SECOND READING (FINAL):- Amendments passed

Video link of Mr. Shanmugam's speech

Video link of MP Ms. Ellen Lee 

I wish this MP were in Tampines GRC! She raised a lot of points! I like her suggestion that the property agent give owners the same BUSINESS PROPOSAL that they give to the developer-buyer.

Ms Pauline Tay Straughton

This nominated MP talked about the Elderly and the findings of a NUS Research Study showing how collective sales had a negative effect on this vulnerable group resulting in anxiety and health consequences. Her recommendations also include that an en bloc information booklet be published for owners, that the age and state of repair of an estate should be taken into consideration, as is the case in Hong Kong.

 Video link of NMP Mildred Tan

This nominated MP would like to see a minimum qualification for sale committee members. 

Hri Kumar

The only MP who took a pro-enbloc stand

Video link to Mr. Shanmugam's answers

 NOW WE HAVE IT ON RECORD!

Method of distribution report: "prior to signing the CSA, owners can always require the sale committee to provide a report. Owners have the ultimate say, they can ask for what they think is necessary for the process, or for them to participate in the process."

Valuation report: there is no one size fits all solution for the provision of valuation reports to guide owners when they are signing the CSA. Ultimately it depends on their risk appetite and comfort level of different owners. Valuation reports have a shelf life..... hence,  it's best to leave it to the owners to jointly decide on the number and frequency of valuations to be carried out. We do not mandate that it should only be given at one point in time, we mandate that it should be given at such a point in time, and at all other points in time it is up to the owners to decide whether they want further valuations at whatever cost is appropriate. 

Business proposals: It is best to leave these matters to the owners to request such information if they consider it appropriate. .. At the end of the day, owners are making choices  in respect to their properties which involve millions of dollars, you expect them to know what they want, and what sort of safeguards they wish.  

Reaffirmation from owners before the award of a sale tender: A sales committee has to act in accordance with the mandate specified in its CSA. 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 a certain prescribed parameters, without the need for reaffirmation, then it is not the governments position to intercede, and tell the 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 the want the sales committee to seek such reaffirmation from the owners, before the sale tender is awarded. This can be provided in the CSA if the majority wants.

Alas, our own MP did not step up to the plate as hoped, even after she was given valid points to raise. Kudos to the above MPs and non-constituency MPs.

New en bloc rules passed

By Jessica Cheam (ST Online)

At the second reading of the amendment Bill, Mr Shanmugam said it 'represents another step toward refining the en bloc sale regime in Singapore'.

He also told the House that between 2005 and 2009, there were 462 en bloc sales, of which half or 217 had been redeveloped or were being redeveloped.

These 217 projects comprised about 12,000 units but after redevelopment, this number has shot up to more than 26,000 units, he said.

He added that the ministry will continue to review the Act and 'will make further refinements if necessary'.
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Suggestions ranged from including the age and state of a building to determine the consent level needed for a sale, to reducing the threshold of owners required to re-start an en bloc sales process. -- ST PHOTO: ALPHONSUS CHERN

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NEW rules tightening the collective home sale process were passed on Tuesday, but not before Members of Parliament called for further refinements to the bill.

Suggestions ranged from including the age and state of a building to determine the consent level needed for a sale, to reducing the threshold of owners required to re-start an en bloc sales process.

Addressing the concerns in Parliament, Law Minister K. Shanmugam said that the Government's task was to 'protect the interests of all strata unit owners, whether they are pro-sale or anti-sale' and that it should not 'micro-manage the process and prescribe too many requirements'.

Amendments to the Land Titles (Strata) Bill to streamline the en bloc sales process were first unveiled in Parliament last month.

They include a two-year restricted period for owners who attempt an en bloc sale after it failed once; a 60-day period for the Strata Titles Board (STB) to mediate in a sale, failing which it can issue an order to give the parties the option to pursue it in the High Court; and requiring stricter declarations of interests from sales committee members.

The changes will now become law sometime in June after it has been cleared by the President's office.

THE MINTON//Minton rise

 SOLD: $236 psf ppr

NEW DEVELOPMENT: $839 psf average

(as of Dec 2010)

See Developers Windfall


MINTON RISE AND FALL and RISE AGAIN
The 'wise' Sale committee and majority sold ex-HUDC Minton for a song in 2007; the lowest en bloc price ever.....
See sad blog here
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Kheng Leong bags Minton Rise

KHENG Leong, a privately owned property group controlled by the family of banker Wee Cho Yaw, has bought a privatised HUDC estate in Hougang for $209 million. The company inked a deal over the weekend to buy Minton Rise in a collective sale, according to sources.

BT understands that Kheng Leong may team up with listed construction and property group Low Keng Huat in some way. But sources could not say for sure whether this would involve Low Keng Huat merely handling the construction of the project or taking an equity stake in the redevelopment as well.

Minton Rise has 342 apartments in total. Owners will receive about $611,000 on average. The deal will be subject to approval from the Strata Titles Board.

The $209 million that Kheng Leong has agreed to pay is the reserve price. NRA Real Estate brokered the sale. The unit land price works out to about $236 psf of potential gross floor area, inclusive of an estimated $84 million development charge and a $19.5 million sum (estimated last year but not confirmed by the authorities) for upgrading the site’s lease from a then remaining term of 79 years to a fresh 99-year term.

The 472,378.5 sq ft site is zoned for residential use with a 2.8 plot ratio (ratio of potential gross floor area land area), which could mean a new condo with about 1,100 units averaging 1,200 sq ft.

Separately, on West Coast Road, the owners of the freehold Regent Garden are putting their homes up for collective sale. The indicative price is about $34 million or $375 psf of potential gross floor area, including development charges estimated at about $5.8 million. Colliers International is marketing the property through an expression of interest that closes on Feb 13.

Source : Business Times – 16 Jan 2007


And out of the ashes of that diabolical en bloc rises -

The Minton @ Hougang

Location : Hougang Street 11, Lorong Ah Soo (District 19)
Tenure : 99 years leasehold
Expected Completion : 2014
Site Area : 472,378 sqft
Total Units : 1144
Unit Types :
1 bedroom ~ 550 sqft (121 units)
2 bedroom ~ 980 sqft (337 units)
2 bedroom + study~ 1100 sqft (158 units)
Dual Key (2 bed+1 bed)~  1400sqft (44 units)
3 bedroom ~ 1200sqft (204 units)
3 bedroom (premium) ~ 1300 sqft (119 units)
3 bedroom + study ~ 1500 sqft (56 units)
4 bedroom ~ 1700sqft (84 units)
Penthouse ~ 2000-3500 sqft (24 units)

I'm looking for prices psf  and total strata area for sale to do a comparison; (the indicative pricing for this condo is 880 to 1000psf. The range for 1, 2 Br units would be closer to 950 - 1100psf).......... but a quick estimation says they paid $209m for the site and are now making something like $1 billion.

The original owners are probably back in HDB.
Talk about not knowing the true value of your estate! 
Talk about unleashing the value for the developer!

Buyers snap up condo units despite stock market jitters

In absolute terms, the prices ranged from $480,000 to $690,000 for the one-bedroom units, $750,000 to $990,000 for the two-bedroom units, $950,000 to $1.32 million for the three-bedroom units, and $1.3 million to $1.65 million for the four-bedroom units.

180 units sold at The Minton

Property developer Kheng Leong has sold 180 units in The Minton condo project in Hougang over the weekend.
The units sold were part of the 300 units released in the 1,145-unit project at Lorong Ah Soo/Hougang Street 11. It has an average selling price of about $850 psf.
Property agents marketing The Minton project said that the sales result was below the expected output, which was patterned in the property market peak in March and April. The peak was prior to the growing eurozone debt crisis and the Singapore government’s announcement early this month that it will release a bumper land sale programme for the second half of 2010 to meet the demand in the residential property market.
A new project release such as The Minton would have already sold about 300 units in its first weekend, and with prices at about five percent to eight percent higher, said Joseph Tan, executive director of CB Richard Ellis.
Peter Ow, managing director (residential services) for Knight Frank, also noted that the 99-year leasehold project could have sold 300 units in its initial weekend if it had been released in the market two months ago.
“The government land sales announcement has definitely had an impact. When we talk to (potential) buyers, they’re now taking a bit longer to decide. They’re worried that with the new supply coming up, prices might fall.”
The most popular units at The Minton’s holiday-extended weekend preview were the one- and two-room units.
Luk Kwok Wing, general manager (property) of Kheng Leong, reckoned that prices of one-room units sold are ranging from $480,000 per unit to about $590,000 per unit. The two-room units, on the other hand, were priced at around $750,000 to $870,000 per unit. The project also comprises three- to four-room units, penthouses and dual-key units.
Buyers who snapped up the project were mostly young Singaporeans, including families. Overall, buyers had HDB addresses, in areas like Serangoon, Tampines and Hougang.
Mr. Luk added that buyers were generally attracted to the project’s lush landscaping and generous facilities situated in a large site area of nearly half a million sq ft.
The Minton condo will have a 20-metre heated pool, a 50-metre lap pool, a tennis court, an air-conditioned badminton hall, which doubles as a function room and a treehouse playground. It will also feature a sky-terrace, a big library and spas/gyms. Its grand clubhouse will accommodate activities such as billiards, table soccer, karaoke and yoga.
The Minton condo project is being developed by Kheng Leong, a privately owned property developer controlled by the Wee Cho Yaw family. It is situated on the former Minton Rise site, which the company purchased through a collective sale in 2007.
Source : PropertyGuru – 31 May 2010

THOMSON VIEW CONDOMINIUM

A matter of time

Tempers flared at Thomson View condominium yesterday when a scheduled extraordinary general meeting (EOGM) for the establishment of a new en bloc sales committee had to be called off due to a lack of quorum.

Thomson View’s appointed managing agent CKH Strata Management called off the meeting after it declared that the minimum 30 per cent of share value, made up of residents or their proxies, required to attend the EOGM was not fulfilled by 1pm – the scheduled time to start the meeting.

However, residents of the 15-year-old, 55,000 square feet condominium had a different view and accused CKH of being tardy in its administrative process hence causing the delay.

Some residents claimed there were far too few staff tending to the registration process at the registration counter and that contributed to the delay. They also said CKH should have given them some leeway as the delay was over administrative matters at the registration counter and residents also claimed that the law requiring the minimum threshold to be met by a specific time was not clearly stated as a caveat to residents in the EOGM notice.

The Land Titles (Strata) Act requires a quorum of a minimum of 30 per cent of the share value to be reached in order to begin the meeting.

CKH said it had called off the meeting because they wanted to abide by the current law of dissolving the EOGM if the quorum is not met by its scheduled time.

They maintained that allowing for the EOGM to continue may thwart the process of an en bloc sale if a minority group chooses to contest its validity at a later date.

“I’m only a managing agent and I have to act according to the law. If I was lenient, then people who were against the en bloc sale could declare this whole election of the new sales committee null and void as the law was not strictly adhered to,” said Mr Chan Kok Hong, managing director of CKH.

However, a proposed change to the Land Titles (Strata) Act announced last month has provided for an hour’s leeway for the quorum to be reached, but this new ruling is expected to take effect only in June.

The dispute was resolved when Mr Tan Kin Lian, former chairman of the previous sales committee and ex-chief executive of NTUC Income, offered to facilitate the reconvening of the next EOGM through email with the residents.

A resident, who only wants to be known as Mr Ng, said the inflexibility from CKH was uncalled for.

“People put in so much trouble to come in and the EOGM was cancelled just because some people cannot be reached or are late.

“The managing agent should be more flexible and give us half-an-hour more instead of saying there is no quorum,” he said.

Source : Today – 17 May 2010

The Managing Agent has no choice but to follow the rules as they stand - that is their professional duty. Any failure to do so could warrant a complaint to the relevant authority after which they may lose  their professional license. It is wrong for one group of owners to clamour for special consideration and preferential rule-bending - there are two sides to en bloc, and the MA has to remain impartial and not bow to pressure.

Reconvening the next EOGM through email? What is that all about?

Project Details:
Bright Hill Drive
Tenure: 99 years
District: 20
No. of Units: 206
Year of Completion: 1987
Full condo facilities

LTSA AMENDMENT FLAW?

I have been alerted me to a possible flaw in the LTSA.  Intentional? Maybe.

Let's look at the EXPLANATORY STATEMENT in the LTSA Amendment Bill 2010.

The last amendment is to paragraph 12 of the Third Schedule to clarify that, in the case where a collective sale committee has not received any signatories to its collective sale agreement within a period of 12 months after it is constituted, the collective sale committee will be automatically dissolved. For collective sale committees in existence when the amendment takes effect, the period is 12 months after the date the amendment comes into force. This amendment does not prevent the subsidiary proprietors from earlier dissolving the sale committee at a general meeting.

Okay... so everyone now believes that no signatures to a CSA equals automatic dissolution after 12 months. (I pointed out earlier that this scenario will never happen as even if no one else in the estate signs, the sale committee definitely will).

BUT the problem that I was alerted to is in the actual drafting .....the summary is not an accurate reflection of what is actually written.

Page 25

(g) "(2) A collective sale committee that is constituted for the purposes of a collective sale of all lots and the common property in a strata title plan to which section 84A or 84F applies, or a collective sale of all the flats and land in a development to which section 84D or 84E applies, shall be dissolved if -

(a) in the case of such a committee that is constituted before the date of commencement of section 10(g) of the Land Titles (Strata)(Amendment) Act 2010, at the end of a period of 12 months after that date; or

(b) in any other case, at the end of a period of 12 months after the committee is constituted,

there is no collective sale agreement for that collective sale or no subsidiary proprietor or proprietor, as the case may be, has executed a collective sale agreement for that collective sale".

That OR makes all the difference.

 It looks like the SC are secure if there IS a CSA and even if no one signs their continuance is guaranteed. They have successfully dodged  automatic dissolution.

It could be just a draft CSA as where in the LTSA is the wording that says it must be ratified by the owners?!

I am confident the Ministry of  Law is sincere in its summary and the drafting error is just that.

Otherwise I would have to conclude that it is pulling the wool over everyone's eyes by intentionally leaving loopholes or implanting new ones!

DRAGON MANSION

Strata Titles Board approves collective sale of Dragon Mansion

The Strata Titles Board (STB) has approved the collective sale of Dragon Mansion to RL Developments, a wholly-owned unit of Roxy-Pacific Holdings.
This makes Dragon Mansion the first collective sale site to have successfully obtained STB’s Sale Order under the stricter legislation governing collective sale that came into force in October 2007.
At a sale price of S$100.8 million, Dragon Mansion is also the only collective sale site which has achieved a sale price of above S$100 million since the onslaught of the global economic crisis.
Dragon Mansion, in the Spottiswoode Park area, comprises 72 units of 3-bedroom apartments.
Owners of each 1,399 square foot unit will receive S$1.4 million in sale proceeds.
The freehold site has a land area of nearly 42,000 square feet and is designated for residential use with a plot ratio of 2.8.
The new development could potentially yield a maximum gross floor area of approximately 117,000 square feet, which translates to an estimated 120 units of 1,000 square foot apartments.

Source : Channel NewsAsia – 10 May 2010

LAGOON VIEW

 Lagoon View en bloc, too?
Source : Today – 10 May 2010

 2009 NewPaper article here

Why rolling back the EOGMs is not a good idea

The EOGMs gave a proper FRAMEWORK by which owners were guaranteed contact with the often mercurial and sometimes invisible sale committee. All owners would have been informed in a timely manner, a proper venue with seating for all, and of course, an all important official recording of the events for future reference at STB/High Court if need be.

Owner meetings are casual, ad hoc, unrecorded  and do not carry the same weight with owners. The new rules regarding quorum, 60 mins wait, automatic dissolution  etc do not apply to owner meetings - if 10 people turn up then it is still okay. The 7 day notice is a farce - 3  days in SingPost and no time to change plans. Tampines Court does not have a meeting room, we shall probably have to meet in the void deck. Would this be a proper way to treat 560 owners in the disposing of their most valauble asset?

Owners are not an organised group - and individual pleadings/requests can be ignored as they can never outnumber the 'majority' whom the SC claim to represent. So, the answer to that is for owners to form into groups in advance - the bigger the better - elect a spokesperson and have written proof of all dealings with the sale committee. The sale committee cannot claim 'no one objected or 'only a few people objected'. Power is found in numbers.

The EOGMs remaining are all clustered at the beginning - and nothing at the all important point where the estate is being sold.  The MinLaw has been generous with the sale committee by giving them a grace period of 12 months to twiddle their thumbs, at the very start of the process and the owners are completely sidelined and given zero time to confirm the sale /redirect the sale committee at the crucial point at the end.

The fiduciary duty of the sale committee, as spelt out in the landmark Horizon Towers Appelate Court Decision  still shines like a beacon in the night.  It would be a sobering read for those contemplating on going back to the way it was  ie the yahoo tactics that worked so well before. The HT decision remains as the seminal decision on how a sale committee conducts itself and it should be compulsory reading for all would-be members.

 But of course, the fiduciary duty only applies if there are objectors willing to challenge the sale at the High Court. Willing to take up the cudgel and attempt to prove bad faith. It is very difficult to do, as property agents, en bloc lawyers and the SC are very good at covering their tracks and the grounds for objections are very, very narrow.

(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).

In summary it defines the SC's duties ;-

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.

Summary
168    We shall now summarise our view of an SC’s duties in respect of the sale price.

The SC is expected to act in the same manner as a prudent owner would in order to secure the best price for the property obtainable in the prevailing circumstances. In our view this includes doing the following:
(a)    acting with due diligence in appointing competent professional advisers;
(b)    marketing the property for a reasonable period of time to the largest number of potential purchasers in order to create the widest catchment of offers;
(c)    following up on all expressions of interest and offers, including carrying out sufficient investigations and due diligence to determine their genuineness (if any doubt exists);
(d)    creating competition (where reasonable) between interested purchasers;
(e)    obtaining independent expert advice on matters relevant to the decision to sell the property (including when and at what price to sell the property), such as an independent valuation, in particular:
(f) best price;
(i) (ii) (iii)
prior to settling on the final sale price; when the market is in a state of flux; when there are divergent views within the SC; or
where the property is of an unusual nature or has mixed uses, eg, it is
(iv) not purely residential or purely commercial, but is a mix of many types of use;
waiting for the most propitious timing for the sale in order to obtain the
(g)    disclosing any personal interests on the part of its members that might conflict with the duty to obtain the best sale price, either prior to the appointment of the member having the interest (in the case of pre-existing interests) or well before the SC makes a decision to sell the property (in the case of post-appointment interests);
(h)    ensuring that it has been properly informed of all potential conflicts of interests that may affect the advice it receives from any of its professional advisers; and
(i)    seeking fresh instructions or guidance from the consenting subsidiary proprietors where it entertains a reasonable doubt that its original mandate no longer reflects the consensus of the consenting subsidiary proprietors (eg, due to a change in the prevailing circumstances).

 
169 STB, an SC or its representatives ought to:

To round up this summary, we add that, in relation to the application process to an
(a)    act in a transparent manner and provide all relevant information to all subsidiary proprietors, including those objecting to the application;
(b)    assist the STB by making full disclosure of all relevant facts and circumstances that would explain how the decision to sell was reached; and
(c)    refrain from acting in an adversarial role against the objecting subsidiary proprietors.

Witnessess

Property agents would like to see the LTSA rule about en bloc lawyers witnessing every CSA signing. changed.  They are lobbying the MinLaw to rescind the law.

The MinLaw should remember why it drafted this rule in the first place - it has to go back and review all the complaints in the media from owners who were conned, cheated, lied to by property agents into signing. Various tricks were employed:

• Signatures that weren't properly witnessed
• Dates of signing left blank,
• CSA signature pages turning up in different months than they were signed.
• Suspicious 'extra' pages that some owners signed for additional amounts but were not properly recorded.
• Owners never receiving certified copies of their legally binding contract
• Owners lied to about the current consent level.
• Manipulation of unit numbers and number of owners in Statutory Notices.
• Statutory Notices not certified by en bloc lawyers
• Property agents turning up at places of work to harass owners into signing.
• Property agents knocking on doors at all hours harrassing owners into signing.

The property agents cannot be relied upon to do an honest job. They are deceitful and spin stories out of their elbows.  En bloc lawyers have their reputation and license to protect and hopefully can be relied upon to follow the law. They should demand upfront payment for witnessing signatures. Owners should go to the lawyer's office to sign and come away with a certified copy.  Every 4 weeks, Statutory Notices are to be put up on the Notice Boards and owners should demand not only the bare numbers but the names and date of signing as they go along.

No more monkey business when it comes to the requisite number . No more telling owners 80% has been reached when in fact it is only fluffed out with conditional signers who will be dropped after the sale. No more adding fresh signatures after the sale and back-dating their date of their signing to fill in holes. No more telling owners they have to sign as 80% have already signed.

Ministry of Law, if you read this, do not be persuaded by arguments of expediency. Solid procedure  before corner-cutting measures, please. 

LAGUNA PARK

Laguna Park residents to push for en bloc sale again

Residents at Laguna Park condominium in Marine Parade are giving the en bloc sale process a second try.

A new 10-member sales committee comprising eight new members has been set up.

At an extraordinary general meeting held on Sunday, some residents voiced confidence that a sale can be completed in three to six months, while others reportedly raised concerns about the recent changes in the Land Titles (Strata) Act which are intended to streamline the en bloc sale process and prevent lengthy disputes.

The previous attempt to sell the 33 year-old former HUDC estate for S$1.2 billion failed last year.

Channel NewsAsia – 2 May 2010

Achieving 80% but failing to find a buyer does not fall within the 'relevent event' catagory. 

MinLaw

I have been told that the Ministry of Law actually pays attention to the letters it receives from the public. No complaints means everything is hunky-dory and their rules and regulations are fine with everyone.

Wrong.

So, can I implore anyone who feels the LTSA is not good enough and the new amendments do not go far enough in protecting estates from the destructive force of en bloc before there is a sale, or for some other reason, to write in and register your concerns.

Do not let your poor command of English deter you - just write to the following address:

contact@mlaw.gov.sg

Apparently, the property agents and others with vested interest are pushing for a loosening of the laws - and if there are no counter arguments/letters from the general public then the gains made up to date are in danger of being rolled back!  So, stop being complacent and get on your bikes - put in your 2 cents to protect your homes.