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"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."
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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.

Development Charge rates

Development Charge Rate has increased to $4200 for Tampines Court
This is an increase of $700

https://www.ura.gov.sg/uol/media-room/news/2017/Aug/pr17-57

It isn't too difficult to calculate the Differential Premium (DP) for TC using the government tables and following their worked examples. But I am just a layman, don't forget.... I may be talking through my hat here

I don't think there is any need to panic over the new DC rates as the Buyer & MA would have likely factored in the expected rise in their DP computation (Table below IS MY OWN.).

The DP & LUP calculation factors into the computation of the land value in the RLV.

Remember I queried  the '1.55 to be determined' at the meeting? We all know it is 1.71 from Rd1

So, when the correct figure of 1.71 is determined the DP won't be too off the mark . The LUP might have been inflated to cover the difference so that the Total payable is still approx $358,724,555? Is that how the game is played?

Swings & Roundabouts

We will need to see the exact Clauses in the S&P covering the DP/LUP. Does the buyer have an exit if it exceeds the agreed Total?  Is the difference (if it is more) absorbed by the buyer or the owners?  The devil is in the details, so we shall wait and see.


Note: Sale Price Analysis slide at SP Meeting 25 Aug 2017 showed 
 DP: $243,724,555 and estimated LUP $115,000,000
Total payable by Buyer: $358, 724,555
Naturally, I can't get these exact figures but close is good enough for me

Government Table & Worked DP Example from SLA website

35 comments:

  1. I think this kind of posting is more objective. We should worry abt more impt issues that may affect our enbloc's success. If failed everyone suffer.

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  2. There is no exit clause for the DC...there is only one for the LUP of 115 million. The increase in DC is within expectation and already factored into the offer price.

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    1. Oh my GOD. We are far from success. We laugh too early. Let's don't waste time on renovation matters pls. LUP seems to be the issue right now. We truly learn something new everyday through the process. Hope we don't drag till next year March, when there is another round of DC increase. Things are out of our control guys.

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    2. The MA/Lawyer? was very confident at the SP meeting that the LUP was set at a comfortable figure. So there should be no worries there.

      I believe in some weird way, a drop in LUP is a bad signal to the developer - for example, if they were going to build a crematorium next door then the LUP would drop. This is NOT going to affect us so there is no need to worry ... just me musing.

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  3. If I'm not wrong, the LUP is not impacted by DC increase, it's only dependent on the market value of the land. The DP is, however impacted by DC increase (20% more)

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  4. I find it weird talking about LUP, TC already sold at $970M. So now you can say is not sold because of LUP.

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  5. By the way, it is not all doom and gloom....if chief valuer values the land at 1 billion for example, it simply makes it easier for us to fix the RP for enbloc 4 if sim lian walks. That said, i think the chance of sim lian walking is slim....even at a valuation of 1 billion, estimated LUP is 120 million - 5 million more from redline...i dont think they will walk away from a billion dollar deal just because of 5mil...so looks like it is still all systems go...

    (moved by itshometome from another post to here)

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  6. I am glad we are finally making some progress :

    1) SSD resolved
    2) Reno claim resolved
    3) DC/LUP hopefully resolved

    If no objections hopefully we can progress to the most impt stage : early completion and we can all get our money early and move on with our lifes.

    Way to go guys ! Unity is winner !

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  7. This comment has been removed by a blog administrator.

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    1. We are not the only one affected. Recent enbloc sales are almost all affected. Pls be optimistic. But of course, don't commit anything until STB give clearance...

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  8. Hi blogger, My apologies. I had used the date on propertyguru which states TC was completed in 1984 (84.5% - percentage of freehold value). I now look at your page and realised its actually completed in 1985 with a rate of 85.4% (percentage of freehold value). Based on 85.4%, i recalculated the valuation for 115 million LUP to be about 1.04+ billion. I think its a much more realistic number although if valuation is higher than that, it could still mean LUP condition is not fulfilled but the gap is narrower and there is a greater chance developer ok to top up the difference. So though we are still not completely out of the woods yet but it would seem its back to "all systems go". That said, i would still urge all SPs to exercise caution when it comes to getting the next unit; at least wait till the LUP figure is out....once that is settled, i do not foresee any other issues that would abort the sale.

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  9. hi blogger, u may want to delete my earlier post on the wrong percentage to freehold value as u deem fit...should be 85.% instead of 84.5%. Do not want to cause unnecessary panic,...but the LUP is cutting too thin in my opinion. cheers.

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  10. When will the LUP figure be released by the chief valuer?

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  11. Are official LUP numbers announced prior to STB approving the sale or is part of the 3 months sales completion process? Does anybody know?

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    1. In Rd 1 (2007):
      Date of Sale: 27 Mar 2007
      Date of OPP: 3 May 2007
      Date of LUP (in principle approval): 22 Jun 2007

      'The in-principle approval for lease extension was valid for only 6 months., it did not constitute a formal offer to upgrade the lease and it was up to the buyer to obtain the necessary clearances from the relevant technical agencies and to seek SLA's formal approval (on behalf of the Government) for the LUP and lifting of title restriction.'

      So it should be as fast as that.

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    2. So our date of sale is 22nd Aug, Date of OPP is 22nd September, we should know within the 3 months that STB approves our sale?

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    3. OPP is outline planning permission,; this is a technicality you don't have to worry about - buyer's business.

      For TC owners;
      If there is no High Court then this is the estimated Timeline according to the MA:

      22 Sep: Application to STB
      22 Nov: Approval from STB
      22 Feb: Completion of Sale & money in the bak
      22 Aug; Last day to move out

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  12. So i think we can expect LUP to be out sometime end of this month?...or latest beginning of next month.

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  13. So is the LUP confirmed? How can it become such an inflated value. It should have been considered by developer. Dont think they will back out of this deal right?

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  14. Sooooo... if STB approves the sale and it does not go to high court then safe to say that LUP is a non issue, correct?

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  15. If want to be even faster, get 100% signature. Don't understand why minoroity still want to hold back signing since by now they should know they have literally no chance in their objections. Why want to waste money and everybody's time ?

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  16. Yes. would suggest the minority consider signing the CSA to hasten the whole process. From the look of things, it does not do anyone any good to delay the process unnecessarily for another 2 months. More signing up would also mean the developer would be more willing to close the gap on the LUP if it goes beyond 115m as it would allow them to put the new units on the market faster...i think some of the minorities do not realise inaction on their part actually has vast ramifications especially now when we are still not completely out of the woods yet. The ironical thing is many if not all the minorities actually want to see this deal through and they thought that as long as they do not object, its ok to remain as a minority as the deal will still go through anyway. thats true under normal circumstances; unfortunately circumstances now are not so normal...if u know what i mean..

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  17. Your point is moot. We just want to know if sim lian will walk away because of the LUP. So even if we got 100% if the LUP is high the purchasers can choose to walk away from us. I've learnt to respect my neighbors decisions to not signI suggest you do the same.

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    1. did u suffer a financial loss?
      Did u find the bid price too low and the enbloc process not in good faith - sales com collude...side payments?...tender process questionable etc?
      Did you spend a lot of money renovating your unit just before they announce the start of enbloc 3 and are u prepared to go to the courts and spend more than your reno on litigation costs just to claim your reno back and make a point?
      if not...then why u still want to be a minority and not want to be paid 2 months earlier? is it so that u can buy the next property at an even higher price later?
      i am truly baffled...it simply does not make sense at all....maybe someone can explain to me...

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  18. There is too much noise in the background and people are speculating too much. There are many questions but noone wants (or dares) to answer. Those who know are not saying - why should they.

    As for Sim Lian walking - I hardly think that is a likely case unless the LUP is really, really crazy (which cannot be so - if LUP is crazy, then all land will be crazy and crazy will be the norm). If Sim Lian gives up, they are back to square one in a market that is on its way up. And after the celebrations and giving up after the newspapers have all published the news....?

    Suggestion - sit on our hands. Better just to wait.

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  19. Dont think the developer will walk away based on the LUP la, it is only a small difference in LUP(5 mil or more correct me if im wrong) and in newspaper sim lian says intend to build 2000 units, if they back out where is their credibility?!

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  20. If Sim Lian bids for one of those large current offerings such as Park West, Normanton Park, Florence Regency and wins the tender how will this be viewed?

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  21. Doubt Sim Lian will have appetite for another 1bn to bid aggressively (of course may be wrong). They are the kings of tampines and TC is perfect for them.

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  22. What if Sim Lian walks away becus of LUP? We will still keep the tender deposit right??

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    1. Depends on the sales agreement. If it is conditional on certain LUP ceilings the buyer can rescind and will get his deposit back.

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  23. According to FB, OPP, TUC, LTUP application are done by developer. Concurrently our lawyer will do STB application. Let's aim for 100% signature or approval by STB so we can do the completion early. It's crazy a location normally asked for 1300psf has up their asking to as much as 1700 psf !

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  24. When can this LUP issue be resolved? By next month? SSD issue shuld have been solved already.

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  25. I checked with Hutton. They said the developer has not submited the LUP application yet.

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    1. How come take so long to apply? They could just send the application first before STB application

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