Disclaimer






"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."
Drop Down MenusCSS Drop Down MenuPure CSS Dropdown Menu
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.

STB or High Court for '0.25% or $2000, which ever is higher'?

NO RENOVATION COSTS FOR OBJECTORS AT STB
 The confusion lies in the subtle difference in the 2007 & 2010 LTSA Amendments

2007

'First reading of the Land Titles (Strata) (Amendment) Bill by DPM S Jayakumar, 27 Aug 2007

STB to be empowered to increase proceeds 

13. As outlined in the consultation paper, the STB will be empowered, in certain cases, to increase the sale proceeds to be received by minority owners who have filed valid objections to an application for en bloc sale of the development which the STB approves, and the STB finds that they have not been treated fairly or equitably in the distribution of the total sale proceeds..

14. The increase in sale proceeds to these minority owners will be funded from a pool which will be constituted from contributions made by all owners in the development. The contribution required from each owner will be either 0.25% of the sale proceeds of his unit or $2,000, whichever is higher.'

(MinLaw Extract 28/08/07)'

64. 'Secondly, we intend to give the Strata Titles Board a certain power to increase the sale proceeds in certain cases. Let me explain. This concerns the distribution of the sale proceeds. We will not change the basic approach for the distribution of the sale proceeds. The basic approach is that the majority owners in the en bloc process will still have to decide on the distribution method most suitable in their particular circumstances. The reason why we want to give this power to the Strata Titles Board is to address situations where the Strata Titles Board considers that a minority owner may not have been treated fairly or equitably in the distribution of the proceeds, although it may not be able to find any aspect of bad faith in the process.
... Say, a minority owner does $200,000 worth of renovation when there was no en bloc proposal in the air. And six months later, there is an en bloc proposal which becomes successful. In fact, it means that he has enjoyed his renovated unit only for about two years before having to move out. He really does not suffer a financial loss under the terms of the Act but the Strata Titles Board may, if they have this discretion, increase his sale proceeds by an amount which it considers fair if it considers it fair and equitable to do so in the circumstances. But there will be a cap on the amount that is available to the STB to award such extra amount, and the proposed cap will be an aggregate sum of $2,000 or 0.25% of the sale proceeds from each unit or whichever is higher. So there will be a certain sum with which they can exercise the discretion. ...'
DPM S Jayakumar
(Extract taken from Gilstead Court COA 2015)
This was inserted into the LTS (Amendment) Act 2007 s 84A which read:
(7A)  An order made under subsection (7) by the Board may, with the consent of the collective sale committee, include an order that the proceeds of sale for any lot to be received by an objector, being a subsidiary proprietor who has filed an objection under subsection (4), be increased if the Board is satisfied that it would be just and equitable to do so.
(7B)  The total sum ordered by the Board for all the objectors under subsection (7A) shall be paid from the proceeds of sale of all the subsidiary proprietors and shall not exceed the aggregate sum of 0.25% of the proceeds of sale for each lot or $2,000 for each lot, whichever is the higher.

Hooray for  Minority rights!

2010
Right, so far so good.... now let's move on to 2010 where we have K Shanmugam as Minister of Law and so begins another round of amendments. This is where, very quietly, without any fanfare, one solitary word was changed in 84A (7A) and (7B). The LTS (Amendment) Act 2010 transferred the power to increase the sale proceeds to be received by the objector with the consent of the CSC, which was originally with the STB, to the High Court. There is no mention of this subtle, but hugely important change in the Second Reading of the  LTS (Amendment) Bill 2010. 

Sneaky, sneaky, I say - and out go Minority rights again.

 LTSA 2010 s 84A

(7A)  An order made under subsection (7) by the High Court may, with the consent of the collective sale committee, include an order that the proceeds of sale for any lot to be received by an objector, being a subsidiary proprietor who has filed an objection under subsection (4A), be increased if the Board is satisfied that it would be just and equitable to do so.
(7B)  The total sum ordered by the High Court for all the objectors under subsection (7A) shall be paid from the proceeds of sale of all the subsidiary proprietors and shall not exceed the aggregate sum of 0.25% of the proceeds of sale for each lot or $2,000 for each lot, whichever is the higher.

Oh what a shame. So, unless you are extremely gung-ho and really, really want to get your money back on your renovations, then going to High Court seems to be the only route. You would have to do you sums and see if it worth your while. Perhaps $100k-$200k worth of renovations done prior to the setting up of the Sale Committee is worth it, but not $50k. The date of the first EOGM to form the CSC seems like a logical place for the start of an enbloc. Before that it is only talk & rumour, and TC and other estates are in perpetual enbloc-rumour-mode. This might be a potential point of challenge at the High Court. 

This kind of objection, though,  would not derail the sale, it would just delay it.

  NO RENOVATION COSTS FOR OBJECTORS AT STB
ONLY AT THE HIGH COURT   

4 comments:

  1. go to the high courts just for a claim? Also its stated the reno has to be done prior to the notice of enbloc..that means you do it before enbloc 3 begins which is in 2015. Taking into account depreciation, the high court will not awarding the full reno cost...i am guessing they will have a depreciation scale...all things considered, may end up losing more money than the amount claimed with litigation costs and fees factored in...not to mention wasting time and energy sorting things out in the courts...good luck to minority going down this path...would suggest just take money and go...do not be penny wise pound foolish..

    ReplyDelete
  2. If I read correctly, DC rate is up 20%. better take money and go...do not quibble over small money...look at the big picture...some people's lives literally depends on this.

    ReplyDelete
    Replies
    1. Will get on to that after I finish with my current, interesting knot....

      Delete
    2. DC increases to nearly 30% for Tampines. Just wonder whether this is one of those conditions that affect our enbloc process... hope not.

      Delete