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 other EOGMs and Owner Meetings

How many EOGMs and SP Meetings are there in the SECOND & THIRD SCHEDULES?



Second Schedule: 4 EOGMs  (including the first to construct the sale committee). But in actual fact, they can call for as many EOGMs as they like so long as they have the 20%  requisition.
There must be 14 days Notice before an EOGM can be held and MCST funds are used

Third Schedule:
There are 2 normal SP meetings mandated in the Schedule, of which 7 days Notice must be given. No MCST funds can be used for 3rd Schedule SP Meetings : BMSM  'Management & Sinking Funds':
:



After the CSA signing but before the launch of the sale 7- (3)(a),(b)
a) to update on total number of SPs who have signed the CSA 
b) to provide information on the sale proposal and sale proceeds 

After the close of the public tender or after the sale committee has entered into a private contract 7-(4)(a),(b)
a) to provide information on the number of offers received for the collective sale and the respective amounts. 
b) to provide information on the terms and conditions of the S&P agreement 

Here is my pictorial representation:
First, let me turn to the terms  'update' and 'provide information'.

These terms do not imply voting of any kind.; there is no decision-making by the owners. This position can only be changed if owners request for it in the CSA. Owners MUST be pro-active in this area or they will be locked out of the decision making.
.
Here is what  Parliament has to say on the matter:
.
The Minister for Law, Mr. K Shanmugam said in the Oral Answers to the Land Title (Strata) (Amendment) Bill Second Reading 2010

"Ms Lee also proposed that there should be a mandatory requirement for a Sale Committee to seek reaffirmation from the owners before the award of a Sale tender. A Sale Committee has to act in accordance with the mandate specified in its CSA. Thus, it really depends on what mandate is given to the Sale Committee. If the owners empower the Sale Committee to make the decision for award of tender within certain prescribed parameters, without the need for reaffirmation, then it is not the Government's business to intercede and tell owners how they should run the process.

Likewise, there is nothing in the legislation, either in the past or going forward, to prevent owners from specifying that they want the Sale Committee to seek such reaffirmation from the owners before the tender is awarded. This can be provided in the CSA if the majority wants."

If owners are not-proactive, there is still a binding fiduciary duty on the Sale Committee to seek reaffirmation from owners if in doubt. But this is an expensive fall-back that requires a strong minority willing to go to High Court over the matter.
.
(2) Duty to consult the subsidiary proprietors
166 Finally, whenever there is reasonable doubt as to the proper course to adopt, the SC ought to seek fresh instructions or guidance from the consenting subsidiary proprietors from whom it draws its mandate. It is true that the LTSA and most collective sale agreements do not contain any specific provision requiring an SC to obtain approval from the consenting subsidiary proprietors of the sale price before the SC issues an option to the potential purchaser (para 7(1)(g) of the Third Schedule to the LTSA provides that an SC shall convene a general meeting for the purposes of considering the terms and conditions of the sale and purchase agreement, but para 7(4) states that this need only be convened after the close of a public tender or auction or after the SC has entered into a private contract for sale). However, an SC’s duty to consult with the consenting subsidiary proprietors arises out of its fiduciary obligations, independently of its contractual obligations (see [109] above).
.
167 An SC cannot rely on a mechanistic or literal compliance with its statutory and contractual obligations to escape indictment for breach of its obligations as fiduciary of the subsidiary proprietors. The first principle is that an SC has to work for the benefit of all the subsidiary proprietors. This will no doubt involve going beyond just paying lip service to the relevant procedural rules under the LTSA and its mandate under the collective sale agreement. Indeed, in evaluating the conduct of an SC, the contextual conditions in which the power of sale is exercised is everything.
.
Horizon Towers Court of Appeal Decision, 2 April 2009, which clarified that the owners, as principles, can direct the SC to change course.
.
From (Summary of Case):
.
"(11) The original SC had breached it's duties as fiduciary agent for all the subsidiary proprietors by........failing to consult (or even update) the consenting subsidiary proprietors to seek further instructions despite the surge in the property market: at [177]-[195] and [210]."
(emphasis is my own
)

In the Second Schedule it states that:
(4) A motion for the constitution of a collective sale committee and its powers, duties or functions shall be decided by ordinary resolution passed at the general meeting.

Now if those powers were not established in the first EOGM - then wherever they pop up, in whichever EOGM they rear their head, they must be decided by ordinary resolution.

No comments:

Post a Comment