TOP POST: No Underselling, please

This post will appear at the top all the time, new posts can be found below this post 

Anything less than $1.7 per unit  is an undersell

MY REASONS FOR NOT SIGNING THE CSA

There is insufficient legal protection for owners (indeed there is none at all), the 33 covenants are too burdensome, the RP is too low and not guaranteed, the inclusion of a provision to lower the RP is worrisome as the mechanism and timing for lowering RP is vague and open-ended. Owners can sign for unspecified supplemental agreements. I worry that I might not get what is declared in the Method of Apportionment and that my actual nett sales proceeds will be lessened significantly.  More than 1 valuation at close of tender is tantamount to price fixing. There is no re-affirmation from owners. There is no 1-4-1 exchange as a safeguard against a low sale price.There is no fixed completion date once the S&P is signed. The proposed sale price is not equivalent to replacement cost.  In short, we are repeating many of the mistakes from round 1 with the added danger of a lower RP.

Sale Committee - 1 year on

There have been a few changes on the sale committee since their election in Jan 2011.

At that EGM, 12 owners were voted onto the committee and some general information was gleaned from questions asked from the floor (tabulated).

3 SC members resigned between Aug & Nov 2011

1 SC member sold one of his TC units (in red) in Aug 2011 for almost 50% more than his buy price in 2009*. Quite a handy profit for a 22 month flip.

*Source: Gov website 

Old post on flippers: When Flippers Flop

In the News

• En bloc market R.I.P in 2012? 
• En bloc fever appears to be receding: Khaw 
• Sim Lian Group launches Tampines Trilliant  Executive Condo 
• Private home market has peaked: Analysts

4-Weekly Statutory Notices & Accounts

As the first signature to the CSA was on the 12th Jan 2012 (assumed) the first 4-weekly Statutory Notice is thus due on the Notice Board on 8th February 2012

The 8-Weekly Notices in Round 1 were allegedly manipulated shamelessly. Could it happen again in Round 2?

Protestations about professional integrity aside, there ought to be a system in place for checking the checkers with full access to all documents given to any SP upon written request. Transparency was promised at the off-set, but will they deliver on that promise with regard to the Statutory Notices? Any shielding from SP scrutiny will only heighten suspicion.

Here is the Law on the Statutory Notices:-
First Schedule: 1.

The 3rd Schedule allows SPs unfettered access to the Accounts, which is a relief as the sale committee is now managing the Enbloc Sale Fund (ESF) with the potential to collect tens of thousands of dollars.  As the Vice-Chairman is a banker by profession, I place this account above suspicion. Nevertheless, as is my right, I shall be asking for access to it at various points along the way... :)

Here is the Law on the keeping of records :

3rd Schedule:-

Signing

ENBLOC SALE FUND

The Tampines Court collective sale has thrown up a new fund to be managed by the Sale Committee : the ENBOC SALE FUND (ESF)

This fund was approved by a SPs at EGM 4 on 7th January 2012 through the following resolutions (and subsequently clauses 4.4.11, 11.17 and 11.18 in the CSA ) :
.

Further to this, the signatories to the CSA agree to pay all sorts of costs, expenses, damages and claims - some of them possibly upfront (lawyers like to be paid a retainer fee) - through clause 11.29.  The word 'contemplated' is used in that particular clause which, to the mind of a layperson such as myself, puts a new spin on the sentence as a whole.  The sale need only be 'contemplated' and not carried through. Furthermore, the definition of the 'Sales Proceeds' was tweaked in the last amendment from present tense to past perfect conditional,  now it is 'would have been paid'  - again encompassing an unreal situation.
Covering their flanks, it would seem.

What about clause 4.4.7?  Will the signatories to the CSA be asked to pay for these 'solicitors or any consultants' upfront somewhere along the line, payable into the ESF,  too?

Is the initial $220 just the tip of the iceberg?

HUDCs in the News

Who pays what and when?

THIS TABLE IS UNOFFICIAL - it is just a compilation of my understanding of the fees payable on successful completion/unsuccessful attempt of this collective sale.

In the Schedule 3 Scope of Solicitors fees, note how item  2(a) is payable on successful completion of sale, whilst for items 2(c),(d),(e),(f) there is no time stated. I have married this with clause 11.18 in the CSA and conclude that these items have to be paid for by the 80% under 'further sums' as and when requested and therefore must be paid for in cash. These sums seemingly go into the ESF (en bloc sale fund) administered by the SC. If the sale is successful, then these costs will be accounted for under solicitors costs. I imagine 'further sums' in the ESF will include other Valuations among other things. A lot can be covered under the open-ended wording of the Resolution 2.3 passed at the EGM4 (" and other incidentals").

I WILL AMEND IF SOMEONE POINTS OUT ANY ERROR! PLEASE CHECK WITH THE SC IF YOU WANT CONFIRMATION.

It is right that those keen on the collective sale should pay upfront for the signing fee/disbursements/valuation/ method of apportionment report. Signing the CSA is not to be taken lightly and those who would sign on a whim or a 'let's see' basis will think twice.  It is not a frivolous undertaking, the end goal is not just about 'making money' as signing the CSA means you are agreeing to legally force (with Gov approval and backing) up to 112 families out of their homes.

Received by email:

EGM 4

UNOFFICIAL RESULTS
Meeting Scheduled start: 1pm
Quorum reached : 1.57pm
30% (168 units)
Total Quorum at 2pm: 33.4% (187 units)

EGM 4 scraped through by the skin of it's teeth. The 1 hour deadline for the 30% quorum was reached with just 3 minutes to spare.  In the end there was just 33% attendance.

168 units is a very poor showing.   What can be gleaned from this is the core group of owners keen on a sale number no more than 25 to 30% of the estate. Even after making changes to the draft CSA, texting, garnering proxies etc, they were unable to boost attendance  significantly from EGM 3.  Around 67% of owners remain in the silent majority.

The legal presentation was short and they added 2 amendments

1. Clause 4.4.10 : they claimed there was a typo error in this NEW clause (they had 3 months to check!) .. now it is a meeting of Owners and not Sellers. Hmm, methinks they track this blog to see how the wind is blowing with these last minute changes.
2. Clause 8.1.3 : they now say the phrase 'a sum at or below' is now 'redundant'. Redundant just means there is no need to expand on the meaning ...so is there a real change here? Methinks 'at or below' is now hidden.  Think of it as a cat withdrawing it's claws; you can't see them but we know they are there. 

Resolution 2.1: To consider and approve the terms and conditions of the draft Collective Sale Agreement

There were no questions from the floor, I  did not speak as there was just too much to question and I have said it all on this blog. The people who don't even bother to read the CSA are hardly going to comprehend objections. This crowd was going to pass the CSA, warts and all. And so they did.

Result: For 84% Against 12%  Void 4%
So, 145 units have decided to accept this CSA, but will the other 415 agree?

Resolution 2.2(a): To include a one-for-one exchange as a second option for payment in the Collective Sale Agreement and that owners select their preferred mode of payment at time of signing the CSA

The marketing agent for the collective sale gave a slide presentation on the matter, a presentation that was strongly against the proposal. His objections were:

• too many variables - please list them out
• not possible because planning parameters not 'approved'. Developers typically will have an architect assess the 'design volume' that can be gotten from land plot/shape/terrain. Developers even commission an architect to do up the design to take advantage of every square inch they could squeeze out of the plot. - based on planning guidelines and prevailing regulations. Because they are very experienced, they know the rules well and the final approval is not likely to have a huge variance. BCA approval can be obtained within 2 weeks, usually.
• owners' expectations = nightmare for buyers
• cpf factors, bank discharges, buyers' stamp duty for new apt, The CPF monies have to be paid back, so the owners who are keen would have to have enough money to pay it back or be able to get a bridging loan. The MAS rules are tight so the banks would only be able to lend a little without collateral. 
• developer might go bust (examples given:  Pender Court, Tulip Garden) The developer in both cases was Bravo Building Construction and it bit off more than it could chew. It didn't go bust, it cut it's losses.   It dropped 3 sales and forfeited the deposit. No buildings were torn down, no owner was left homeless or penniless.
• administrative issues with 560 owners
• hard to satisfy 560 individuals preferences
• higher risk of long drawn out court battles
• no development has ever done 1-4-1  There have been at least 2 to date in Singapore and plenty in Hong Kong which doesn't seem to have a problem working out the logistics. The HDB also has SERS which is a form of 1-4-1. for HDB-ers.  Recently, those living in Rocher have been promised replacement homes in Kallang . A good lawyer would be able to iron out  the details, don't expect the layman to know all the answers though it is easy to frighten people off with generalities.

An owner stood up and pointed out he sounded more like the marketing agent for a developer rather than for the owners.

When the proposer, Mr XX requested to do the same, that is, give a slide presentation that would show the advantages of the proposal, he was flatly refused. He was not prepared to give a presentation by any other means. The floor was thereby denied the opportunity to see graphs and slides that would have been helpful for a balanced deliberation on the matter.

I just tried to remind owners that 1-4-1 is a safeguard for all in case the RP is devalued over the next 2/3 years. Our near death experience should have been enough but I suspect many on the floor were new to en bloc, bo-chap or  just wanted to cash out. One old guy stood up repeatedly and said something like 'if the price is right, then just sell, no need to talk'.   Anyway, I knew it was a lost cause with that crowd. 

Result: For 16%   Against 80%   Void 4%

Resolution 2.2(b): To compel the SC to seek reaffirmation from the sellers before the sale tender is awarded or before a private treaty is signed.

Some heckling during this part. Whilst owners views were sought there was a definite air of impatience when those views were given. The debate was very minor. The marketing agent thought 10 weeks to decide was too short with no time for an EGM.. He also highlighted that requisitioning was troublesome (I can't remember his exact argument here, or maybe it was the V-Chairman who chipped in).  My response was that they had no trouble having EGMs up to now, and have factored in EGMS for minor things (such as removing minority member from SC) in the CSA. Also, their whinge that it was hard to requisition was meaningless, as the CSA does away with the need for laborious requisitioning altogether ; the SC can 'convene' EGMs. The tender date is known and they could plan ahead and book the hall weeks in advance. The MA also made an erroneous statement when he said the sale committee would have no power to enter into a sale contract... it isn't a sale contract,  it is a CONDITIONAL sale contract, it is not a done deal, and is conditional on STB approval and what is the big deal of making it conditional to Sellers approval, too.

I might as well have been talking to a wall. En bloc round 1 here we come again.

Result: For 19%  Against  75%  Void 6%

Resolutions 2.3: To seek approval of the SPs for collection of $220.00 to meet the costs of valuation, advertisement and other incidentals

Just information, no questions

Result  For  84%   Against  16%   Void 1 unit

Resolution 2.4: To consider and approve the Enbloc Sale Fund (ESF) shall be administered by the Sale Committee (SC). All monies in the ESF are to place in a bank account to be opened by the SC in the name of the ESF. In this regard, to permit the SC to open the bank account with a bank to be identified by the SC

Result  For 87%   Against  8%  Void 5%

Other points

One owner pointed out that the floor area of his unit set out in Schedule 2 was incorrect as it did not include the 2m recess area he had purchased.

The Vice Chairman informed the floor that Signature Collection would start on Thursday 12 Jan 2012 (tentative) at the management office. Owners were to bring their chequebooks.

I believe the last minute changes to the CSA meant those who brought their chequebooks today went home not a penny poorer.