Friday, 23 March 2007

Minority Voices Shouting in Frustration

For various reasons, a previous post has been removed on the request of the original poster. I'm including here in its stead, various letters to ST Forum:-

More transparency needed to protect owners' interest in en bloc sales
Straits Times Forum Online - 17 Apr 2007

TIGHTENING the tendering procedures and making the sale process more transparent would help to protect the interest of owners in en bloc sales, majority and minority alike.

The tender process being practised now is nothing more than a sale by negotiation in disguise. Developers hardly ever put in a firm price in their tender as they should; they merely express an interest in negotiating a sale.

A collective sale by negotiation with a developer always works to the disadvantage of the owners. In a properly conducted tender, it is the owners who set the terms. They can take time to work out the collective sale agreement and the detailed tender conditions. The highest bidder above the reserve price gets to buy the property.

In a private treaty negotiation, on the other hand, the bidder gets a chance to set the terms, often without reference to the conditions the owners had agreed for the tender.

Negotiating positions of the owners have to be worked out in open discussion, but the developer can play his cards close to his chest. One side's bottom line is exposed, while the other side's is carefully hidden.

Furthermore, when an offer comes in, owners have very limited time to work out their positions. Pressure can be brought to bear by the developer or the property agents to get terms to their liking. The stress creates dissension among owners, pitting majority against minority, which the developer can use to his advantage.

The reserve price in a tender is meant as the fall-back in case you cannot get more in an open competition. But when a tender is turned into a private sale, the reserve price is misused merely as a gauge to what price the developer, now free from open competition, feels inclined to offer.

This is particularly harmful to the owners in a rising market and when the offer comes in near the end of a long validity period of the CSA.

Public tenders are uniquely suited for en bloc sales. A sale by negotiation lends itself to abuse. It should be made illegal, for the sake of keeping the public peace and protecting the interest of owners.

Regulations should be introduced to require en bloc sales to be done solely by public tender, and, even more importantly, to require that tenders be conducted to the same standard of transparency as those conducted by our public authorities in the sale of land, such as the URA.

Ms Teresa Boon

So unfair that there's little those who oppose en bloc sales can do
Straits Times Forum Online - 14 April 2007 [Comments section contains the original which the letter writer sent to me]

FOR the very same reasons that collective sales are a nightmare for old folks, they are a nightmare for all. Unfortunately, we live in a mercenary society,

Developers looking to top up their land banks and businesses stick to this stand to make money. So do property owners.

But at what price in human terms? We bought our condominium because of its location, with the intention of a happy retirement. Now we worry constantly because we have been served notice that a Pro Tem Committee of five is working with two estate agencies and a leading law firm to present us with their proposals.

Why do we worry? Quite simply, why should we have to move at all? If this madness prevails, where can we find another home to replace this one? We should be given the freedom to choose where we wish to live.

Let interested parties buy up individual units and sell blocks of them to the developers; or let the developers search for and buy units themselves. Why legislate that we must sell our homes?

There is an answer - live in a landed home. But how many can afford - or want - one?

Anne Wong Holloway (Ms)

Collective sales a nightmare for old folks
Straits Times Forum Online - 7 April 2007

I REFER to the letter, 'En bloc sales: more questions that need answers' by Mdm Ong Beng Choo (ST Online Forum, April 3). One important issue that has not surfaced is how collective sales create a great deal of anxiety among old folks who may suddenly find themselves uprooted and relocated to an unfamiliar place despite their objections.

The process of searching for suitable replacement homes and subsequently moving house, especially to a new location, can be demanding and frustrating, especially for elderly folks who may have bought a home for retirement. There are instances where old folks bought a home only to face the prospects of having to move again due to collective sale.

To help folks who bought a home with the intention of retirement, I suggest the Ministry of Law, in reviewing rules on collective sales, in fairness to minority owners, examine how concerns of old folks can be managed to alleviate their anxiety.

The ministry could consider the feasibility of introducing a time bar, say 20 years, before which date collective sale is disallowed unless there is 100 per cent approval. Older folks would than have some peace of mind as to the maximum length of stay in their new home before they proceed to buy.

Lim Chong Leong

En bloc sales: More questions that need answers
Straits Times Forum Online - 3 April 2007

NOWADAYS, when I look left, right and centre, there is an estate up for en bloc sale. It is good for older estates to be renewed. But there are a lot of questions that need to be answered or cleared up.

What legal rights are the members of the collective sale committee empowered with? Does the collective body give up all its rights once it has nominated a sale committee?

Can the committee decide on the allocation of the sale proceeds?

Can it decide on the law firm and change lawyers when it wishes?

Should the lawyer who is paid his legal fees with regard to the collective sale be entitled to retain the interests which can be a large sum because the stakeholding sum is so huge and may be for a long period?

Should the members of the sale committee feel that they have been misled by the lawyer or the agent, do they have recourse after they have signed the appointment letters?

And a most pertinent question is: Can the members of the sale committee, the agent and the lawyer or either one party arrange a private agreement with one or a few others to ensure that the sale goes through?

There are more questions than just the ones above.

Is the Strata Titles Board empowered to ensure that the sale is fair to all? If not, then who or which body in Singapore will oversee the actions of all involved and ensure that there is transparency?

There is talk of subsidiary proprietors who have been offered more to ensure that the 80 per cent target is met.

There is also talk that subsidiary proprietors going to arbitration at the Strata Titles Board eventually signed and agreed to the collective sale that they were vehemently opposed to.

Mdm Ong Beng Choo

Forced into collective sale, now must pay $13,000 to agent
Straits Times Forum Online - 2 April 2007

MY NEIGHBOURS have succumbed to the en-bloc fever that seems to be sweeping Singapore at the moment. Having formed a sales committee and obtained the 80 per cent acceptance needed, they put our estate of 34 homes up for sale.

An offer has been received from a developer that exceeds the reserve price and it looks like a sale will go ahead. While my wife and I had no desire to move and hence did not sign the collective sale agreement (CSA), we can understand the logic of the Government facilitating property rules to allow en-bloc sales in land-scarce Singapore. We can also see why our neighbours are tempted by the generous premium that selling by this route will net.

However, as part of the sales process we must now pay the sales agent a commission of more than $13,000 for forcibly selling our home against our wishes. While I have no doubt the agent has been diligent in his duties and done his best to achieve the highest selling price possible, it was not something we asked him to do. In fact, it was contrary to our wishes.

It is adding insult to injury that, not only will we be homeless by the end of the year and need to find a new place to call home, but we must pay for the privilege of being booted from our own home!

While it will be too late to resolve our predicament, perhaps when the Strata Titles Board next reviews the rules of en-bloc sales, agents fees' payable by minority owners is an area that needs to be addressed.

Jonathan Veel

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