to obtain a majority agreement and their intent to destroy, what to many architects and urban planners, is a historical landmark. It's just business to them after all - dollars and no sense needed. Now, their ad is barely 1/8 of a ST page. What does this say of their intent? Half (or rather 1/8) hearted? After all, under new regulations, KF need not put up an ad with the names of owners nowadays, saving them advertising costs.

More importantly, it's "opportunities" for whom? Again the KF is clearly intended for developers, although again this is a strange habit - one would've expected a well connected, and certainly a major property player in the market like KF, to have approached various developers to indicate that Pearlbank is going on the market again for tender. After all, Pearlbank is a huge estate and will garner the interest of only the bigger developers. So advertise for who? For publicity's sake? Maybe. After all, BT has printed the relaunching of Pearlbank (here).

But the question is who is left out? "Taken" by who? Who are the unsaid participants in Pearlbank? Perhaps I should rephrase their blurb to:

"Opportunities to own one's home are never lost; they are taken by others keen to profit from enbloc sales".

See the difference? Perhaps the ad may naively be directed at developers and the public, but underlying that simple sentence is the ugly fact that homes are taken by others with little regard for anything other than purely financial gains.

Print Page

Tags: pearlbank apartment, pearlbank apartments, collective sale, collective sales, condo, en bloc, en-bloc, en-bloc sale, enbloc, enbloc sale, property, singapore

Clementi Park and Ocean Park Anti-Enbloc Blogs

Two new anti-enbloc blogs have appeared.

Owners of Clementi Park estate who are not keen to participate in the enbloc process have started up their impressive website as well as getting a mention in the ST Forum (reproduced on condosingapore here). You can visit the Clementi Park website here (http://www.saveclementipark.com/).

Owners of Ocean Park over on the East have set up another blog as well, which was recently updated. You can visit that here (http://www.oceanparksingapore.blogspot.com/). This is different from Ocean Park Anti-Enbloccers (although both bloggers are in communication).

Good luck to both estates in fighting the enbloc madness!

Print Page

Tags: Enbloccing Singapore, Enblocing Singapore, Enblocking Singapore, collective sale, collective sales, condo, en bloc, en-bloc, en-bloc sale, enbloc, enbloc sale

NUS Survey on Reserve Price

Research on enbloc sales is seriously lacking in Singapore (or elsewhere for that matter), and any research that adds to our understanding of enbloc sales is always a welcome sign.

I received an email from an NUS undergraduate student, Celeste Han, doing her Honours dissertation with the Dept of Real Estate. Her research is on enbloc sales and she needs our help with a survey that she’s conducting, specifically on the reserve price and perceptions of it. According to her, the research objectives for the dissertation are: (a) to identify the key motivations that lead people to agree or disagree to an enbloc sale (b) to study how sellers in enbloc sales forge their reserve price.

The survey is open to all who have experienced, or are experiencing enbloc sales attempts. Please do download it here (on scribd); it’s a very short and simple survey – once completed please send it to Celeste (email: chanhy85@hotmail.com) directly. A couple of notes – ‘reservation price’ should be meant as ‘reserve price’ in enbloc lingo :) And no, I’m not in any way affiliated with the dept :P

Celeste's deadline is coming soon (15 Jan 2008) so please do what you can to help her. It really is a short survey (won’t take more than 5 minutes of your life) and it’ll really help add to the research literature, scant as it is, on enbloc sales in Singapore.

Good luck, Celeste :) And would appreciate if you can forward me a copy when you're done! :)

Things I need to do:- 1. Update enbloc list, 2. Update on minority wins at STB, 3. Update on new anti-enbloc blogs (Clementi Park, Ocean Park), 4. What to do on the 1st EOGM. I'll get around to them soon.

Print Page

May your New Year be a QUIET and PEACEFUL one!

With sincerest apologies to all, ever since returning from my break in mid-Dec, I've been bogged down with tons of emails and getting work ready for the start of 2008. I've only (I think!) finally caught up with the latest news on enbloc sales, my enbloc emails etc. Thankfully, Pariah's been updating her blog regularly and it's always a joy to read her take on enblocs, especially her views on collective exchanges.

Over the Christmas period, I've been thinking a lot about the 'spirit of giving' that seems to be the rhetoric around that time. For those of you who have had your estates sold, I'm sure you would have experienced a barrage of unsolicited mails and phone calls to get you to:-

• Buy a new car (Had special personal invites sent by BMW, Merc, and a number of other brands)
• Buy a new condo (both personally addressed to me as well as those that spam the entire estate's mailboxes)
• Invest with banks etc etc.

Now obviously a lot of these enterprising chaps who sent the mail to us obtained our names from the advertisements that had to be put out under the old enbloc laws (the ones with all owners' names listed). Thankfully under the new law, that won't happen.

But it got me thinking - there's at least a flood of 600+ millionaires from Farrer Court appearing this year, and that's not including the number of enbloc millionaires existing or who will be getting their money, whether they are for or against the sale. That's a lot of millionaires, and if anecdotal evidence of sale solicitation is anything to go by (I contacted some European car makers to ascertain this), a lot of the brand new SG* cars are bought courtesy of enbloc proceeds.

While I understand that, like lottery winners, the first instinct of any person suddenly flooded with a whole lot of money is to splurge, to indulge oneself or spend on your loved ones, there's something else that millionaires do, that we don't see a lot of in Singapore, I'd think.

The act of philanthropy.

(Or donating money to support a charitable cause.)

Singapore has the fastest growing number of millionaires in the world, and with over 6000 homes sold last year through enbloc sales, there's no doubt more millionaires will appear in 2008. So how's this for a new year resolution:-

GIVE (AT LEAST) 1% OF YOUR SALES PROCEEDS TO A CHARITY OF YOUR OWN CHOOSING.

And by charity I don't mean your own, nor any that starts with BMW, Mercedes, CDL, Far East etc. :P

1% of $2 million+ (if you're a Farrer Court owner) is $20,000. You pay 3-4% to your enbloc sales agent for them to do their work, and you certainly pay as much to your enbloc lawyers. 1% is not a lot relative to these. So please think about this seriously, and do the right thing. I have a while ago.

I'll update the enbloc list and other stuff in due time. May your new year be a calm and peaceful one, for those of you still experiencing the enbloc trauma.

Print Page