Disclaimer






"I am a BLOGGER NOT an expert. This is a BLOG not a 'go-to' website for official information. I represent no one's view save my own. I have neither legal nor financial training, nor do I have anything to do with the real estate industry. My understanding of the Collective Sale Process is from a layman's position only. My calculations, computations and tables are homespun and may contain errors. Please note that nothing in this blog constitutes any legal or financial advice to anyone reading it. You should refer to your lawyer, CSC or financial adviser for expert advice before making any decision. This disclaimer is applicable to every post and comment on the blog. Read at your own risk."
Drop Down MenusCSS Drop Down MenuPure CSS Dropdown Menu
There is one thing worse than an Enbloc ----- and that is an Enbloc done badly. Since the majority have the necessary mandate to sell, then they owe it to all SPs to make a success of it. Minority SPs can only watch and wait, if they sell then lets pray it's at a price we can move on with, if they don't sell, then we are happy to stay for a few more years.

The Management Council

The management council (MC) is elected by the SPs at each and every AGM to manage estate affairs over the following year. The role of the MC is governed by rules set out in the Building Maintenance and Strata Management Act (BMSMA) found here Cap N0 30C


Duties and powers of management corporation in respect of property
29. —(1) Except as otherwise provided in subsection (3), it shall be the duty of a management corporation —

(a) to control, manage and administer the common property for the benefit of all the subsidiary proprietors constituting the management corporation;

(b) to properly maintain and keep in a state of good and serviceable repair (including, where reasonably necessary, renew or replace the whole or part thereof) —

(c) to effect insurance according to this Act;

(d) when so directed by a special resolution, to install or provide additional facilities or make improvements to the common property for the benefit of the subsidiary proprietors constituting the management corporation;

(e) to comply with any notice or order made by any relevant authority or public authority requiring the abatement of any nuisance on the common property or ordering repairs or other work to be done in respect of the subdivided building or common property;

(f) to pay the rent, if any, on the land on which the subdivided building is erected;

(g) to cause proper records to be kept of notices given to the management corporation under this Act or any other written law, or of any orders made by a court, a Board or other tribunal and served on the management corporation; and

(h) to convene annual general meetings in accordance with the First Schedule.


ANY BREACH OF DUTY CAN BE REPORTED TO THE URBAN REDEVELOPMENT AUTHORITY (URA)

EN BLOC DOES NOT FALL UNDER THE POWERS AND DUTIES OF THE MC.

EN BLOC  IS NOT A MAINTENANCE OF COMMON PROPERTY MATTER.

The MC should not facilitate any en bloc attempt by:-
  • publishing and distributing en bloc material (against LTSA to use MC funds)
  • lending itself as a platform to voice en bloc matters
  • allowing members to use the MC as a springboard to reach owners
The MC does not manage en bloc matters but will hold EOGMs if requisitioned by 20% of subsidiary proprietors (by aggregate share value) or 25% (by total number of units). The MC should be a neutral party in en bloc as their mandate is to look after the estate for all SPs. It should neither facilitate nor block a legitimate en bloc attempt and must strictly follow the rules set out for in the Land Titles (Strata) Act for collective sales and BMSM 2004 for estate management.

Can an MC member also serve on the sale committee (SC)?
Yes. The LTSA rules do not bar MC members from sitting on the SC or vice-versa, even though they are committees with opposing mandates. There are different eligibility requirements for each committee; the MC has stricter requirements eg, barring those that are in arrears to the MCST. The SC requires  greater disclosure of personal information but stops short of barring individuals from serving.Wearing two hats is of course not advisable and not healthy for the estate.

So it rests on the residents themselves to cover all the bases and not elect anyone who might damage the estate in the meantime. There is no guarantee that an en bloc attempt will be successful, and only fools destroy what they own.

If ever there was proof that a strongly pro-en bloc management council is always bad news for the health of an estate, then you need look no further than Laguna Park. This privatised ex-HUDC estate, with a much coveted sea-view, has been highlighted in media reports. With the deadline for collecting their 80% drawing near; intimidation and petty crime ratcheted up a notch, and when the culprit was eventually caught on camera, it was almost laughable that it turned out to be the Chairman of the MCST.

All en bloc EOGMs must be convened by the MC and it is the Secretary of the MC who must be satisified that all the necessary conditions of holding an EOGM under the BMSM Act are met.

According to the SECOND SCHEDULE:

Chairperson to preside
8. The chairperson of the management corporation shall preside at any general meeting of the management corporation at which he is present and, in his absence from any such meeting, the persons present at the meeting and entitled to vote on motions submitted at that meeting may elect one of their number to preside at that meeting and the person so elected shall, while he is so presiding, be deemed to be the chairperson of the management corporation

How many EOGMs are to be held?  
The first EOGM to elect the sale committee and decide on its powers, duties or functions and then the rest

According to the THIRD SCHEDULE
—(1) The collective sale committee shall convene one or more general meetings of the management corporation in accordance with the Second Schedule for the following purposes:
a) to appoint any advocate and solicitor, any property consultant or marketing agent in connection with a collective sale where the collective sale committee is not already authorised at a general meeting to make such appointments
(b) to approve the apportionment of sale proceeds; and
(c) to approve the terms and conditions of the collective sale agreement.

Who pays for these EOGMs?
EOGMs are convened using monies from the Management Fund.

What else does the MC do in a collective sale?
They can keep a record of all the Minutes and other Notices posted on the MC Notice Board.

THIRD SCHEDULE:
Keeping of records

9. —(1) The collective sale committee shall keep minutes of its proceedings and shall cause minutes of general meetings convened in accordance with the Second Schedule to be kept.

(2) If the management corporation is required by its by-laws to maintain a notice board, the collective sale committee shall cause a copy of the minutes of a meeting of the collective sale committee to be displayed on the notice board within 7 days after the meeting.

(3) A copy of any minutes referred to in sub-paragraph (2) shall be kept displayed on the notice board for a period of not less than 14 days.
The MC can go a long way in demanding transparency in the process by always occupying the middle ground; granting favours to neither side.
Time and time again, estates are left to slowly deteriorate, ticking over on minimum maintenance whilst the estate runs it's mad 2-3 year race for riches. With an almost 100% success rate at the STB and High Court, pro- en bloc councils are confident that their negligence in maintaining the estate will not be challenged, no one will care except the few poor minority souls who have to live there until the last day. They will be lauded by many for not squandering money unnecessarily. Many owners will stop paying their monthly maintenance fees, and the council blithely wiles away the days until the STB approves the sale.

But the estate may not get approval at the STB and beyond.

Estates must wake up to this danger early and ensure that the council is peopled by responsible residents who understand the importance of keeping estate matters and en bloc matters separate. There is no guarantee in life that a sale will be automatically approved and a MC that takes the view that it is merely a caretaker of a dying estate can do great damage.

Pro-en bloc committees have been known to:
  1. Intentionally run the estate down
  2. Decrease maintenance fees and sinking fund contributions
  3. Increase maintenance fees/sinking fund contributions to pressure owners to sign
  4. Forgo holding monthly meetings
  5. Engage sub-standard contractors to do minimum maintenance
  6. Exaggerate defects in the estate
  7. Overestimate cost of repairs
  8. Publish and distribute pro-en bloc material
There is a misconception that a minority MC would 'spend money like water' or 'deplete the sinking fund'. This is impossible as any dipping into the sinking fund, other than for emergency repair, or expenditure up to a certain limit. Anything greater  would require resolutions passed by subsidiary proprietors (SPs) at an AGM/EOGM. The MC cannot spend money that has not been earmarked by SPs for an express purpose under BMSM rules.
Walk the en bloc path if you must, but take care of your homes and look after the estate in the meantime. The people best suited to this task are those who are cautious in their outlook and who aren't out to purposely run the estate down. Your best bet would be to choose reasonable minority and majority owners or fence sitters to sit on the MC. Let the sale committee do it's job and the MC theirs.

No comments:

Post a Comment