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."

SALE IS NOT CONFIRMED
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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.

Blur

Some in the majority camp don't know the terms and conditions they signed for in the CSA. Two ladies on the FB page think that the Marketing Agent and Lawyers fees are too high and should be renegotiated. 

'All this fees re negotiable' FB 10 Oct 2017

I have news for them, they may be on the high side but those were the terms agreed by the CSC in early 2016 and subsequently endorsed by your sweet selves when you signed the CSA. They cannot be renegotiated 16 months after the fact. 
Another owner is equally aghast at such a foolish request.

'What if the enbloc was not successful? The agreement is that the MA and legal firm would not be paid a cent for all their efforts. Be reasonable. You are not buying veggies at the round market.' FB 10 Oct 2017

Hmmm... another little point for me to ponder. This is just a hypothetical exercise as I do not see Sim Lian pulling out of this deal , as someone has already commented, this deal is a steal, no other HUDC will go for under $700 psfppr.

Are MA & Legal Fees payable if the sale is aborted?
Looking at the S&P this evening, I counted 10 instances whereby the deposit goes back to the Buyers with no interest payable. The ten instances are 3.3,. 3A, 3B, 3C, 3D, 3E, 3F, 4.0 , 6.23 & 10.3
Clause 9.0 is the only place where monies could have been forfeited by the vendors  but that clause is crossed out in it's entirety.

So it looks like owners will not be getting a penny if the sale becomes abortive at any point.

Now looking at the MA's  Terms of Appointment attached to the back of the CSA:
Clause 4.2 deals with an Abortive Collective Sale

If the Collective sale is aborted after a S&P has been signed and the owners have forfeited the deposit;  the MA shall be entitled to either (whichever is lower)
  • a) 25% of the monies forfeited or 
  • b) 50% of the marketing fee
(paraphrased and emphasis added by blogger)

So, the question now is 'if the collective sale becomes abortive and the owners have not forfeited the deposit - is the MA still entitled to 50% of the marketing fee'?

I think the answer is No.

25 comments:

  1. What about 1st enbloc we paid out front of about $700+. The sales did not go through, I don't recall paying anything else.

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    Replies
    1. That was in another era. That lawyer, if my memory serves me, held the quite substantial deposit for a year and kept the interest. This was legal back then. There were 2 counts of bad faith against the sale, the owners were mad as hell and it would not have been worth his time and effort to take each and every defaulting owner to court. On top of that, he had to pay for Minority costs. He was a one-man firm (though he did pack a punch) and professionally, I think this was a brutal loss for him. We never heard about the 'enbloc king' ever again after Tampines Court.

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    2. Aborted sales also means NO sale. If no sale we also suffer opportunity & time lost. So why must we still pay them fee ?

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    3. NO sales means NO money come into our pocket, therefore NO fees. Period !

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    4. Well, I hope you didn't sign the CSA otherwise your 'Period!' will be worthless...

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    5. Sign or not, the logic applies to all real estate sale. You mean you will still pay your agent money if he didn't sell your property? You must either be a very generous man or a fool.

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    6. Blogger, the clause you mentioned is refering to the deposit paid by developer. Show me the clause that mentioned we must still pay the MA 50% marketing fee if there is No Sale or Sales aborted. I thought you are very good in enbloc sales. Why ask such a blur question ?

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    7. Logic does not matter much when you have signed a contract with terms and conditions. Go read up.

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    8. Anonymous 1.8. I have read the contract but have you ? I challenge you to show me the clause that state we have to pay the MA marketing fee if "the collective sales become abortive". If not, please don't act smart and create unnecessary tension and mis-understanding.

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    9. It's not in the S&P - it's in the Terms of Appointment which is attached to the CSA.
      Page 28, 4.2

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    10. Yes, I have read clause 28.4.2. It is irrelevant as it's refering to sharing of deposit if sales is aborted (if we do get to keep it) , and not about still paying MA marketing commission if there is no sale. It is a different issue. I still want Anonymous 1.8 to show me the clause to substantiate his point.

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  2. I'm not surprised at all. Many people are simply blinded by the money they will get and expect to be spoonfed. Good lesson for them.

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    1. As if you don't get the money which is double what you sell your unit in the market and happy about it. If you are not blinded by it please donate it to charity instead of talking big !

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    2. Sorry man, I'm not like you. The bigger the amount of money involved the more I will make sure I understand exactly what I sign. I won't let greed get the better of me.

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  3. that's a Friday the 13th joke for you!

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  4. Beware Enbloc Bubble by Redas Chief. http://www.tnp.sg/news/singapore/beware-en-bloc-bubble-redas-chief

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  5. looking at the land rate paid by sim lian compared to the other developers,..do you seriously think they will trigger an abortion? If they do, they must be seriously daft. also i believe the clause is triggered if the majority back out and not if the seller back out due to condition not fulfilled i.e. not due to the fault of the majority. The minority is truly pathetic...want the money but not the responsibility..lucky such cowardice thinking only a minority...literally.

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    Replies
    1. Re Anonymous13 October.【 minority is truly pathetic 】
      Who say all miniority want to sell?
      SG is a free country,dear.

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  6. So,if sale aborted,will all owners,【or all majority owners?pl tell me】,will get 50%,ie. 500,000, of deposoit,ie one million?

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  7. agree..when the sale is aborted not through any fault of the vendors, deposit is returned and everyone and i mean everyone gets nothing...sim lian - no land. TC - no money..agents - no money. lawyer - no money. there is nothing confusing about it,..suggest everyone chill and wait for sales order to be given. once that is given, can start sourcing for new house liao. and in case you thought i forgotten about the LUP condition, no..its just because in my books, the chance of developer aborting due to LUP is practically 0.

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  8. By right, we are entitled to keep the deposit just like normal unit sales when 1% is paid to vendor when OTP is issued. If the purchaser did not exercise the option on expiry of option period (normally 14 days), the 1% is forfeited by the vendor.

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    1. That option period is well and truly passed - they paid the 2% as an initial deposit and the 8% balance isn't due until Clause 3F if fulfilled ...ie, after the Sale Order, baseline confirmation, LUP Consent and LUP estimate.
      (My reading only of SPA)

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  9. this brings us back to the underlying problem with property agents - in the decades of dealing with them for sale and rental, basically I have not retained a single one for more than 5 years. They carry a nice card and title from a big property firm, but they are really freelancers and their tactics are never monitored by their firm, and reliant on regulatory requirements, and only then, they step back only if you warn them you will report their actions to CEA.

    This is the basic tactic of property agents since prehistoric times:
    1. Find a seller, the more desperate the better, especially those in need of cash rightaway
    2. Promise the sky to the seller and demand for exclusive rights, giving 100 excuses why exclusive is better, such as "I can have the key and open the door at any time" or "you have the network of my firm to help you look, its as good as all the other agents"
    3. Hopefully collude with other agents or at least a silent agreement that "I will not step on your turf if you don't step on mine" (may or may not work - a sharp seller will tease other agents)
    4. Once signed as exclusive, start giving all the excuses why the previous price does not work such as "The market is not good", "your facing is not good", "I brought a tenant 2 weeks ago, he wanted you to tear down your bedroom wall and replace with his prayer altar"
    5. Totally under deliver and keeping the exclusivity agreement with them and seller is now stuck
    6. Once tenanted or sold, leech on to the tenant side or buyer side for more business
    7. If tenanted, tell the owner that agent can offer "value added services such as management of unit for a separate fee - especially useful because you are always on business trips and not in singapore"
    8. Offer other ideas such as helping owner find apartments that will definitely enbloc, but upon enbloc, agent will collect a "finders fee" and while waiting for enbloc, agent collects management fee.

    Who else has these wonderful experiences? Is it curious then that we are all pissed with middlemen reaping more than they sow?

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    Replies
    1. This long grandmother story and complaint won't be applicable to you if sell your property on your own. Save up your commission too.

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  10. Touch wood..

    Next time,no agent please.
    CSC can just advertise an advert....
    The most apply badeline fr URA....

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