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.

Ministry of (bad) Law

Keep members of MC, sales committee distinct
AS en bloc sales fever is revived, it is important for the government to take note that, often, members of the management corporation or council (MC) are the same people as those sitting on the sales committee set up for selling the property . This presents potential conflict of interest and leads to malpractices.

When the MC, whose main roles are to oversee maintenance is tasked with the responsibility for collective sale, there would be obvious an conflict of interest simply because they are not in neutral positions; they have the power to make decisions on maintenance matters that influence en bloc sales.

A case in point is a condominium where the MC, in pushing for an en bloc sale, has openly said that non-maintenance is a tactic to make owners fed up of their run-down properties so that they would want to sell.

The MC also said that money should not be wasted on estate planning when an en bloc sale is in prospect. As a result, the estate's conditions, amenities and facilities have so deteriorated that they are posing safety and health hazards to residents.

As en bloc sale procedures can take years, maintenance of estates need to be continued at a reasonable level. Hence, it is important that management of maintenance issues be separated from en bloc issues and that members of the respective committees be also distinct.

 Florence Tan

Residents have power to deal with MC members
MS Florence Tan (‘Keep members of MC, sales committee distinct’, BT, April 15) suggests that members of management committees (MC) be distinct from members of en bloc sale committees (SC).
Ms Tan is of the view that there will be a conflict of interest when members of the MC, whose main role is to oversee maintenance of the estate, are also tasked with the responsibility for an en bloc sale.
Separating the members of an MC and SC may not be very practical for smaller estates if insufficient persons come forward to form two separate committees. The Land Titles (Strata) Act allows owners to elect who they feel are best suited to represent their interests into the SC. The Act also allows owners to remove any SC member or even the entire SC if they are of the opinion that they are not discharging their duties in a fitting manner.
Under the Building Maintenance and Strata Management Act, the MC is duty-bound to ensure the estate is well maintained and kept in a state of good and serviceable repair. Should the MC fail to perform its duties as imposed by law, residents can seek redress through the Strata Titles Board or the Court to compel the MC to perform its duties. If residents are unhappy with the performance of council members, they can consider removing the council members concerned by way of an ordinary resolution at a general meeting on grounds of neglect of duty.Thus, it is entirely within the powers of the majority of the residents to deal with errant MC members.Chong Wan Yieng (Ms)
Head, corporate communications Ministry of Law Source : Business Times – 20 Apr 2010

The only argument the Ministry of Law could dredge up was that it might be impractical for smaller estates should insufficient people came forward to form two separate committees. What a lame excuse. The SC need only have a minimum of 3 members and one can safely assume there are more than 3 people in the estate. MC members tend to be old guard and join/rejoin year after year. The SC is an ad hoc group, usually flippers or desperados, who would never have had any interest in the estate under normal circumstances.

The Ministry of Law is once again skirting the issue by not addressing the  'conflict of interest' head on. preferring instead to redirect the argument as to how owners can rectifying measures if things take a turn for the worse,. Measures that would be unnecessary had the MinLaw done a better job in the first place. They should view the two committees as opposing political parties. It is not possible to be a member of the Ruling Party and the Opposition at the same time. Can they not see the difficutly? Are they blind to the obvious conflict of interest? Why must owners hold a 'general election' to rectify the matter!

By not addressing the question of conflict of interest,  the onus is put on owners to do battle on the ground. They refuse to make good law and in so doing,  encourage disharmony and outright animosity amongst subsidiary proprietors. The MinLaw make a mess, and the owners must clean it up - as usual.

And it's all completely unnecessary and avoidable.
 
What possible reason could a sale committee member have for joining the MC? Isn't their SC job time-consuming enough? Why undertake the extra responsibility? What are their ulterior motives?
 
A huge estate like TC need not depend on the SC and their supporters to run the estate and can rely on many, many owners who would rather volunteer their time than see the estate go through a gradual decline on skeletal services.
 
Any aggressive tactics (as seen in the orchestrated pro-enbloc mayhem at the 2006 AGM) will face equally aggressive counter attacks from concerned owners.

Its a case of BEEN THERE, DONE THAT and NEVER AGAIN.

Fears not groundless

MINISTRY of Law’s rebuttal (“No conflict of interest”, April 23) attempts to dismiss lightly Ms Florence Tan’s comments in an earlier Voices letter of a perceived conflict of interest when Collective Sale Committee (CSC) members are also on a private estate’s management committee (MC). It is surprising, and not a little disappointing, for an official reply published for public information to be so riddled with controversial if not confusing statements. Not just once accidentally, but three times in the last three paragraphs of its letter, MinLaw expatiates on the supposed rights of residents, whereas in reality they have almost no say, unless they are also unit owners, or subsidiary proprietors as they are termed. Is MinLaw really unaware that there could be, and in fact there are, many residents who are no more than mere tenants with few rights except that of occupation of the unit for which they pay rent? By no stretch of imagination, or for that matter, law, (and here I stand open to correction by MinLaw) are they in the position to “elect, remove en bloc sale committee members” etc, which MinLaw so easily suggests.
 MinLaw opines that “separating the members of an MC and SC may not be very practical for smaller estates if insufficient persons come forward to form two separate committees”. It fails to define, even broadly, where the line of demarcation between “smaller” and “not smaller” starts, and/or ends.

EXTENT OF POSSIBLE CONFLICT
The (experienced) managing agent of the estate where I live in informed me that under the Land Titles (Strata) Act, just one person can in fact make up the MC, while the CSC needs to have a minimum of three. In this scenario, does MinLaw seriously contend that there is not even one committed individual in any private estate who is uninterested in what happens in a property into which one’s life savings would probably have been sunk?If so, it says a lot about the apathy commonly attributed to Singaporeans, who generally are kiasu otherwise.Instead of pooh-poohing Ms Tan’s fears and reservations as groundless, MinLaw should look more seriously into the extent of a conflict of interest which could, and in fact does, arise when a private estate’s MC is dominated by those who are also on its CSC, with diametrically opposing objectives – one entrusted with maintaining the estate in good order, and the other the avowed objective of selling it for eventual demolishment. Surely, when the stakes could run into hundreds of millions of dollars, it would be naive to believe that a conflict of interest does not exist, as MinLaw tries to convince in its rejection of Ms Tan’s reservations and fears.

PERSONAL EXPERIENCE
Perhaps it would not be out of place here to record my own personal experiences on this issue. My family and I moved into a private estate with over 250 units almost 13 years ago. At our first AGM, I was elected to the MC, and for the succeeding 10 years, served as either secretary or treasurer (in fact, one year as both simultaneously). Due to a lack of the necessary quorum, almost no AGM ever started promptly at the scheduled time, from which can be gauged the practical difficulty in getting people to serve as (honorary) members on an MC. Nevertheless, it was never really difficult to get a group of us to stand in the common interest. However, changes made in Land Titles (Strata) Act rules from October 2007 altered this scenario radically, when a group looking to engineer an en bloc sale of our estate moved in to oust (successfully) everyone in the previous MC (except one who was also in favour) and taking absolute control. Their elected and still-serving chairman is a property agent, and he also sits on the CSC, which was quickly formed. But at the end of the first year, less than 50 per cent of residents have signed the collective sale agreement, with the mandate lapsing. This did not deter the group from seeking and obtaining a fresh (on-going) mandate immediately. That was almost six months ago, and apparently the CSC has met only once in the interim, with anxious unit owners totally in the dark as to what progress has been made. Apparently, there is no provision in the present rules to compel the CSC to provide periodical “progress reports” to be made known to affected subsidiary proprietors. Why not indeed, when a half-billion dollars could be involved, and with that current buzzword of “transparency” being so freely bandied around everywhere?

RESERVATIONS ARE REAL
Against such a background, Ms Tan’s reservations on the propriety of such a perceptible conflict of interest seem real and more than valid.MinLaw’s summary dismissal of the issue in its letter, with all the flaws outlined above, is unlikely to satisfy subsidiary proprietors who are strongly opposed to the sale of their homes, with the resultant upheaval in their lifestyles, if not lives as well, and who prefer to stay rooted in Singapore.
To sum up, within just months of the October 2007 amendments, another publication ran an article wherein a MinLaw spokeswoman was quoted as candidly admitting: “Since the amended Land Titles (Strata) Act came into effect, we have received feedback mainly from affected (read ‘aggrieved’) owners to make the collective sale process even more rigorous by introducing more safeguards.” Thus, by MinLaw’s own admission, there are flaws in the current Land Titles (Strata) Act. That was well over two years ago, and perhaps MinLaw could at least now take steps to make suitable amendments to set matters right, instead of trying to argue that everything is well. It is unlikely that the defensive arguments advanced by MinLaw will find acceptance among most subsidiary proprietors. They are more likely to go along with the reservations voiced by Ms Tan, which it has tried to shoot down.  Source : Today – 24 Apr 2010

7 comments:

  1. Not anyone can be in the SC.
    SC members are voted in by the residents. Residents decides the composition of the SC.

    New rules ensures this.

    ReplyDelete
  2. That is not the issue here.

    The issue is whether a member of the SC should also be allowed to serve as a member of the MC.

    ReplyDelete
  3. Why can't the member of the MC be part of the SC? Conflict of interest?

    If the residents feel if there is a conflict, then do not vote the member into the SC.

    The point is that the residents have the choice. Let's not always be govern by rules.

    ReplyDelete
  4. Rules are the only way to keep the wolves at bay.

    Read my posts on conflict of interest.

    ReplyDelete
  5. vote gives residents options. in my opinion, choice is better... and yet reduce the risk u highlighted. let residents have their say.

    ReplyDelete
  6. It is unlikely the LTSA will be changed soon. Ever since the latest LTSA were introduced, only a handful of successful enblocs have taken place. Most examples given were from history. Since the new laws were in placed, any claims of conlict of interest?

    ReplyDelete
  7. A little birdie told me......

    ReplyDelete