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.

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

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

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

Name calling.
Bullying.
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.

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

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.

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Tags: EOGM minutes, minutes, EOGM, Extraordinary General Meetings, collective sales, condo, en bloc, en-bloc, en-bloc sale, enbloc, enbloc sale, property, singapore