Horizon Towers Update: A Trust that Failed

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

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

Some points to be made so far:-

1. Check your own CSA. Almost every one will have a minimum number of owners needed to be in the SC. This is typically 3 (which is the number needed to represent owners for the STB application) but it can vary depending on the PSC that drafted the CSA. Indirectly, as this case showed, it also allows a SC to be disbanded leaving owners without leadership.
2. The affidavit cites, among other things, the fact that some SC members have (presumably on their own motives) encouraged sellers to rescind the CSA. Yet every majority owner is sued by HPL. The actions of a few SC members have given the fuel needed by HPL to show that the owners (and SC) were not doing their best to secure the sale. What it also points to, is the unquestioning faith many owners place on their SC members to do the best for all owners. People forget that (and not just in HT but in many estates) some SC/PSC members (a) are not even residents (b) are not duly elected (c) are individuals out to make a profit (d) are not necessarily suddenly going to develop strong ethical responsibility to all owners when thrown into the lawsuit fire (neither are they obliged to). After all, as the HT reports showed, those who want to step into the SC insist on "blanket immunity from legal proceedings". It's typically the first thing all PSC members will ask for - indemnity and exclusion from liability. It's in most CSAs.
   
3. The new amendments might resolve some of these problems since it shifts responsibility from SC to owners to ensure everything is as transparent and fair as possible, including the need to revert to owners for the election of SC, agent, lawyer, approval of sale etc through formal general meetings. But some estates are trying to avoid going through such 'hassles'. Will the HT case haunt them in the near future? Isn't it safer to let the new amendments to the LT(S)A kick in and work within the new framework, rather than rush through things and risk legal repercussions?
   

The tv show X-Files theme is applicable here: TRUST NO ONE. Can you put the fate of your home (and more) in the hands of a group of self-motivated people (some of whom don't stay in your estate) who gathered together to sell an estate, with standard CSA clauses to protect them, while often giving them rights to do many things without asking owners for consent under the current law?

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

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

The Horizon Towers Story Compiled Into a Blog

A chap calling himself "Enblock Victim" has painstakingly gone through over 1000 postings and more, to compile the Horizon Towers case into a blog. Now if anyone has even visited the CondoSingapore forum thread on Horizon Towers (currently standing at 1344 posts!), one would immediately find tons of irrelevant (troll) postings which just seek to flame other posters. The fact that CondoSingapore allows unregistered postings has unfortunately helped fuel trolls. But Enblock Victim went through pages of it and compiled various thoughts, comments on the matter into his blog.

So you can read the rather lengthy, but salient, points of the HT case here. Enblock Victim - great work there :) Will update my links accordingly :)

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Tags: horizon towers, collective sale, collective sales, condo, en bloc, en-bloc, en-bloc sale, enbloc, enbloc sale, singapore

Poll! Would you enbloc your home?

Just realised that blogger has a polling system. So the question is simple - Would you enbloc your home? For those of you who've never voted before (walkovers and all that)... Just check one button and click "Vote"! You can only choose one of the choices but with 9 possibilities, I'd have thought one of them should cover your answer :)

Go vote!!

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

Something Completely Different

And now for something completely different :) :)

My texts can be dry and overly serious sometimes. So it's nice to see someone who is much more capable of expressing his thoughts about enbloc sales than I could ever be.

Sei-ji rakugaki (wonder what that means) is one of those rare political cartoonists (at least that's how I'd label him :) ). He drew one on enblocs :) He's done lots of cartoons for other issues too (here) :)


Love the cigar :)

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

A Dissenter's Point of View - From a Lawyer

Found this on the internet. Mr Ong Ying Ping of Ong Tay & Partners gave a presentation recently about enbloc sales, but this time from a dissenter's point of view and from a legal perspective. I believe Mr Ong runs a Singapore Law Blog which does tend to go offline often but you can try it here. The actual powerpoint slides (in pdf format) are available here.

Some very interesting points were raised by Mr Ong around the theme: "Would it be better to revert to the original position before the 1999 changes ie with 100% consensus?" He gave a number of cases that I'm unfortunately unable to access (will try dropping into the Law Library to see if they have it), but here are some of his points:-

1. Residual method of valuation is often used (Chew Ming Teck v Collector of Land Revenue and Anor [1991] SLR 8) and may be a point of contention.
   
2. Can a MC council member abdicate all responsibility of overseeing the conduct of the SC, especially given that it is their responsibility under the BMSMA to control, manage and administer the estate?
3. Mr Ong raised many points about CSAs which are addressed either on this blog or in the upcoming amendment bill. But one point he raised was this - when an EOGM is called to "consider the sale" (as required by law), does this mean that the activity is purely an informational one - SC announces a sale is achieved with a developer etc, or is a resolution required to be passed, in which case a vote may be called for? He referred to Sim Lian (Newton) Pte Ltd v Gan Beng Cheng Raynes and Anor [2007] SGHC 84 which unfortunately was in May 2007 and out of the 6 mth archiving by the Supreme Court online. So if anyone knows this case please let me know the details. Still, some CSAs have built into it that anyone who signs it MUST vote in favour of any motion or resolution passed by the SC (rigging the vote).
4. Finally, Mr Ong pointed to the possibility to apply for a "Declaratory Order" for out-of-control pro-sale groups. If anyone know what such an order is and how does one apply for it, I'm sure people here are very keen, especially considering the previous poison pen letter from Tampines Court.
   

So if anyone could dig out the judgments for the above cases, and what this declaratory order is (sounds like some sort of restraining order doesn't it), do let me know :)

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Tags: collective sale, collective sales, en bloc, en-bloc, en-bloc sale, enbloc, enbloc sale, property, singapore, real estate

Will New Law Make Poison Pen Letters a Thing of the Past?

I just saw this flyer sent out to owners at Tampines Court, written by someone who views him/herself as a majority owner. You can view the flyer at the Tampines Court blog (here). I'm disheartened by the distinct element of threat included in the flyer.

The very idea of dividing an estate up into two camps is built right into the enbloc protocol. So long as there's an arbitrary 80/20 (or 90/10) requirement for majority/minority consent in a 10 yr+ estate (another arbitrary number), the estate will invariably be split into two, often opposing, camps. The difference in the past and now is that the minority group is getting more vocal, present, more organised and importantly, more knowledgeable in the facts surrounding enbloc sales and their rights.

Will the new Law make such poison pen letters a thing of the past? Not likely at all. Until the government begins to address the social and psychological impact of urban renewal, rather than the procedural and legal aspects, the ugly side of enbloc sales will continue to exist.

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Tags: enbloc poison pen letter, tampines court, collective sale, collective sales, condo, en bloc, en-bloc, en-bloc sale, enbloc, enbloc sale, property, singapore

How to check if a potential rental is/isn't undergoing estate enbloc?

I realised that a number of tenants/potential tenants are not aware of how to find out if a choice unit they'd viewed is in an estate that is undergoing enbloc or not. Some agents will be honest and lay it out that it is, while others won't (their logic being, if tenants find out the estate is being enbloc'd, there's a chance the tenant won't take up the tenancy).

So here's some information, tips and DIY advice :)

Things to Realise:

1. The primary concern for a landlord in an estate undergoing enbloc is whether the tenant will move out by the Date of Vacant Possession (ie date when the developers can bring in their heavy equipment and begin demolishing buildings). If the tenant fails to do so, and it is found that it is the landlord's fault, the landlord pays massive penalties for every day of delay from vacant possession. Therefore, most Collective Sale Agreements (CSAs) - legal documentation owners have to sign to agree to the sale - will include clauses to the effect that landlords must ensure proper notice is served on the tenant, and that clauses are included in the tenancy agreement that allow the landlord to terminate the contract within X no. of months (typically 1-2 mths). Bear in mind as well that the sale committee will get very antsy should any tenant approach them with information that their landlord has failed to inform him/her and that he/she fully intend to stay in the premises until agreement expiry (which may well be after vacant possession).
2. Some CSAs are more explicit about other conditions eg landlord must inform tenant of enbloc sale process in estate, landlord must not keep damages deposit (since the place is going to be torn down, what's the point of doing so) etc. But this will vary. (1) above is the primary thing for you to remember and look out for.
3. Ongoing enbloc can mean anything from 6 mths to 2 years. The maximum period for an enbloc is 2 years (1 year to collect signatures, 1 year to tender, submit sale application to STB and get approval). That does not stop people from attempting enbloc year after year, especially if the estate is a prime location spot. So it really depends on what stage your estate is at.

How To Sniff Out an Enbloc Estate:

1. The first stage of an enbloc process is typically the signature collection stage. That's when owners are approached to sign the CSA and obtain the mythical 80% consensus (if the building is over 10 years old). If they have begun signature collection, notices (on notice baords) should be around the estate on the % consent level for the sale. That's a good indication of how long the estate has before you need to seriously consider finding alternative accommodation.
2. Check with the security guards - source of all gossip in the estate. They can tell you if an enbloc is happening, or at the very least, if it is happening, the name of the managing agent for the estate, or the marketing agent for the enbloc sale (if they know the latter!).
3. Check with the managing agent (MA). Get the contact from the security guard. Ask the MA if they know anything about an enbloc.
4. If you have the marketing agent's contact, call them and ask them what the stage of the enbloc is at. It's in their best interest to tell you since they want the sale to go through smoothly (and not have errant tenants still staying at the estate past vacant possession!)
5. Ask on the various expat forums. Some expats may well be staying in the estate you're eyeballing and may be able to offer information on the enbloc status (if any). Go here and here for starters.
6. Check the En-bloc List that I maintain. I try to get what information I can and update the list as often as possible.
7. Check your tenancy agreement. If there's a clause for short termination by landlord (eg 1 mth), this might be a sign as well.
   
8. DIY Investigation - Use the URA website for information on caveats lodged for the estate in question. The logic is this - typically there would be sales in the estate if there's no enbloc or smell of an enbloc yet. Once there's rumours of enbloc, some people might attempt to sell at premium rates ('enbloc potential') to capitalise on the impending enbloc. But once signature collection begins, owners will begin to bolt down for the enbloc sale. This means there'd be far less caveats lodged with URA for the immediately preceding months as people start to hold on to their units, since it makes more sense to hold and wait for the enbloc sale where they get higher returns, than if they sold it off now.

Eg, someone asked about these following 3 estates. You can find information about the estates at various property websites, including this one. You then find information about sales from URA's website here (it's free). You can gather such information like these:-

Regency Park - 1990 TOP - 292 units - 21 units sold in 2007.
Tanglin Park - 1989 TOP - 274 units - 11 units sold in 2007.
Sommerville Park - 1978-1990 TOP - 456 units - 25 units sold in 2007

Compared with
Botanic Gardens View (enbloc ongoing) - 1970 TOP - 146 units - 4 units sold in 2007. None in 2nd half 2006 at all.
Brookvale Park (enbloc ongoing) - 1983 TOP - 160 units - 4 units sold in 2007.

You can see the difference between the 2nd group which have owners bolting down for enbloc, versus the 1st group where there was active sales in the preceding months. You can also check the property websites to see how many units are for sale in the estate in question, to confirm the bolting down activity (or not). If there's still a lot of sales going on, chances are slim that an enbloc is happening.

Finally, you should check out other topics under "Rental" and "Tenancy Agreement" on the right, to keep yourself informed of the other issues surrounding enbloc estates for tenants. It's a real pity that some of the nicest old estates are being knocked down - these are the ones with large, spacious units with plenty of green surroundings, in really nice locations.

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Tags: tenants, renting enbloc, collective sales, condo, condo, en bloc, en-bloc, en-bloc sale, enbloc, enbloc sale, property, collective sale, singapore