Powers, Duties or Functions of the Sale Committee

The managing agent in Tampines Court refused to include the powers, duties or functions of the sale committee in the agenda of the first EGM held on 29 Jan 2011.

Take a look at the  Second Schedule:

(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.

There is nothing ambiguous about this motion.

Apart from it being in the Second Schedule (and you would think that would be enough for the MA)  - it is also mentioned in the THIRD Schedule that powers can be conferred at this general meeting too:

General meetings convened by collective sale committee
7. —(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.

So, since there is no other general meeting before (a) other than this EOGM - the power to authorise the SC to appoint the marketing agent and lawyer can be only be done AT THIS FIRST EOGM. It is just one of the powers owners may or may not confer on the SC.

Of course, this is not the ONLY power (or curtailment of power) that owners may wish to confer. The motion says powerS, dutieS or functionS

Q: Why does the  3rd Schedule say one or more general meetings?

If at the FIRST EOGM, the owners empower the sale committee under 'powers duties or function' to appoint the marketing agent and en bloc lawyer themselves, then the second EOGM can be dispensed with.

Since all units in TC have the same share value - the issue of apportionment is not difficult and easily resolved ... so.... EOGMS (b) &(c) can be just a single EOGM.
(By the way, this is for all owners to decide - hence I am only giving  an example of what might be)

So total:

This EOGM and the combined (b)(c) EOGM

By denying us our statutory right to decide on some powers, duties or function ) this MA is forcing us to go the long way round and is curbing our new-found control over the process given to us by the amendments in 2010.

"The real point is that owners are free to adopt these measures if they think they are suitable for their particular circumstances.  Thus, the ultimate choice is with the owners themselves on how the sale should be conducted.

 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.

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 they 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.

 ..... property consultant or agent to provide their business proposals that they prepare for prospective buyers, it is best to leave these matters to the owners to request for such information if they consider it appropriate.


At the end of the day owners are making choices with respect to their properties which involve millions of dollars. You expect them to know what they want, and what sort of safeguards they wish.  Our task is to prescribe certain minimum standards of conduct and to make sure that the whole process is fair, transparent and refine it as we go along, as we are doing now."

  

The Minister of Law, Mr K Shanmugam, Order for Second Reading of Land Titles (Strata) (Amendment) Bill, 2010 and Oral Answers to Members Questions

Fine words but the reality bears no resemblance to this idealistic vision of sensible and forward thinking owners.  If the owners do not set the powers, duties or functions of the sale committee, then the SC ( usually comprising mainly of flippers and property agents) along with the opportunistic marketing agent and lawyer, will select those powers for you.  They will elevate the SC to an untouchable state, add terms and conditions so obtuse and convoluted owners will be confused, and strip owners of all  power.
The only personal power you will have left is your pen and your power to either sign or not to sign.

You think I am exaggerating? Wait until you see the CSA and then watch me wag my finger and tell you "I told you so!" :)

In an ideal world, where owners behaved sensibly,  what limits should they set?

Powers, Duties or Functions (my list) 

1. Get a proper, independent Valuation done before presenting the SPs with a proposed RP. This Valuation must not be done by any MA. Getting the necessary money for this will be their first challenge. A proper valuations costs around $30k and it must show entire workings and sensitivity data, and not just a final figure..
2. Before the sale tender is awarded and before signing the S&P, the SC must first seek full reaffirmation from the consenting owners from whom it draws its mandate at a general meeting to be held specifically for that purpose. Alternatively, a reaffirmation letter from the lawyer to be sent to all consenting owners to be signed and returned to the lawyer within 14 days from date of postage - non-receipt would be deemed as "re-affirmation". The total reaffirmations should hit 80% to preserve the element of majoritism.  
3. The sales committee has a duty to hold monthly meetings with owners to update on the progress of the collective sale, answer all questions owners may have regarding the sale and provide all documentation that owners may request. There can be no 'private' or 'confidential' information in a collective sale.
4. The sales committee does not have the power to determine all the terms and conditions of sale in the collective sale agreement and they do not have the [power to alter the Agreement once ratified by the owners.  At the EOGM for 'approving the terms and conditions of the collective sale' Third Schedule 7.-(1)(c), owners must be guaranteed voting rights on each and every contested term or clause. Owners also must be given the right to vote on additional terms or clauses, not stated in the draft CSA, but emanating from  owners themselves at the meeting.
5. The sale committee must include a 1-for-1 exchange as a second option of payment, the first option being cash.  The details of this option to be worked out with the interested owners at a later date. An owner, or a group of owners,  may engage a lawyer to represent them  in this matter. 
6. The sale committee must  make full disclosure to all owners of the INVESTMENT PROPOSAL (BUSINESS PROPOSAL) given by the marketing agent  to  potential developer-buyers that show the residual land value.

The DUTIES of the sale committee  are clearly laid out in  the Horizon Towers Appelate Court Decision . Any wanna-be member who cannot read legal documents should not even consider joining the sale committee.

The duties of an SC
134      Having regard to our earlier analysis, the duties of an SC include (but are not limited to): (a) the duty of loyalty or fidelity; (b) the duty of even-handedness; (c) the duty to avoid any conflict of interest; (d) the duty to make full disclosure of relevant information; and (e) the duty to act with conscientiousness. As, under s 84A(9)(a)(i) of the LTSA, the price of the collective sale is an ingredient of good faith in the transaction, the SC must act with conscientiousness to obtain the best price reasonably obtainable for the property – in short, to behave as a prudent owner would. We will now give our views on what these duties entail.

Please click here for the duties

EOGM No.1 2011

We have all received the NOTICE for the EOGM to be held at the Primary School opposite at 2pm on 29th January 2011 for purpose of a collective sale of Tampines Court.

It appears  an important chunk of the Second Schedule has not been reproduced  in the Notice.

In the Second Schedule proper  - but missing in the 'Explanatory notes to Notice of Extra-ordinary general meeting' - under Notice of general meetings, it states:-

(3) No motion shall be submitted at a general meeting unless -

(a) notice of the motion has been given in accordance with this paragraph; or

(b) the motion is a motion to amend a motion of which notice has been so given.

This right given to owners to stand up at meetings and propose 'a motion to amend a motion' cannot be denied! It is not a widely known power amongst owners and not including it in the explanatory notes is reprehensible. If you think the motions are rubbish - stand up and amend them!

In the Second Schedule it also states:-
(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 a general meeting.

Yet, in the AGENDA for the meeting there is only one resolution:

2.1 To consider and if approved, to resolve by way of ordinary resolution that a collective sale be considered for MCST 2644 - Tampines Court; and if so to appoint a collective sales committee.

What about the equally important powers, duties or functions? When will they be decided?
Why is there only half a statutory motion??

The recent amendments to the LTSA 2010, the speeches made in Parliament by our Minister of Law Mr Shanmugam, and the Supreme Court itself have all made it very clear that owners had the power to conduct the sale in the manner they see fit.
Resolutions 3,4,5 on the requisition form are absent from the Agenda.  Is the requisition still valid?

REQUISITION FORM
Dated 29 November 2010 - lists out 5 hopeful resolutions - none of which actually made it onto the Agenda.

The list of requisitionists is very interesting. I have found that a full 41 out of the 117 owners are new owners. In other words 35% of the requisitionists have all bought their units in 2009 and 2010 (bar 1 in 2008, straight after the failed en bloc). One bought 2 units and requisitioned twice. Most of the old sale committee and their backers  are there - but not the ex-chairman. I note one ex- 'conditional signer' who signed for more than the RP in round 1 but was subsequently dropped after the sale. There are 6 ex-minority owners including one ex-minority objector on the list. There are plenty of irregularities in the list  in the Notice - I expect the MC to step in and exercise due diligence in the matter and put right any mistake the MA may have made.

UPDATE 25 Jan 2011

A NEW Notice has been sent out to all owners. The MC ( i.e moi) conducted due diligence and found the original Notice full of errors. They sent in a bunch of useless requisitions, and the managing agent did a very poor job at weeding out the duds.

All I can say is, if this is the standard at which the pro-enblocers will perform to, then TC had better watch out.

Transcription please

 TRANSPARENCY IS ABOUT ACTION NOT LIP-SERVICE!

If any owner would like to see things done properly this time round, please feel free to copy and send in the request below with your name and unit number.

Address it to the Secretary of the MCST 2644 (Tampines Court)
or
ATTENTION: ALL MANAGEMENT COUNCIL MEMBERS of the MCST2644.

Hand it in to the MCST office Blk 120 to Wilson

You enjoyed reading the taped transcripts of what was said at the STB 2008? Well, let us have the same level of transparency in ALL our EOGMs.

THE COST OF A TRANSCRIPTION >>>APPROX $2000

Better that than waste money on 'refreshments' such as curry puffs ... 

What are we? Starving?

Let not there be claims of "he said, she said" and let everyone's voice be noted.

Honey, I shrunk the flat, but it's just us now  Business Times - 01-Jan 2001  Mass Markey Condos expected to lead demand for private homes CNA- 6 Jan 2011

Let The Games Begin

TAMPINES COURT EOGM 

FOR THE PURPOSE OF 

A COLLECTIVE SALE

 29TH JANUARY 2011

By LTSA rules, owners will be given 2 weeks notice... so expect the notice to come sometime before the 15th.

I think the pro-enblocers should have had the courtesy to write to all owners about their plans and not hope to spring a surprise on the estate.  If the estate wished to go for a collective sale then we will be presented with a bunch of strangers (and some not so strange) to vote onto a committee. 

• Being 'interested' is not enough.
• Claims of 'experience' can be exaggerated.
• A stranger's integrity at an EOGM cannot be gauged.
• Personal motives cannot be plumbed.
• Professional connections  can be hidden until after election when their revelation to the SC Chairman will not preclude them from serving on the SC.
• Intelligence can be estimated (sir, are you an systems engineer or a glorified waiter?)
• Personality weakness' can be sensed.

And leaving everything to chance on the day itself is like plucking a number out of a hat - maybe it's a winner, but the chances are it will be a dud. A dangerous dud.

What a god-awful system! Does the Government grab nobodies off the street  with nothing more than a perfunctory pat down and allow them to handle Government Land Sales  just because they put their hand up as volunteers? They do not! You can be sure the men and women are all highly qualified and knowledgeable in that area. No 'interested volunteers' in those multi-million dollar deals! But the Gov. doesn't mind letting loose this second rate model on private owners - any mess it creates and the blame can be pinned elsewhere.

You would need to be either psychic or nuts to allow a mere NEIGHBOUR who is a total STRANGER with NO CREDENTIALS, NO EXPERIENCE, NO PROFESSIONAL INSURANCE  with UNKNOWN PERSONAL MOTIVES  to handle the sale of your most valuable asset  ........ especially after our recent experience with one such group of 'interested volunteer owners' from round 1!

A comment below about how the "sale committee will be supported by the marketing agent and lawyer."

'Supported' sounds comforting and safe; the inference here is that the MA and lawyer must have the owners' best interests at heart, they are professionals after all and in the employ of the owners.

But they are not in the employ of the owners - they are free-lancing and riding on the coat-tails of a possible lucrative deal until they secure the sale  and collect their commission (and probably a nice bonus from the developer, too.)  . They want the sale to happen MORE fervently than anyone else.  The MA  takes the road of least resistance to it's reward. Vested interest rules his world.

The Sale Committee is not so much 'guided' by the marketing agent as 'led by the nose'.

From another post on the same subject:-
Nevertheless, owners should be very wary of the vested interests of the en bloc lawyer and property agent and take each step with caution. No one is on your side but yourself, and it is wise not to put too much faith in the integrity of strangers where money matters are concerned. The temptation to cut corners, devise ways to concentrate control, manipulate sentiment on the ground and ply pressure especially in the final stages is strong and are all means to an end - the end being securing their own fees and commission.

,

Let me cite from the transcripts of the Tampines Court STB Tribnal proceedings, dated 16/17 June, 2008. (cross examination of property agent by minority lawyer, names are deleted)

.
Q. I’m putting it to you that all you were interested in was closing some deal to get your $1.9 million in commission; agree or disagree?

A. Ultimately, yes.

Q. I’m putting it to you that you did not help the sales committee get an independent valuation that would give them a chance to assess your reserved price of $389 million; do you agree or disagree?
A. It’s not necessary to do so.

Q. I’m suggesting to you the only reason why it was not necessary to do so was in your interest, (property agency)’s interest.

A. Interest, ultimately, yes, upon the sale completion of the en bloc sale.

.
Property agents and serial en bloc lawyers have an ongoing professional relationship with buyer- developers, both big and small. They have only a fleeting, one-off relationship with an en bloc estate. No cigar to anyone who knows which relationship is more important in the long run...

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