A new pitfall has presented itself through Tampines Court En bloc Round 2 concerning the Amendments made to the LTSA (2010): They don't work.
Rules and their empty penalties.
A lot now falls into the hands of the managing agent of the estate. But nobody has prepared them for their new and important task. They are maintenance people; they simply take care of the estate and hold regular AGMs. They do not know the intricacies of LTSA and the consequences of miss-steps along the way. They are unprepared and hopeless at the task.
The 20% requisition: they are likely to mishandle even this minor task. They set a date for the EGM and scramble to have the necessary 20% by the due date. Cart before the horse.
The First EGM for the constitution of the sale committee: they are unaware of what motions to include. They can completely eliminate the 'powers, duties or functions' as they do not see their importance.
- At the EGM proper; they do not know how to apply the eligibility rules and have no clue about the importance of disclosure. They ignore the fact that it is a compulsory for candidates to disclose the nature and extent of ownership in the estate - whether by themselves wholly or jointly. And this extends to family members and other associates. It's written there in black and white . The penalty for non-disclosure by a candidate is to have his election made void. Do they apply the penalty? No.
- The rules say that a written declaration must be made "before or at the meeting" but the MA can totally ignore that minor detail and postpone any written declaration until AFTER the meeting when everyone has gone home. Any disclosure of bankruptcy or arrears to the MCST has therefore not been made known to the owners before they select a SC member. In fact, they never get to know.
- When asked to investigate undisclosed associate connections they refuse to do so, even when handed the names and unit numbers on a plate.
The disclosure rules are toothless.
This is what the MinLaw has to say when asked what recourse is open to owners whose managing agent is not up to the task.
We refer to the issues that you have raised with respect to the en bloc proceedings.
2. If subsidiary proprietors (SPs) have reason to suspect that a member of the collective sale committee (CSC) has not fully disclosed potential conflicts of interest, they should establish the facts and highlight their concerns to the other members of the CSC, the property consultant and/or the lawyer. SPs can organise a general meeting to remove any such member of the CSC found to have a conflict of interest which had not earlier been disclosed. SPs can also collectively agree to, or reject, the terms and conditions of the Collective Sale Agreement (CSA) put forward by the CSC by voting during a general meeting. Further, if the CSC does not comply with the requirements under the Land Titles (Strata) Act and this prejudices the interest of any person, SPs could raise the non-compliance as an objection when the CSC applies to the Strata Titles Boards (STB) for a collective sale.
3. The STB will try to resolve such disputes through mediation. If there is no resolution at the mediation stage, the Strata Titles Boards will issue a “stop order” to discontinue the proceedings. Majority owners can then choose to apply to the High Court for adjudication inter alia including on the issue of non-compliance. Objectors may also choose to file the same objections in the High Court.
Source: extract from email from MinLaw to 'itshometome' dated Mar 28, 2011
Step 1 >>> I wrote to the managing agent. He refused to look into the 'associate' angle even after I had done the legwork and investigating for him and established the facts. One SC member did not disclose her co-mortgagee's interest in a second unit in the estate. She did not disclose her sister's ownership in 2 units in the estate. All 5 units were recently bought within 6 months of each other.
Step 2 >>> I wrote to the sale committee who replied that it was none of their business. I have to agree with them, it should be the managing agent's.
.
Step 3 >>> I will ask the en bloc lawyer. But he does not come onto the scene for at least 3 to 6 months after the first EGM and I have no confidence he will not act on this matter. It is not in his mandate to rectify past mistakes or apply EGM rules retrospectively. He's the supposedly smart one and knows clause 10 of the 3rd Schedule will effectively take care of any 'defect or disqualification' of any sale committee improperly constituted.
Ask the Property consultant?? and you expect him to step up to the plate after the managing agent, sales committee and en bloc lawyer have all refused to become involved?
Update Sep 2011: I believe the en bloc lawyer did step in and do something about this errant SP member. I have no idea what was said or done, but not long after I sent my letter detailing my concerns to him, the SC member mysteriously resigned. Finally, some justice, 9 months late.
Step 4 >>> Hold another EGM. Now we know for sure MinLaw is sending us on a wild goose chase! Going around in circles like a dog chasing his tail. A fresh EGM ( and a fresh 20% requisition) to ask owners to apply the LTSA penalties for an EGM held months earlier, and these penalties are dependent on being passed by simple majority in a resolution. With no one to enforce the rules at the beginning - there simply are no rules.
Step 5 >>> Ah, the powerless STB...... TWO YEARS AFTER THE FIRST EGM.
The owner now has the added burden of proving that the non-compliance has prejudiced his interests and the case gets booted to the High Court.
If not, then the non-compliance just becomes a technicality covered by clause 10 and can be safely ignored.
The Ministry of Law must be laughing up it's sleeve at us.
Amending the LTSA to accommodate the stern rulings given by the Horizon Towers Appellate Court on the one hand, whilst neutering their effectiveness and relevance on the other. They really, really didn't want that landmark decision to upset the en bloc applecart too much, yet they couldn't just ignore it either.
Some window dressing was necessary.
So, the new rules were crafted in such a way to be largely all bark and no bite.
Well, Mr Liew & Mr. Tan..... take a good look at Silversea; a unit there sold in Jan for $2465 psf. People will pay through the nose for that seaview. Laguna Park owners have every right to feel sanguine.
