Tuesday, 29 April 2008

A Personal Thought

In a few days, we'll be leaving our home of a few years. Speaking to Mrs Minority, we realised that we've moved homes 3 times in the last 4 years.

  • From overseas to Singapore because of work opportunities. A return to Home if you like, with big "H" to represent the nation.
  • From parent's home (staying there while renovations were ongoing) to the current home. A change from old home to new home, a small "h" for home but nevertheless our current home has become what it means, when everyone says "home is where the heart is". It was to be our wonderful place of rest, of peace, of tranquility (nice quiet neighbourhood), of sanctuary.
  • From current home to smaller home. Courtesy of an enbloc we have to downgrade, because we have to stay in the same area due to work reasons. We're fearful that our belongings won't fit into the new flat. Lots of people have left, our estate a ghost town, and the few remaining people (won't call them neighbours as they agreed to sell) have been coming and going, moving things out and complaining about the move. Well, doh. They went into it fully cognizant of the need to move, whereas we refused to sign the CSA, and have to move against our will.
Walked around the estate again, one last time, before the moving nightmare begins. I think with regards to home, a lot of us go through various stages:

  1. When we're young, we have a strong sense of belonging. Ken Lee's daughters do not want to move because they love their home, their neighbourhood, the non-physical and non-financial aspects of 'being at home'. We have memories of our childhood homes, for those of us lucky enough to have pleasant ones, and to remember them. We long for, and belong home.
  2. When we go into adulthood and work, the world is our oyster, for those of us fortunate enough to fly beyond the nation's boundaries. Home is where we move, to work and earn the money to make it big in the world. We become pragmatic about where we stay. A lot of people who are owner-residents and are for enbloc, I suspect, are pragmatists and do not have a strong attachment to their homes. It's just an asset. We economise home.
  3. When we get to our golden years, when memory fades and things become harder to be mobile for us, like many old folks who are traumatised by enbloc sales, a retirement home is something special. It's a place to rest, and celebrate what you have achieved, be it wealth, family, networks of friends, reputation. But with memory going, it becomes more crucial to be familiar with one's surroundings. Change, at old age, is not welcome. We familiarise home.
Each group has a reason to cherish their homes, or to see their homes as assets. It's a sad fact that in enbloc sales, the first group (children) and the last group (older folks) are often ignored, marginalised, or even neglected in any consideration - be it policy-wise or sale-wise. Yet, the middle group (the working group aged 25-64 yrs old) constitute about 60% of Singapore's population (Source: General Household Survey 2005). That's neglecting about 40% of the population in terms of considering enbloc policies or sales (assuming even distribution of age population across the middle-class socio-economic status).

Even if minority owners among the working group constitute only 20%, that works out to about 52% of people (young, old, minority) who may not want to go for enbloc sales.

That's a large group isn't it?

I'm going to miss my home. Badly. I'm in that 20% minority. Home for me means many many things, and to have it taken away from me against my will, makes my blood boil.

There's also about 52% of blood boiling (and voting) citizens, potentially.

Good bye home. We'll miss you.

Sunday, 27 April 2008

A Hero in our Midst: Ken Lee

Irregardless of the outcome of Airview Towers, one thing is for sure - Mr Ken Lee from Airview Towers stood up against people keen to take away his family home, bore the grunt of repeated legal offensives, and now made to pay the costs, because he stood up for 2 simple principles - that it is right for a person to protect his/her home, and that the enbloc law must be adhered to.

The Today paper yesterday published a full article on Mr Lee, and I've posted it on condosingapore (here). Do go there to read it. Some highlights:-

  1. His order to pay his opponents' legal costs is estimated from $150,000 to $300,000.
  2. He stayed in Airview Towers for approx. 30 years, making him a true blue stayer.
  3. He fought against the enbloc partly to fulfil a vow to his daughters, who didn't want him to sell the flat, or move out.
Given the Court of Appeal's (COA) ruling, it is unlikely that STB will reject the application this time round. I'm beginning to understand their rationale, although I have yet to read the judgment on this case. The COA pointed out that so long as the 80% is reached within 12 mths, the sale must be valid. It doesn't matter if the owners sold their units to someone else and they didn't sign the CSA within the 12 mth period, it is still valid. This is to ensure that there are no complications in the sale process.

So, if 80% of a (say) Damn-Suay Estate signed the CSA, and...
  • If all 80% gets struck by lightning and died, the sale should still go through.
  • If all 80% are husbands and they all willed their flats to their kids/wives who are against the sale, and the hubbies get hit by Mad Cows Disease for eating too many burgers, the sale should still go through.
  • If all 80% suddenly realised that their agent is a dodgy person, who has done some very questionable things to obtain the 80%, and decided to sell their units rather than wait for completion, then lucky dodgy agent will still get the sale, as it should go through. (Or until it hits any objection, but how effective are objections on bad faith or poor conduct nowadays, seriously?)
  • But what happens, with the new law's 5 day cooling period, when an owner who signed the CSA on 4th April and triggers the 80%, decides to sell his unit to a buyer 4 mths later. Is the buyer then entitled to a 5 day cooling period as well, after he signs the CSA, or is he stuck?
Again, if anyone knows how to contact Mr Ken Lee, please contact me: enblocsingapore@hotmail.com.

Friday, 25 April 2008

Shifting Accountability - Poor Ken Lee of Airview Tower

(To people who know Ken Lee, please ask him to contact me via enblocsingapore@hotmail.com.)

If you have not heard the craziest news in the latest enbloc debacle, you can read it here. Airview Towers' decision by the High Court of Singapore has been overturned by the Court of Appeal, allowing majority owners to bring the sale back to the Strata Title Board. Not only that, the Court of Appeal has ordered Mr Ken Lee to pay legal costs for the proceedings at STB, the High Court and Court of Appeal. Not only has David lost, he is made all the more poorer.

You can read my previous blog post about Airview Towers here.

Taking my caveat that I read the news as a layperson and not a lawyer, some cautionary points have to be made from Mr Ken Lee's turn of misfortune, which is applicable to everyone here:

  1. The enbloc law is subject to so many different interpretations, and levels of interpretations, that there is no right or wrong. What was initially a clear cut case of 80% not being reached, as decided at STB and High Court, now turns out to be NOT the case after all. As the Tampine Court blogger pointed out: "...the enbloc legislation is ambiguous. The STB, High Court and Court of Appeal can all have a different interpretation on various aspects and the onus is on the minority to have the law clarified at their expense."
  2. It also means that how to win in a legal enbloc battle depends heavily on (1) how much money you have to push the case through legal onslaught after legal onslaught, (2) which heavy weight lawyer you get to represent your case before the various levels - STB, High Court, Court of Appeal. No longer is it the case that if the law is clearly flouted, you can win. It's how you interpret the law, and how much money you have, that matters more.
  3. The Court of Appeal also clarified a point about owners who sell their flats after they've signed the CSA - The CSA is binding on the selling owner as well as all future owners. Think of it as 'sins of the father' that just doesn't go away: "The original owners, in signing up for a collective sale, signed for themselves and future buyers" (Straits Times 25 Apr 08).
  4. Point 3 is crucial because what it also means is that the onus of collecting signatures is shifted from the marketing agent (whose responsibility it is to collect signatures, follow them up etc), to the owner. The responsibility is now on the owner who must chase, and ensure that any buyer not only agrees to the CSA, but must sign the CSA within the 1 year limit. Preferably, the new buyer must sign the CSA on the day s/he signs any papers concerning the sale of the flat.
  5. There is only two ways out of this situation - (1) Do not sign the CSA unless you are absolutely sure you do not plan to sell your unit during any enbloc attempt (2) Ensure that your CSA does NOT include clauses that binds future buyers of your unit.
  6. The Business Times article pointed out that the Court of Appeal used "a different interpretation of the reference period during which the minimum period should be obtained". Until we get more information on this, I have to seriously wonder how different can their understanding of 1 year be from that of the STB and the High Court? I can hear some sarcastic readers among you suggest that perhaps they follow the Chinese lunar cycle instead.
  7. The salt in the wound is when the Court of Appeal ordered Mr Ken Lee to pay legal costs. This is simply madness. IF the interpretation of the law is so subjective that different levels can have issues over what the law means and how it should be applied, especially in Airview Towers' case, why should a man, with no legal training but nevertheless chose to represent himself, be penalised? Did he waste the court's time? The STB and High Court clearly didn't think so, but the tribunal of judges that form the Court of Appeal must have felt that Mr Ken Lee must be made to pay.
  8. Where is the accountability for the Sales Committee, and the marketing agent, whose primary responsibility is to ensure that the law is adhered to? It's like saying to the common people - "Hey, the law is highly subjective, just get a good lawyer, we (SC, agent) will legal-bash the objector and make him pay for daring to speak up".
I'm sorry but after Mas Selamat and Airview Towers, I think I'm not alone in having very little faith in the Singapore legal and governmental system, or the law for that matter.

It really drives home the simple point that has been raised here and by others again and again: Enbloc applications should be presided upon by judges, not the STB. If it has to go through 3 layers before a 'definitive' (and I use this term sparingly) judgment can be reached, why not cut out the STB and the High Court, and just have a tribunal of 3 judges to preside over any enbloc application that has objections? Saves a lot of time and money, if you ask me. And heartaches and headaches, I'm sure too.

Saturday, 19 April 2008

Suggestion of Short Term Lease to be Included in SPA

Received this email from an owner whose estate is due to be torn down in a few weeks' time. He made an interesting suggestion for inclusion in the Sale and Purchase Agreement - for developers to consider short term lease for owners one month before the Date of Vacant Possession. Reader has requested anonymity.

Our estate has already gone en-bloc, and the Date of Vacant Possession is end of the month. We were given 6 months from Completion to Date of Vacant Possession (DVP). However, as owners and residents slowly started to trickle out of the estate in the last few weeks before Vacant Possession, some of them began to contact the developer asking for an extension of the DVP. I was one of them.

Why would people want to request for extension, if they know they have 6 months to clear out, I'm sure some may ask. After all, 6 months is a long time to get a new home ready, renovated, moved in.

  • Some people have kids still in school, and moving them out during school time isn't ideal or appropriate.
  • Some have to do renovation work, and that can get delayed and delayed.
  • Some bought units that became available, and are now rushing to have renovation done.
  • Some have work commitments that cannot be adjusted to the developer's deadline.

Some of us called the developer individually, and the developer categorically said no to us all. This was about 1 month before DVP. About 2 weeks before DVP, the developer turned around and asked if any of us were interested in a short term lease. To some, it was too late - they'd already moved out but they said if given a choice, they'd have taken up the lease. We were about to move, so we were interested - any extra time is useful for us. But wait, there's a catch... There's a minimum period, the rental is at market rate, and unless enough people signed up, there won't be guard or cleaning services.

Unreasonable! The place is becoming a waste dump with people leaving and dumping their things everywhere. The mosquitoes are rampant because of the abundant puddles of water (and abandoned fishtanks). And they want market rate with no cleaners or guards?

We heard the same situation with Leedon Heights. People there were given 8 months short term lease, but were offered it so close to their DVP that it doesn't make sense. Many of them (and us) have already made preparations to move out - movers, termination of services, temporary storage, temporary accommodation - that a LAST MINUTE OFFER of short term lease just isn't practical.

I can only imagine what is going to happen when Farrer Court hits the DVP. As it is, renovators are so busy that they can't commit to schedule... movers are fully booked up... how 600+ owners from Farrer Court plus hundreds more from Leedon Heights.. Farrer Road and surrounding areas will be jammed with movers and renovation workers!

I would strongly suggest, in the future, that all owners push for an additional clause in the Sale and Purchase Agreement: That the buyer will offer a short term lease for owners and residents, at least 2 months before the DVP, so long as they do not intend to immediately tear down and develop the land. The terms of the lease should be aligned with market rates and conditions (including retaining essential services in a condo), and should allow owners to target the main school holiday periods (June, December) for them to leave.

This will be of great use to all owners, so that they don't have to rush around looking for temporary lodging, and can wait until it is the right time to move. Developers can benefit from the rentals of an otherwise empty estate. Can't see why it can't be done!

Wednesday, 16 April 2008

Three Perspectives on Land Acquisition

Read three rather interesting articles from three different sources - Business Times, The New Paper (really), and a Blog.

First, A/P Mak Yuen Teen from NUS Business School wrote a letter to the BT Editor, in response to a BT article on Saturday (here) about a possible MinLaw review of the enbloc amendments. The letter really deserves to be read in its entirety (available here) but let me extract some really great points from A/P Mak:

However, I would like to urge the government to go further than that. I hope that we do not approach en bloc rules purely from the perspective of urban renewal or economic development. En bloc sales should also not be driven primarily by the commercial interests of property developers, consultants, agents and advisers, but rather by the interests of those who are personally affected by en bloc sales, be they majority or minority owners, and the wider interests of society.

As we move towards a more caring society and recognise people with more diverse talents than just academic and business success, we should also take into account the wider societal and environmental impact of en bloc sales.

Can we have the moral authority to play a leadership role on the world stage, which is increasingly concerned with wider societal and environmental issues, if we disregard them in our own backyard?

What are the wider societal and environmental costs of tearing down perfectly good buildings and dislocating communities compared to the economic benefits?

Let's hope the government has the foresight, and the courage, to take the higher road of considering, seriously taking into account, the "societal and environmental impact" of enbloc sales. These have been raised in Parliamentary Debates in 2007 and back in 1999, so it's a matter of whether the policy makers and law reviewers want to assume the "moral authority" or not.

The 2nd article is from the New Paper (available here), about a man who refused to sell his home, despite agents badgering him to. While it's about a landed property, his tenacity and refusal to sell his home should be an exemplar to all stayers, whether they live in condos, or landed homes. As he said, "I want to stay here until they have to move me out". How I wish that can be the case in condos!

Finally, a rather interesting enbloc blog "Enbloc Outlook 2008" appeared recently, very quickly populated over the last few days with enbloc news. From my quick reading of it, especially the blog post of 14 April (here), I'm assuming that the blogger is pro-enbloc, and lives in Tampines Court. He/she gave, what I must admit, a good argument for the sale of Tampines Court to be pushed through. Still, while I'd love to argue point by point, recent workload and events have limited me to posting his/her link here. Feel free to write on his/her blog.

To Enbloc or Not to Enbloc, That is the Question for 2008

Concerns about the US Economy and the Global Economy in general, economic slowdown worldwide. Research reports from real estate firms like CB Richard Ellis (here) which points to a drop in interest in private non-landed investment sales (as compared to the government tenders):

"Compared with the heightened investors’ interest in en bloc acquisitions seen in 2007, demand for private residential land turned lukewarm in the first quarter of 2008. Developers were observed to be less keen to acquire sites compared to last year as most of them have built a relatively strong inventory of freehold residential sites from the robust collective sales market in 2007. Purchases were limited to choice locations as response to recent new launches was subdued." (CBRE Singapore MarketView Q1 2008)

UBS Investment Research (available here) is even more cautious, pointing out that "real economy and home prices could worsen here, before recovering in 2009", and with negative news from Dakota Crescent and Sentosa Cove, home prices could be forced down further, with "high end prices most at risk due to lack of foreigner interest". They also pointed out that some of the enbloc sales that were bought during the frenzy last year, may now no longer be generating profits (if at all):

"Prices at some locations seem to have already fallen by 15% or more, bringing into question the profitability of certain sites bought by listed developers such as SC Global and Ho Bee."

So why do people still persist in trying for enblocs this year?

  1. Condo raiders and investors who bought units last year, need to push for enbloc sales this year, before prices plummet and they can't even sell on the open market for any profit (or worse, a loss). Unless they have holding power to tide them through in estates that some of them have encouraged to deteriorate (hence making it hard for rentals), they are in financial trouble.
  2. Estates that have achieved 80% consensus but failed to achieve a good bid, are now retrying, with many agents urging owners to accept a lower RP. They need to do this before their 1 year mark to obtain a sale expires, and they have to restart the collection of 80% again. Now adjusting the RP, especially to lower it, WITH OR WITHOUT owner agreement/permission is entirely up to how the CSA is drafted, so as always check with your lawyer on the conditions that allow SCs to adjust the RP downwards. You can read the BT Article on the race against enbloc clock here.
  3. Plain arrogance and stubbornness, as overheard from a rather loud conversation between what appears to be SC members at a coffee cafe a few days back. They were absolutely convinced that "owners are sheep" and can be pushed into the sale, and that they must achieve the sale or no agent will take them on anymore. Colourful languages were used to describe owners who refused to sign the CSA, including the use of the words "idiots", "hammer them", along with various rather interesting suggestions such as not cleaning their corridors, ignoring maintenance near their flats, and for one member, even encouraging his kids to play the piano louder at nights, to irritate the stayer next door. Pats on each others' backs followed after such great suggestions. Pity no name of estate was divulged or I'd SO be contacting stayers there. Tip to SC folks: Don't discuss strategies in a public area where potential anti-enbloccers might overhear you and blog about it :)
I'm sorry but I was quite tickled by the SC conversation that I just had to write about it. Pity I didn't bring my trusty digital recorder but even then, the ambient noise in the cafe would make the audio hard to listen to. But thankfully not for God-given natural ears :)

I should visit that cafe more often lol :)

Saturday, 12 April 2008

A review so soon? Possible MinLaw Review of Amended Enbloc Law

If you haven't heard the news, this quietly came out this weekend on the BT paper - MinLaw may be planning a review of the revised enbloc law. You can read the full article on condosingapore here.

I'm surprised that a review is happening so quickly, barely 6 mths after the amended law kicked into being in early October. Why am I surprised?

  • It would make more sense to do a review of the law, in its entirety. That is, it'd be a better use of manpower and resources to wait for at least 1-2 years, see how the new law has worked through from start to finish (STB stage), so that any kinks in the entire stream can be analysed and worked out. Does that make sense?
  • Right now, given the dearth of enblocs going into the market, most estates attempting enbloc would have gone through, at most, the first 2-3 EOGMs. I suspect no estate post-Oct have hit the Public Tender stage at all. Most tender announcements are for pre-Oct attempts (80% achieved before 4 Oct 2007). So, the most anyone can say anything about the new amendments, is what's going on in these EOGMs.
  • The BT article stated categorically that MinLaw has been keeping track of its feedback from the public via it's service enquiry line (eg contact@mlaw.gov.sg) and other channels. Now most "affected owners" may have written in to complain about the problems with the new law, especially with regards to EOGMs, the constitution of the SC, the selection of lawyer/agent, ie the early stages. If they complained about other stages of the enbloc process, it'd largely be an academic exercise because it has not happened yet in their estates. Any other complaints or suggestions will have to refer to the situation pre-Oct amendments, and I'm sure lots of us, in the middle of last year, wrote in during the Public Consultation with our 2 cents worth on the pre-2007 law.
  • However, what is happening now in the market?
    • Not more than 5 enblocs since the new law. Bad for business - for agents, lawyers, developers, construction industry, or and stamp duty.
    • Problems from estates trying to kickstart the enbloc process.
    • Difficulty trying to obtain requisitions for EOGMs
    • Problems holding EOGMs of which some have quickly devolved into ugly shouting matches
    • Increased costs from legal and agency fees
  • The last point I'm taking with a pinch of salt because it is in the interest of firms to gain as large a profit as possible from the enbloc sale. The increased costs is not a concern to firms except when owners are now seriously reconsidering going for an enbloc try.
So let's see - Thus far, maybe only EOGMs, forming of SC, hiring of lawyer/agent, looking at CSAs have happened. A review at this stage would be premature if it's only about such problems. So why trigger a review?

I'd conjecture that the lack of enbloc attempts since the amendments has suddenly worried the Ministry, esp if given feedback from stakeholders such as developers, SCs, marketing agencies and enbloc lawyers. After all, the amendments were meant to strike a balance between protecting the rights of owners, and facilitating enbloc sales. Some would argue that the balance has tilted to the left a bit too much, with enbloc sales being stalled, halted or derailed.

So stakeholders might want clarity about the new law. Nothing wrong with that. More clarity is good for everyone. What everyone should start to get worried about, is if stakeholders want the law RELAXED.

What can you, as a concerned owner, a stayer who wishes to keep his/her home, do?

Chances are you'd have gone through the early stages of the enbloc attempt under the new law. Write to MinLaw about your experiences with the problems in the early stages. Some examples may be:

  1. Bullying or disorderly behaviour during EOGMs.
  2. Lack of procedures concerning voting procedure - raising of hands (dubious count) vs proper ballots.
  3. Lack of clarity on the possibility of an owner to submit a motion for the EOGM.
  4. Lack of clarity on what it means to "consider" something at EOGMs ("consider" is used in the Third Schedule of the LT(S)A Section 7 which details the purposes of the EOGMs).
  5. Lack of clarity on whether owners can ask questions and obtain responses from the SC, agent or lawyer, during EOGMs. Some estates have refused owners to speak during EOGMs.
  6. Can items in the CSA override the intention of holding EOGMs? Eg in some CSAs are clauses that states if you sign the CSA, you automatically agree to be included in all future requisitions by the SC for EOGMs. This means the SC need not start 'from scratch' to get people to requisition the EOGM, but can rely on everyone who signed the CSA, irregardless of whether you disagree later on with the sale.
  7. Problems with Management Council members who are in the SC, and who refuse to provide a fair representation from minority owners or people who wish to query the enbloc sale.
  8. Sequencing of EOGMs - Lack of clarity on whether some EOGMs as outlined in the Third Schedule can be collapsed into others, so instead of holding 3 EOGMs to vote in the SC and select lawyer/agent and CSA, all can collapsed into 1. Is this allowed?
Think about these items and whether you've encountered them (or any others that I may have missed). Write here in the comments section (where I'll gladly compile, but please leave a contact email for further correspondence!), or directly to MinLaw's feedback unit.

If you don't, all MinLaw is going to get in terms of feedback for the review would be from stakeholders who may well say (among other things):
  1. Amendments have effectively stalled the process and prevented the urban renewal of Singapore, the basis of the enbloc law.
  2. Suggest that EOGMs be compressed into 1 or 2 at most.
  3. Any requisition for EOGMs should automatically apply for subsequent EOGMs.
  4. No motions allowed to be entered, no voting allowed, no Q&A for more than 10 seconds
  5. In general they will paint a bleak picture of EOGMs and the process being stonewalled by administrative and logistical difficulties as well as resistance from anti-enbloc owners.
Would you prefer these immediately prior points to become reality? If not, get ready to consolidate your thoughts onto paper.

Good luck.

Being Bullied: What to do in Out-of-Control EOGMs.

We've heard this before, and maybe even experienced it ourselves.

Name calling.
Shouting for you to sit down and shut up.
Telling you off, saying you had better stop talking because people have better things to do.

No, I'm not talking about a teacher scolding students. I'm talking about an Enbloc EOGM. But truth be told, the idea's the same - someone of perceived 'greater' authority talking you down, like you're an idiot and what you say is insulting the audience.

We've been told, in recent EOGMs, the following have occurred:-

  • Owners not allowed to speak or ask questions during an EOGM
  • Owners not allowed to vote at an EOGM
  • Owners told off by other owners, or SC members, to shut up
  • Owners even threatened (verbal and gestural means) to stop talking and leave the room
  • Owners not allowed to query the SC, nor will the SC bother to respond
What can you do?

  1. Direct from the Parliamentary debate in Sep 2007, a quote from Ms Irene Ng (Tampines GRC) in response to Prof Jayakumar: "The Minister mentioned, in his answer to my oral question in the last sitting, that any owner who at any time feels that he is being harassed or intimidated to consent to an en bloc sale may lodge a Police report." So 1 route to take - Police Report. The aim is not to threaten back, but to ensure a "civil and restrained behaviour" from everyone.
  2. If you have been prevented from voting: Check with a lawyer familiar with enbloc laws and the Building Maintenance and Strata Management Act (BMSMA). See if their stopping you from legitimately voting may constitute a breach of the BMSMA (Section 104) where an owner was improperly denied a vote on a motion. If this is the case, apply to STB to have the resolution repealed. You can find more information here.
  3. If you've been bullied/shouted at/name called: Don't lose your cool, nor be impatient, nor should you retaliate or respond to the bully. Their aim is to make you look the fool if you lose your composure. Instead, speak DIRECTLY to the Chairman of the Management Council (who should be present at the EOGM) and request that the Chair tell the bully to calm down. It is the responsibility of the Chair to ensure the meeting is held in an orderly fashion, after all. If the Chair is pro-sales, or in the SC, see point (4) below. Irregardless, it is his responsibility to ensure the EOGM is conducted with due diligence. If he doesn't, just ask him "So can it be minuted that I, the owner of Unit X, has requested for order to be maintained at the EOGM, and the Chair has declined to do so. The owner of Unit X would also like to remind other owners that if they feel their time is wasted by me, they are welcome to leave the EOGM. Please leave your contact details with the MC Secretary or Managing Agent, so you can be contacted when voting begins". Follow this with a nice, polite and wide smile. Ensure that if order is not maintained, that it becomes minuted that you have explicitly requested the Chair to do something about it.
  4. If the Chair is pro-sales, or in the SC even, BMSMA Section 61.2 applies: "(2) A member of a council, or an officer or an agent or a managing agent of a management corporation, shall not use his position as a member of the council or as an officer, an agent or a managing agent of the management corporation to gain, directly or indirectly, an advantage for himself or for any other person or to cause detriment to the management corporation." You can lodge a complaint with STB that the Chair or Managing Agent is not performing their duty when they refuse to maintain order in the EOGM. And get any resolution from that EOGM repealed. Again see the list of complaints that you can lodge with the STB here or read the relevant section of the BMSMA Act here. (Yes, STB handles not just enbloc sales, but complaints from subsidiary proprietors.)
Always consult your lawyer on the possible actions that can be taken against an out-of-control MC or SC who refuse to treat you like an adult and a human being. Another lawyer pointed out that a 'declaratory order' can be made against the SC/MC, but you'll need to obtain more information from your lawyer about this.

I don't like to be bullied. I like to bite back, but in EOGMs, I'd like to bite back where it hurts most - legally and legitimately. The sting will last for a while, I'd think. :)

Of course, you should act a gentleman (or lady) and be mindful of all owners - if you wish to ask questions of the SC/MC/Lawyer/Agent during an EOGM, keep things short and to the point. Don't prepare to bombard 1000 questions at them, or you will lose your credibility as an intelligent and concerned owner who just wish to let everyone know there are serious issues with the sale. Keep to the big issues, and keep to the point.

Sunday, 6 April 2008

A Downgrader's Nightmare

Received this email over the weekend from a reader. I can fully empathise with him, since I'm pretty much going through the same nightmare myself. For all those who have a home that they are thinking of enblocking, please read this cautionary tale.

Reader, I feel for you.

In a few more weeks, my family will be kicked out of our home.

Yes. KICKED OUT because of a successful en bloc which we did not agree to.

A home that was renovated not more than a few years ago, from top to bottom including brand new marbled floors, new fixtures, new furniture, everything from scratch. We thought, naively, that it was to be our home for the next few decades.

Barely after we moved in, a pro-tem SC proudly announced the en bloc. Our estate was not old at that time. It now looks run down because EVERY upkeep and updating of the estate was put on hold. This just before they started the en bloc attempt.

My family refused to be subjected to en bloc again. We thought fine, let’s get ourselves a new condo, so that we can have at least 10 years of peace before some IDIOT decides to champion an en bloc at our new home. Because of the property market boom, we had no choice but to buy a property, downgrading from a 1800 sqf perfectly renovated and absolutely spacious home on a quiet road, to a 1200 sqf home near a main road with all sorts of useless corners designed by architects who looked like they have never tried living in an apartment.

Then the nightmare started. Almost all our furniture could not fit the new place. They have to be replaced with smaller versions. We have a tight schedule within which to move home, install new fixtures in the new home, get furniture, get quotations for movers, cancel utilities, transfer utilities, change of addresses, all these amidst our hectic lives.

We will make no profit by the end of our move when we factor in what we’d spent for our old home, and what we need to spend for our new one.

We are frustrated, upset, that this is happening to us. People who say “just move elsewhere” do not realize that it isn’t that convenient, practical nor even realistic to do so. SACRIFICES always have to be made when we move homes, and EVEN BIGGER SACRIFICES when we move from a cherished home.

People who are thinking of signing the Collective Sale Agreement, of that profit and windfall – think carefully, especially after you’ve factored in all the other costs. If you’re not losing your home, then that’s not a problem. But if you have to move, how often are you prepared to do so, and what’s the cost to you, your family, your finances, when you do so?

Those residents who eagerly signed for the en bloc in our estate, and who have to move now, are regretting it. We say to them, TOO LITTLE TOO LATE. They could have kept their homes and not have the hassle and trauma of moving, but they were BLINDED by what they thought was going to be profits.

Are we angry? Yes! For losing our home which we love and built, literally from the bare cement. For policy makers who do not CARE about the consequences of en blocs to people’s lives. For individuals who do not care about people who have valid reasons to STAY in a place they love. For a society that continues to NAIVELY think that en blocs are great.


How Minute Should the Minutes of the Meetings Be?

There's been some questions raised recently about what should be included in the contents of the Minutes of an enbloc EOGM. Some argued that the minutes should only contain the resolutions, nothing more. Others say that minutes should be as detailed as possible so that people can be kept informed; it should include, for example, question and answers, comments, queries, issues raised. The amended LT(S)A is 'quiet' about this, aside from requiring that minutes of EOGMs be kept, and they be displayed or passed to owners.

First, let's get back to the amended LT(S)A. Prof Jayakumar during the 2nd reading of the amendments on 20 September 2007 clarified the reasons for the amendments. He pointed they are for procedural clarity,to "provide additional safeguards and ensure greater transparency for all owners" (Reading available here). So safeguards and transparency for all owners are among the main rationale for the amendments to the law.

Second, let's look at corporate practice. In 2003, the investor watchdog body Securities Investors Association of Singapore (SIAS) urged listed companies to keep detailed minutes of shareholders' meetings. They strongly suggested including "comments and queries by shareholders and responses by the board and management" (BT 18 Feb 2003). This, they argue, will improve best practices in accountability, transparency, corporate governance, and will make the company more responsible to the shareholders. From the BT article:

Members complain that many companies refuse to record even the gist of relevant questions asked by them and answers given by the chairman of the meeting,' the statement said. 'Especially in the current environment of greater shareholder participation at general meetings and the emphasis on greater transparency and disclosure, Sias finds this practice of keeping skimpy minutes to be totally unacceptable.'

'Not to record comments or queries from minority shareholders represents total disregard for and disrespect of minority shareholders. It expunges whatever they have said from the institutional memory of the company. It is as if they never said anything at the meeting, as if they are too unimportant to say anything worth recording.'

Are there examples of companies that provide detailed minutes? Microsoft publishes a verbatim transcript of their AGM online, as well as the AGM video. Locally, Qian Hu Corporation published detailed minutes of their AGM, earning them Investors' Choice Golden Circle Special Merit Award for transparency (BT 13 Mar 2004).

Shouldn't what SIAS suggest be the same good practice for our enbloc EOGMs? After all, isn't the law amended to allow for greater transparency and more safeguards for all owners, including minority owners?

Or to paraphrase SIAS, do SCs that choose not to provide detailed minutes of their EOGMs have a "total disregard for and disrespect of" owners who have the courage to stand up, ask questions and raise issues with the sale? "It is as if [such owners] never said anything at the meeting, as if they are too unimportant to say anything worth recording."

SIAS warned that one consequence of having skimpy minutes is that because shareholders feel they are insignificant, they are less willing to ask questions. Perhaps this is what SCs hope for - a subservient group of owners who will just nod, agree, and do whatever the SC wants them to do.

There should be no reason why SCs cannot provide detailed minutes of EOGMs, including the minuting of questions, comments, issues raised by individual owners and the responses from the SC. None, unless they do not think highly of 'transparency', 'safeguard', 'responsibility' and 'accountability.

Friday, 4 April 2008

1996AD (Not exactly 10,000BC) - Origins of Enbloc Nightmare?

I've just had an interesting discussion about the recent Channel 5 TV series called "En-bloc". Putting aside the sensationalism of what is really a traumatic experience for many people, and the rather stereotyped portrayals of 'anti-enbloccers' in negative ways, it made me wonder how did our existing enbloc laws (allowing for majority consent) really start.

I dug around the ST archive as far back as I could.. Pre 1997 Amendments that changed the enbloc law to allow for an 80%/90% majority consent. Back then, property consultants involved in enbloc sales pointed out that the larger the estate, the lower the chance of a successful enbloc simply because it's plain harder to get that unanimous 100% consent.

I found, in May 1996, several ST Forum letters including a 1000+ worded letter (1000 words!) that sounded about the right time to get the government to rethink enbloc policy (about a year to the 1997 Parliamentary debate). The 1995-1996 period was also the time when SERS or Selective En Bloc Redevelopment Scheme was implemented, which saw HDB flat prices escalate phenomenally. I'd argue that the SERS got the public consciousness to link enbloc = profits.

But why limit the windfall only to HDB SERS? Why not private condos? It's true that at that time, enblocs are possible, just incredibly difficult due to the 100% consent.

So back in May 1996, Mr John Christopher de Souza and Mr Ronny Sim suggested in their ST Forum letters a revision of the enbloc law of 100% consent. Mr Sim, for example, calls it an 'exit strategy' for condo owners - a revision of consent to 75%. These were followed by an ST commentary by Tan Sai Siong, putting into public discourse the term "the tyranny of the minority". Arguing that buildings that are over 30 years old will fall apart because it's the end of their life cycle, Ms Tan again brought up the profitability of SERS for HDB estates, and suggested 75% or 90% as suitable thresholds.

You can read the full texts (which I won't reproduce due to length) here on scribd.

These were followed by 2 letters by Martin Goh and Laena Tambyah, very prescient of all the troubles we face now regarding enbloc sales. I'll reproduce them since they're short :) (You can read them in the scribd link as well.) I wonder if we ever meet the writers of these letters now, almost 12 years later, what would they say?

(As a note - 1996 was about the time when the government imposed a major curb on property speculation, especially for enbloc sales - the taxes on capital gains. Reports suggested that the taxes did not deter people from investing in enbloc potential estates, with a record number of enbloc sales in 1996 - despite unanimous consent required.)

The Straits Times (Singapore)
May 13, 1996
Forum; Pg. 28
En-bloc sales: Owners should not be forced to sell property

I REFER to Mr Ronny Sim's letter "En-bloc sales: Exit strategy needed" (ST, May 7). While I agree with him that there is a need for old estates to be upgraded via redevelopment, I find the idea of a Bill to deny the minority their right to object to a redevelopment proposal absurd.

Most en-bloc sales promise incredible profits. Under normal circumstances, any person would be enticed to offer his property for a collective sale. But there are some who may have reasons to object to such a sale. One example could be that of a property inherited from a loved one. It may have great sentimental value for which no amount of money can compensate. Imposing a "majority wins" rule defies all fundamental rights in property ownership. It may also give rise to abuse by unscrupulous individuals or groups for selfish gains.

I sympathise with Mr Sim's frustrations, but I cannot agree with his suggestion for legislation. I find it fascinating that a Member of Parliament supported his suggestion to force an individual to sell his property against his will, just because the majority thinks it is a better option.


The Straits Times (Singapore)
June 8, 1996
Forum; Pg. 36
Spare a thought for the elderly who may not need fancy condos

THE letter "Don't pursue dreams at the expense of others" (ST June 3) is timely.

One aspect of materialism at the expense of others that is not mentioned is the singlemindedness with which some Singaporeans are pursuing the possibility of making a killing through en bloc sales of condominiums.

I have heard, on more than one occasion, comments such as "There's one old woman holding out" and "If only that old couple would be more reasonable".

The elderly folk who are holding out and appear to be unreasonable have probably spent all their CPF and other savings on purchasing these particular apartments.

In all likelihood, valuing their independence, they bought their homes for proximity to family and accessibility to shopping and transport. In their twilight years, they are expected to uproot themselves and move to unfamiliar surroundings.

There are no retirement villages or similar facilities in Singapore where the independent elderly can retire in comfort and dignity.

Where are they going to move to? Will banks consider them credible clients for loans to purchase new property?

The elderly may not want or need the new fancy condos. If the younger folk yearn for luxury amenities, perhaps they should take a lesson in thrift and patience from their elders, and in due course they will be able to afford (with a clear conscience) those tempting dream condos instead of hoping to make a fast buck at the expense and inconvenience of our senior citizens.


Another Plea to Save Another Estate - Clementi Park

There's another estate that is going enbloc and the group of stayers there - people who are fighting to protect their homes - have set up a website to describe their estate and why it should be saved.

Save Clementi Park

Great website! I strongly encourage other estates which may be going through the trauma of enbloc sales, to set up their own blogs or websites. It's a great means of publicising your estate's virtues and your intent to try to save it from destruction oops I mean redevelopment. It can also serve as an information point to keep owners updated on the ongoing enbloc, especially if not everyone is consistently updated. This has been the case in a few estates where the pro-enbloc SCs have been systematically ignoring some people (ie stayers) in their mailings, an act that is not only wrong ethically but legally.

Setting up a simple blog isn't hard. No bells and whistles necessary :)