Wednesday, 17 January 2007

Fight the Future - Communication Channels for the Minority

What can be done, for the minority owners? What happens if you're in the tail end of the inevitable steamroller called the en-bloc sale in your development, and you can't do anything about it.

Or can you?

There are communication channels, particularly to the newspapers and more importantly, to the government even the opposition, where you can voice your concerns about en-bloc sales. But why should the government care, you say.

Firstly, they should be concerned about the ethics of the whole process, especially since built into the conditions for rejecting an en-bloc sale, is the notion of 'good faith' and 'at arm's length'. The Select Committee's original recommendation to Parliament on 19th April 1999 on this matter points to the ethical imperative:

..the [Strata Title] Board will have power to refuse an order for sale only on the grounds that [1] the purchase price which a minority owner will receive is less than the price he paid for his unit, including all allowable deductions; [2] the purchase price a minority owner receives is not sufficient for him to discharge the encumbrances (ie mortgages and charges) on his unit; [3] the minority owner is forced to be part of a joint venture agreement with the developer; or [4] the sale is not in good faith and at arms length considering the factors that the Board will review a case (regardless of whether there is an objection) to see whether on the face of the application it is satisfied that the transaction is in good faith and at arms length, after taking into account the sale proceeds, method of distributing the sale proceeds and the relationship of the purchaser to any of the unit owners. It will also ensure that the sale and purchase agreement does not require a minority owner to be part of a joint venture agreement with the developer of the land

The last condition (4) refers to the ethics of the sale - the need for it to be done not only in good faith but at arm's length. You need to impress on the government that there are serious ethical issues with the way en-bloc sales are done now - Sales Committee's conflict of interest (Myth #2), ownership issue (Myth #3), arbitrariness of 10 year definition (Myth #5). There are also serious consequences of the aftermath of an unsuccessful en-bloc sale - place becoming rundown due to the SC/MC conflict of interest (Myth #2), enmity among neighbours if the SC lets known who are the minority.

Secondly, the government should be worried about the 20% or more minority group, MOST IF NOT ALL of which are (in all likelihood) Singaporean owners, people who do not wish to sell and do not wish to move from their home. An en-bloc sale can be traumatic to many of these minority owners, and it is likely to be manifested during election time (for those constituencies with elections!) in negative ways for the prevailing political party. Unhappiness with the government doing nothing about the en-bloc sale, not even reassessing it or putting restrictions on the sale to curb it, may well provide the impetus for citizens to vote less rationally.

It is ironic that the last person to ask about en-bloc sale was Mr Chiam See Tong in Nov 2006.

So what are the communication channels?

  1. Your Member of Parliament. Contact them via email or via Meet-The-People sessions. You can find your MP here. The list of constituencies is here. If enough people bring up this issue to them, even they'll get worried. Then again, you might be affecting their future potential en-bloc properties!
  2. Feedback Unit. They have a portal Reaching Everyone for Active Citizenry @Home (REACH.. doh) here.
  3. The opposition party who would love to bring up these issues in Parliament. Useful if you feel your MP has condos involved in en-blocs too (or is in a law firm that deals with en-blocs!). Chiam See Tong's party is here and there's Workers' Party too. No, seriously.
  4. Straits Times Forum here. The Today newspaper ran en-bloc forum letters for a while but the audience for Today is significantly different from the more mainstream ST.
Good luck and let's hope there will be change for a better future.

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