I have decided to highlight another pitfall as some owners may be under the impression that the 80% requirement must be reached before there is a sale.
I have amended the time line to show the 2 points where the 80% comes into play in the process:-
First 80% (provisional)....'by hook or by crook'
a) those who sign by hook
From the date of the first signature to the CSA, the sale committee has one year to obtain the first 80%. Usually the signature collection is strongest at the beginning when the gung-ho owners line up to sign. I wonder why these foolish owners rush in so early to strap themselves into a binding legal contract, but they do. After a certain period the signature collection usually tapers off and comes to a complete standstill somewhere before the 80% threshold. Time ticks by and the SC begins to panic as the one year deadline approaches.
b) those who sign by crook
The signature collection has stalled! What to do? The SC will sit down in earnest and try and figure out a way to 'get more signatures'. They will not allow the process to unfold naturally, they must devise ways to reach their ends. - and to them, the ends justify the means. They may consider inducements such as waiving the up front legal fees. The marketing agents will tell the SC of their tried and tested ways and will go around the estate looking for owners who are willing to sign for a different minimum selling price (MSP). These owners are called conditional signers. (for more info see post here). Their higher minimum selling price is not guaranteed and marketing agents will happily accept any MSP as long as it gets them a conditional signature. The majority of owners are not informed about these conditional signers so when the 80% has been reached and announced to the world - everyone thinks that they have all agreed to the same RP!
If the eventual sale price does not meet the conditionals' MSP and/or other 'parties' do not top up the higher MSPs, then the conditional owners will no longer be considered signees to the collective sale.
So, AFTER the tender/private treaty has been signed the consent level may DROP below the 80% mark again. The SC cannot apply for sale to the STB until they find replacement signees.
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Second 80% for purposes of application for sale
This is done in at least 2 ways (there may be more).
- By now, the marketing agents would have targeted a few owners who are not very bright and/or are ignorant of the rules and literally tell them LIES such as EVERYONE MUST SIGN now that the estate has been sold. That EVERYONE is signing up and they must too. (No one is compelled to sign - even after the sale has been agreed, even after the STB/High court approves the sale.. you do NOT have to sign. The requirement is 80% only.). They will catch a few more by this tactic. .
- The marketing agents would also have targeted those owners who were willing to sign for higher sums (who may or may not be the same conditional signers as before). This time. the extra sums of money would be GUARANTEED. Where does the money come from? Well, I will leave it up to your imagination.
- Conditional signers can come on board anytime, even after the conditional sale, to make up the 80%. (see Koon Seng House).
How is this all possible?
BECAUSE THE REQUIREMENT IS FOR THE ESTATE TO HAVE
80% AT POINT OF APPLICATION FOR SALE TO THE STB
AND NOT AT POINT OF SALE.
See Rainbow Gardens High Court Decision on conditional signers
See Regent Gardens High Court Decision regarding additional payments to minority owners
See Regent Gardens High Court Decision regarding additional payments to minority owners
9 comments:
Comment Page :The details of the CSA, terms, reserve price, apportionment method would have been discussed in a mandated meeting for all owners. Owners are free to attend and objectors can share their views for everyone to decide for themselves whether to sign on the dotted line or not.
Why do people sign? simply because they agree to the terms, price, etc. It is up to the CSC and MA to make their case.
As to hanky panky activities, it is therefore critical that owners select those they know and trust into the committee. If anyone have evidence of such activities, they can report to the STB.
Hi, Just curious. Can the MA call for tender before 80% sign the CSA? I though the days of EOI was long gone.
The SC selection is ultimately pointless. No one will know who these people are when they suddenly pop up at an EOGM. The pro-term sale committee, even now, will not show their hand and will not give out their names. How can anyone truly know the character of a total stranger they are seeing for the very first time? On top of that, even if you do manage to select a 'good one', chances are that sole voice will be drowned out and bullied by the 'bad ones' and will ultimately resign. Thereby leaving a vacancy open for any Tom, Dick or Harry to fill WITHOUT owner selection.
That is my prediction for TC.
Report to the STB???? Whatever for!! The STB are not the en bloc police and will just put your complaint in the trash. The STB NO LONGER has a judicial role to play and do NOT monitor or care about the goings-on in en bloc estates.
There is nothing in the First Schedule about how or when the tender should be called.
In the Third Schedule the SC has to call an owner meeting (not an EOGM) before the launch of sale and provide information on the sale proposal and process as well as give an update on the total number of SPs who have signed the CSA. SPs are those referred to in 84A .. which is the 80%.
So, no, they cannot sell openly before the 80% - but shenanigans do go on behind the scenes.
I need to brush up on my Sshedules soon... as I have not read them for a long time. I suggest everyone do the same.
Not sure where u got your info but the 80% before the tender has to be published publicly by the lawyers. There can be no hanky panky on this. No lawyer will risk this.
I wish people would go back and read my blog, or better yet, go and read the Supreme Court judgments for yourselves!
You do not understand the article, or maybe I have not written it clearly.
Conditional signers (those who sign for a higher RP) can be counted in the first 80% .. and yes, they are LEGAL according to a High Court decision. It is kept quiet because it is not ETHICAL to reach the 80% by this route and the SC know it.
Reaching the first 80% is vital if they want to go for tender and sale. If the eventual sale price is enough to satisfy the conditional signers sum then the High Court has already ruled that that is OK - the others are getting more than they signed for anyway. A minority objector cannot object because the same judge ruled that it is for the majority to object (which is illogical, because the majority has NO avenue for objections!).
If the sale price does not reach the Conditional signers sum then they are dropped and the SC has to go around and fill up the spaces with NEW signatories after the sale. Again, this is legal as the 80% at application to the STB NEED NOT BE THE SAME 80% that reached the threshold!
Now, whilst the first batch of conditional signers were simply USED by the SC, the second batch will actually have to be paid, probably under the table sums of money. This is dangerous, as this , if proven, is bad faith. The lawyer will not be party to this if he values his license - all he will see is that the owner signed the CSA for the agreed sale price.
Finland gardens was one estate whereby 3 owners were paid extra sums under the table - were exposed by the minority - and so the sale was thrown out.
This is a giant loophole which MinLaw refuses to fill.
You are still in the old regime. take a look at the new rules and move on.
If you say so, then would you like to point out the Schedule and paragraph which specifically bans conditional signers and such practices?
I can point out the very first line of the LTSA PART VA: '84A.-(1) An APPLICATION for an order for the sale of all lots....... may be made by - (b) the SPs of the lots with not less that 80% ....
It is reinforced in the First Schedule: 1. Before making an APPPLICATION to a Board....(a) execute..a CSA ..agreeing to agree to collectively sell..
The High Court has already ruled on the 80% on application.
The new rules were mainly about SALE COMMITTEE SELECTION (which are all hogwash). The process was left virtually untouched - property agents can continue to do their thing with impunity.
there is no need for specific legislature such as conditional signers.
This is a collective sale and everyone sells collectively and under the same conditions.
Owners have every right to question the MA.CSC and lawyer on the signing status.
To the anonymous who said, "You are still in the old regime.."
You sounded like you have read the new rules, so which new rules have you read that would cover the loopholes?
Tell us about it, don't just write statements like that... anyone can write statements like that.
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