Is Singapore Your Oyster - Proximity and Amenities

Most agents, pro-sale owners and even Mr Mah Bow Tan, would point out that should the sale proceeds be insufficient to afford you a similar location home, you can always move further afield where properties might be cheaper.

A Voices letter in Today Online raises an important issue - what intangibles do you lose when you move "further afield"? The letter by Mr Francis Hong (reprinted in CondoSingapore here) is about 500 patients who petitioned to HDB to retain their family GP when they are forced to relocated for a SERS (Selective En Bloc Redevelopment Scheme) on their estate. Mr Fong points out that the need to be close to certain amenities is not one of luxury but "one of necessity".

What amenities do you lose when you are forced to move away from a community that you are familiar with? How do you calculate the loss of such intangibles, when factoring in what you'll get from the proceeds, and what you'll lose from your home?

Some examples:

For children: Parents often relocate to within a certain boundary around a school of their choice, so that there's a higher chance of their kids going to that school. They have to, without any choice, continue to stay in the same area for their childrens' future.
For parents: Any parent with more than 1 child knows that if they have to send their kids to school, they want (a) their kids to be in the same school/kindergarten ideally (b) a school/route that is convenient for them, enroute to work ideally. Moving home will disrupt this, often requiring that they wake up earlier just to get the kids to school on time.
For elderly: Psychologists have pointed out that as you get older, you want to have familiarity around you. Grandparents hate it when kids come into their homes and really mess things up. Likewise, when old people venture out, they need familiar routes, places, landmarks. Moving home is disruptive, and often traumatic.
For families: Loss of clinics that they have been with for decades, loss of friends and neighbours, people who'd keep an eye out for their homes when they're away on holiday.
For working adults: Unless you move to a home nearer to your place of work, chances are you'll have to device new routes to work. Further afield may well mean longer travelling time, more traffic to encounter, and waking up earlier/coming home later.

These are very real factors that will affect you if you move home, whether by choice or not. These are very real reasons to think about before you decide to enbloc your home or not. I know of people who have spent the past 6 months trying to find a new home for themselves, visiting flat after flat to no avail. Perhaps in 3-4 years' time, one might find a glut of new units flooding the market, but there's no guarantee that prices will not escalate beyond your reach (a very real possibility).

Do you cherish the conveniences and necessities that you have taken for granted, things people and places that will disappear at the stroke of an STB approval?

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Tags: collective sale, collective sales, en bloc, en-bloc, en-bloc sale, enbloc, enbloc sale, singapore

Devonshire Lodge - Minority Owner Seeks Legal Action

As predicted, more and more minority owners are now plucking up their courage to seek legal action against their enbloc sale. Channelnews Asia reported yesterday on a single minority owner who plans to fight the enbloc sale of Devonshire Lodge in Devonshire Road, a building that's just over 10 years old (TOP 1996). There were no news report on the sale but a caveat lodged with URA on Mar 2007 showed the estate comprising 27 units was sold for $35,680,000 (although CNA reports it at $37.2m).

You can find the CNA news here (including a video). Mr Philip Fong from Harry Elias Partnership (Currently representing Horizon Towers' minority owners) mentioned some possible grounds for taking the sale to court - "inadequate marketing, the sale was rushed into, suppression of facts". He also pointed out the minority owners face an uphill task since they are "not privy to what went on during meetings to discuss the sale of a property" and "they do not have easy access to the sales committee and documents". The CNA also reports that typical minority objections are on grounds of "sale process" and "valuation".

Estate: Devonshire Lodge, Devonshire Road
Stage: Sold at $37.2m in Mar 2007
Party: Sole minority owner, Mr Jeffrey Lai. Lawyer to be hired. No STB Hearing date yet.
Collective Sale Lawyer: Toh Tan & Partners
Developer: Evan Lim & Co
Reason: Sale amount for the estate may not be in line with valuation.
Details: (CNA) "some owners are having second thoughts", "we want to know that it's a fair valuation when they sell the property". Mr Lai plans to obtain an independent valuation report
for submission with his objection to STB.

Tags: Devonshire Lodge, collective sales, condo, en bloc, en-bloc, en-bloc sale, enbloc, enbloc sale, property, singapore

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Post-Enbloc Sale aka Free-For-All

A forum letter in the ST today highlights the fact that while our enbloc legislation is very precise in the execution and protocols surround the SALE of the estate, it is extremely woolly about the CONSEQUENCES of the sale, ie what happens after the owners get their hands on the profits.

What happens? Well, after legal completion (the point when most owners get their sale proceeds), the land belongs to the developer. The managing council will be dissolved, there won't be a managing agent, your estate is in the control of the developer. Even though there are people staying there (including children and elderly), the developer (subject to the conditions stated in the SPA) often has the right to invade your estate and put up signboards, erect show flats (yes, in plural), conduct preconstruction testing and drilling. Your security will have a hard time keeping up with who comes in and when. In fact, as my post all the way back in Jan 2007 showed, expats have complained of developers not even maintaining the quality of the estate's service and maintenance (even though owners and tenants staying there after completion are still required to pay maintenance fees) and worse, creating all sorts of health and safety hazards on your land.

But who cares? Pro-sale owners have their money and are gone from the place. The only people left - tenants (some of whom are not even aware the estate's being demolished) and residents desperately looking for alternative homes, hoping for a bullish market to show any sign of slowing down.

What can you do? Nothing much, since any SPA is decided by the sale committee and the developer (with their lawyers), and if the developer wants to come in, will any SC say no? The only hope you have - do not sign the CSA until you get a rock solid written promise from the SC not to allow developers into your own, especially if you are planning to stay there. I'll update if I have more information on what legal recourse tenants and residents have against developers creating health, noise and safety hazards in your estate.

As a colleague wrote to me, "if civilians are required by law to wear safety gear when they enter a construction site, what happens when the construction site enters your home?"

Straits Times Printed Forum
Aug 13, 2007
En bloc sale: Work starts even before all move out
Chio Tan Seng

AMID all the stories on collective property sales readers of The Straits Times have come across, mine in Balmoral View has a twist.

The developer has moved in equipment to build a showflat even though seven units of this 22-unit condo are still occupied.

It means we cannot use the visitors' carpark and the recreation areas, apart from having to tolerate the dirty swimming pool, noise and dust. In the meantime, we are still billed for monthly maintenance.

Yes, our condo was an early bird in the 'en bloc wave', and prices paid to unit owners were low compared to the current level. We accepted the deal, and the last unit must be vacated by November.

But what right has the developer to rush in before everyone moves out?

Some to-ing and fro-ing with Building and Construction Authority officials revealed that, although the deal was completed in May, the developer had already applied for and got the necessary approvals from the Urban Redevelopment Authority (URA) to build a showflat in February last year.
Did the URA check with the Strata Titles Board on the legality of such a move, given that there are residents who do not need to move out until November?

By mid-June, heavy construction equipment was moved in and the construction of the showflat is now in earnest. The recreation area has been cordoned off.

Also, I see obvious safety concerns with children playing in the compound, especially with wooden scaffolding less than a couple of metres from the swimming pool.

I understand the developer's haste to catch the hot property market but this is at the expense of residents still living on the estate.

Can the authorities enlighten us on this unsatisfactory situation?

Tags: completion date, construction work, collective sale, collective sales, condo, en bloc, en-bloc, en-bloc sale, enbloc, enbloc sale, singapore

Myth #9: Understanding the Law and Knowing Your Rights

Nominated MP Siew Kum Hong wrote an op-ed piece to Weekend on 11 August 2007, which highlights his very thoughtful views of enbloc sales in general, and the Horizon Towers situation in particular. I will not reproduce his entire piece, but you can find it on CondoSingapore's Forum here. Note - Mr Siew has his own blog and has posted additional comments on his piece here.

I do want to comment on some of his points, specifically his argument that "just like any other commercial transaction, there are very real commercial and legal risks in collective sales":-

"With so much at stake, inexperienced sellers could and should have engaged lawyers to advise them personally. It is the sellers' own responsibility to ensure they understand all their liabilities and comply with all legal obligations.They also could and should have negotiated for terms they are comfortable with."

"If a seller is uncomfortable with the collective sale agreement (CSA) which binds the sellers collectively, he or she could always not sign it. If the concern is over the SPA with the purchaser, then a seller can seek to impose greater controls and oversight over the actions of the sale committee before signing the CSA. It is difficult to sympathise with a seller who sees only the promised dollar signs and signs without fully understanding its implications."

What Mr Siew said above is the correct interpretation of the law, and of common sense, truth be told. Everyone should read carefully the terms and conditions of anything they sign (be it credit card application, signing up an account on a website, installing a software). But the reality is very different of course (how many read the Microsoft terms and agreements before clicking on the "I agree" checkbox?). But putting aside human laziness to read such text, there's another set of very real problems that works in favour of the sale committee, the marketing agent, lawyers and developers, ie the enbloc sale:-

1. Anyone with a non-law degree, much less a non-law PhD, will struggle with the CSA and the Sale and Purchase Agreement (SPA). In densely packed multiple subordinate and embedded clauses, these contracts can induce migraines simply by attempting to understand it. If people can barely understand it, how can owners who (a) can't understand English, (b) can't understand legal English, (c) do not have the resources to get a lawyer to read it, realise what rights they have or do not have? If the law requires that the advertisement and announcement of the sale be in 4 languages, why can't the law require that the CSA be in 4 languages as well as plain English?
2. Most people assume that the sale committee (SC) are selfless people, who represent their interests and rights, and hence will not question in detail the intricate clauses in the CSA/SPA, which is almost always drafted by the SC and lawyers without input from the owners. Most estates have no say whatsoever in the nomination, election, voting and ratification of the SC. How much harder, then, for input into the drafting of a legal document like the CSA or SPA?
3. The approach advocated by most agents, including the professional enbloc firms, is that a SC should not be consultative in the drafting of the CSA; they see this as only taking up more time and a waste of time. So they advocate that the CSA be prepared and at the first Owners' Meeting, have it ready for signing. "Take it or leave it" without any choice in revisions. At what point can an owner negotiate for terms? They simply can't and can only do so by not signing the CSA. But if 80% are ignorant enough to do so, then what good does your refusal do?
4. The best method to ensure a CSA or SPA is truly representative of all owners, including minority owners, and to impose greater control and oversight on the SC is to require that owners who have reservations on the sale/CSA to be a member of the SC as well - a form of check and balance or an alternative voice that gives critical feedback to the over-riding pro-sale mentality. However, every CSA I have seen thus far has a clause requiring that each SC member must sign the CSA within a time frame (typically 7 to 30 days). This immediately excludes any form of "control" or "oversight" when owners who have reservations about the sale cannot offer his/her services to the community, except perhaps as a minority voice posting on a blog.
5. The problem is input by owners into any drafting of the CSA, much less SPA (which is mainly handled by the SC and lawyer in conjunction with the developer), is near impossible. The law does not require it, nor does it form a legal objection in any way when STB hears of it.
   

Mr Siew has his heart in the right place, and has talked about the legal aspect of any contract that one must be cognizant of. Unfortunately, the reality on the ground which many enbloc estates are facing, is that people who wish to negotiate, feedback, discuss about the CSA or SPA, are not given the opportunity to do so. It is a myth that one can know and negotiate one's rights in an enbloc sale. Transparency, accountability, and due process, go against the nature of a quick sale, after all.

And even more unfortunately, only the law can change this.

Tags: Siew Kum Hong, collective sale, collective sales, en bloc, en-bloc, en-bloc sale, enbloc, enbloc sale, real estate, singapore

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.

Tags: Horizon Towers, collective sale agreement, CSA, sale and purchase agreement, SPA, collective sale, collective sales, condo, en bloc, en-bloc, en-bloc sale, enbloc, enbloc sale, singapore

Of Social Good and Individual Rights - Follow up to Lucy Huang's Letter

Another forum letter appeared today as a follow up to Ms Lucy Huang's letter (which I've included in the blog here). Lucy's letter has elicited strong opposing views about en-bloc sales. Some said she should blame herself for buying at a premium during a booming market, others said that she needs to respect the majority vote because of societal norms. Yet others said, if the majority vote is all-important, then reinstate the 100% majority vote. (You can find the exchanges in the post's comment.) I will address these issues in the next few days but here's the letter which empathises with Lucy's plight. Here Jane touches on a crucial issue - that of the individual rights of home owners.

For the record, I strongly believe Lucy to be a victim of enbloc sales, rather than someone who signed the CSA. Of course, any interpretation of a text is possible but given the way she had framed her situation, the dominant reading is that she did not wish to move from her two homes. If Lucy reads this, please feel free to expand on your letter.

Straits Times Online Forum
10 August 2007
En-bloc sales: What happened to fair treatment and rights of minorities?
Ms Jane Ee

I READ the letter, 'Govt should intervene in property market' (ST, Aug 8), and it strikes a chord.

I am also one of the thousands who are being turned out of our homes because of the en-bloc frenzy.

Being forced to seek legal advice, we were told that the only protection that we have by law is that we will minimally get what we paid for our home 10 years ago without bank interest.

We have spent weeks searching for a new home in frustration and realised that we too can only downgrade or move to the very borders of Singapore.

Many of us own a home. If someone walks in through your door today and demands that you exchange your home in Central location with his in Choa Chu Kang, how would you feel?

If someone demands that you sell your house at the price you paid for 10 years ago without bank interest for the mortgage that you have arduously serviced over the years, what would you do?

You can throw the person out the door. Yet, this is exactly what some minority owners in en-bloc sales are forced to accept, without choice.

It is ironical that, as a Singaporean who has worked hard to own our home in this land, I am made to ponder the prospect of losing our home and wonder, in the name of facilitating en-bloc sales and supposed progress of the nation, what has happened to fair treatment and the rights of individual Singaporeans?

Tags: Straits Times, Straits Times Forum, collective sale, collective sales, condo, en bloc, en-bloc, en-bloc sale, enbloc, enbloc sale, real estate, singapore

Property Market Intervention - Reality vs Statistics

Today's Straits Times highlights Ms Lucy Huang's very real predicament of being forced to move home and not being able to find a suitable replacement in the current bullish property market. Her evidence, while anecdotal, is very real and very personal not just to her but many other home owners, particularly owners who are evicted due to enblocs and forced to buy a replacement home in an area they have grown used to, or in a size they need.

I can almost visualise the governmental response: Swanky statistical charts showing 1996 levels relative to 2007 levels which will confirm Mah's statement. Effectively debunking what many on the ground are painfully feeling - the prices of replacement homes, in a community and vicinity they are familiar with, rapidly moving beyond their reach.

In 1995, not far removed from Ms Huang's first eviction, Goh Chok Tong in his National Day speech asserted that "there is no better stake in the country than a flat or a house". Looking at the En-Bloc List I've been tracking from 2006-2007, and considering the increasing likelihood of enblocs going to STB at just marginally above 80% consensus, how many citizens have lost their flats, their stake in the country? (Hint: Thousands.)

Happy National Day, eh.

Straits Times Forum Printed Edition
8 August 2007
Lucy Huang (Ms)

NATIONAL Development Minister Mah Bow Tan said on TV last week that the Government does not need to intervene in the property market yet, because prices have not risen to 1996 levels. I disagree. In that year, we were forced to leave our home because of an en-bloc sale. We spent many months looking for a replacement flat. At that time an HDB executive maisonette in Bishan was going for $650,000; a Lakeview HUDC unit, $800,000; and one at Braddell View, $640,000. A private freehold flat of 1,600 sq feet in Devonshire Road was advertised at $1.05 million while a Cavenagh Court high-floor unit was selling for $750,000.

We are now obliged to find a new home again. HDB five-room flats and executive maisonettes are going for over $750,000; the point blocks near the Farrer Road market, $800,000; Braddell View is now being offered for $1.25 million. Private 99-year-leasehold property like Queens on Commonwealth Avenue are priced at $1.1 million, while prime developments like the one at Orchard Turn opposite Tangs are being booked at over $4,000 per sq ft. All these are way above the 1996 prices.

Thousands are being turned out of their homes because of the en-bloc craze. The money paid to us means either a downgrade or a move to the very borders of Singapore. It is time for government intervention.

Tags: Straits Times, Straits Times Forum, collective sale, collective sales, condo, en bloc, en-bloc, en-bloc sale, enbloc, enbloc sale, singapore