Condo glue case: Lower court to hear new evidence

THE prosecution has appealed against a $1,200 fine handed down to the former chairman of the Laguna Park management committee for his acts of mischief.

The appeal came up for hearing in the High Court yesterday, but the case was sent back to the lower court for new evidence to be heard.

Businessman Lee Kok Leong, 62, was convicted in April over two mischief charges.

He admitted to inserting super glue into the keyholes of padlocks at the front and rear gates of Mr Yap Cher Sim’s flat in Block 5000E on Aug 25 last year. For that, he was fined $800.

The same day, he committed the same offence at another flat in the same block, belonging to Ms Alice Elizabeth Rappa, resulting in another $400 fine.

Lee could also have been jailed for up to a year for each offence.

The acts of vandalism occurred last July amid a row among residents over whether the condominium should be sold en bloc. Lee was caught in the act by a closed-circuit television camera installed by Mr Yap in the common corridor.

The prosecution appealed against the fine. It also applied for new evidence to be cited for the appeal.

Yesterday, Lee’s lawyer, Mr Ramesh Tiwary, sought an adjournment.

Judge of Appeal Chao Hick Tin noted that the prosecution was seeking to enter new evidence, but he could not hold a trial or make a determination based purely on affidavits.

‘There has to be a further hearing before some other tribunal,’ he said, referring to a provision on criminal procedure.

Deputy Public Prosecutor Jennifer Marie asked for the additional evidence to be recorded by the same district judge that sentenced Lee.

No details of the evidence were disclosed.

But Justice Chao described it as a ‘pertinent piece of evidence’, noting there were three affidavits from the prosecution and one from the defence.

The judge directed that the additional evidence be taken by the sentencing judge without him making any finding.

Source : Straits Times – 16 Jul 2009

Horizon Towers ruling: All owners to get slice of $1.9m pie

Right to interest not dependent on actual outcome of sale: Court

ALL 210 owners at the Horizon Towers condominium will get a share of a $1.88 million sum which is the bank interest earned on a $50 million deposit from the estate’s failed collective sale.

The Court of Appeal decided that 33 of the estate’s minority owners, who did not agree to the collective sale in 2007, will also be eligible for a slice of the $1.88 million pie. This will work out to each owner getting about $8,900, depending on the size of the unit.

The en bloc sales committee of the estate had decided that the $1.88 million would be divided only among those who voted for the sale.

But the Court of Appeal, which disallowed the en bloc sale in April, said the sales committee was not entitled to split the money only among the majority.

The $1.88 million sum is the interest earned on a $50 million deposit which property developer HPL, which wanted to buy the estate for $500 million, placed after an agreement with the estate’s sales committee in 2007.

Judge of Appeal V.K. Rajah, writing the court’s decision, said the $50 million deposit was meant for all unit owners at Horizon Towers.

Justice Rajah said that in the case of a successful sale, all owners, not just those who agreed to the sale, would get part of the interest earned as part of the contractual arrangements. In an aborted sale, the same should also apply, he said.

Justice Rajah added that whether the collective sale failed in the end or not was ‘irrelevant’, as the right to the interest is an accrued right and not dependent on the actual outcome of the sales and purchase agreement.

He was also disappointed with lawyers from Drew & Napier who had ‘confused beneficial rights with contractual rights’ in advising the sales committee to keep the interest for the majority owners.

Industry players said this was the first time the country’s highest court has ruled on how such interest monies should be dealt with in aborted collective sales.

Horizon Towers’ collective sale was one of the longest disputed collective sale sagas in Singapore. The whole affair spanned more than two years and went back and forth between the Strata Titles Board (STB) and the High Court a couple of times before finally being decided in the Court of Appeal.

In the judgment published on Monday, the Court of Appeal also ruled that both HPL and the estate’s majority owners should equally share the legal costs for the second High Court hearing, as well as the Court of Appeal hearing. The costs for the second STB hearings were to be borne solely by the majority owners.

The Court of Appeal also made the unusual move of allowing two minority objectors who did not participate in the final appeal to be given 80 percent of the costs incurred in the second STB and High Court hearings.

Justice Rajah said the court was mindful that the significant costs incurred ‘at every step of these bitterly fought, convoluted and labyrinthine proceedings’ would have led some to forgo the appeal. ‘We cannot lose sight of the fact that the non-appealing parties together have (with the appellants) been literally driven from pillar to post in their arduous efforts to protect their homes.’

Although there were 33 objectors to the sale at the start, 13 pursued the case in court, and five continued the matter all the way to the appeal, said one of the final objectors, Mr Hendra Gunawan, 53.

‘We are happy the court has allowed us to protect our homes by giving this judgment,’ said the investor.

But he said he was a bit disappointed because he was hoping to get more costs awarded to them.

He estimated that the sum he would finally get would not exceed more than 30 per cent of the amount he personally spent on the case from the start, although he did not give the exact amount spent.

Majority owner Mamata Kapildave Dave, 40, said she accepted the costs outcome as fair and was waiting for the sums to be worked out.

Source : Straits Times – 15 Jul 2009

$120m target for first en bloc site this year

PROPERTY market observers are probably rubbing their eyes in disbelief but it is true: an en bloc sale is under way at asking prices akin to boom times.

It is the first tender in about nine months and reflects improved buyer sentiment although the sale launched yesterday will certainly test that sentiment, given the price levels it is shooting for.

The freehold Dragon Mansion at 18 Spottiswoode Park Road, near Outram and Tanjong Pagar, has an asking price of about $120 million or $1,020 per sq ft per plot ratio. This is significantly higher than the transacted enbloc sale prices in the area during the 2007 boom. If this price is achieved, the estate’s owners will get around $1.7 million for each of the 72 units.

The estate has a land area of 41,874 sq ft and can be redeveloped into about 120 apartments of 1,000 sq ft in size.

Dragon Mansion owners had wanted to sell collectively at the height of the boom in mid-2007 but their attempt was delayed when collective sale rules were tightened later that year. They had to restart the process at the beginning of last year but they also revised up their price.

In the Spottiswoode Park area, developer UOL bought the 92-unit Spottiswoode Apartment en bloc for $79.5 million or $732 per sq ft per plot ratio in April 2007 – a price that was above earlier indicative sale levels. It later bought Oakswood Heights for $132 million or $740 psf per plot ratio.

Property experts said the Dragon Mansion price target of some $1,020 per sq ft is more suitable to the boom times.

Mr Nicholas Mak said the market is not ready to support such prices as the buyer will have to sell the redeveloped units at more than $1,800 psf.

‘There is still a disparity between today’s land levels and the price in 2007 when most of the en bloc sales were priced,’ said Credo Real Estate managing director Karamjit Singh.

‘Owners will need to adjust their price expectations. The market is looking up but it’s still a question mark whether land prices will go back to boom time levels,’ he said.

Owners at Laguna Park in the east have high expectations as well and Credo Real Estate might launch the estate for collective sale next month.

The asking price is at $1.2 billion. The development obtained the 80 per cent approval from owners late last year but the price they are hoping for was decided back in late 2007.

Credo will launch other en bloc sites this year if the estates can obtain the 80 per cent approval soon, Mr Singh said.

En bloc deals shot through the roof in 2007 when 111 transactions worth a record $12.4 billion were sealed but sales fell through the floor last year with only seven sales worth $371 million done, according to CB Richard Ellis.

Ms Chia Mein Mein, manager for investment at CKS Property Consultants, said Dragon Mansion obtained the required 80 per cent approval to sell early this year but it waited for a good time.

‘It’s because of the run-up in property prices recently. Recent launches are doing very well. Some developers have sold off their existing stock and are looking to land bank at this point,’ she said.

‘We think there’s a window of opportunity now as we really don’t know how long this rally is going to last.’

Meanwhile, new unit sales remain robust. There has been a flurry of project releases and demand has been strong. The 272-unit Sophia Residence in the Mount Sophia enclave sold nearly 85 per cent of 88 units released at a weekend preview at $1,500 psf on average.

Singaporeans accounted for 60 per cent of the buyers, with the rest being permanent residents and foreigners.

These buyers included the previous owners of Sophia Court, who sold the site en bloc to developer GuocoLand.

Source : Straits Times – 15 Jul 2009

This year’s first en bloc sale hits the market

Owners of 72-unit freehold property on Spottiswoode Park Road are hoping for $120m

Dragon Mansion on Spottiswoode Park Road has been put up for collective sale – the first development to be launched for en bloc sale this year.

The owners are hoping for $120 million – or $1,020 per square foot per plot ratio (psf ppr) – for the freehold project, including a development charge of about $400,000.

The en bloc market here has shown little sign of life since the onslaught of the global economic crisis. A total of 116 collective sales were completed at the height of the property boom in 2007, but the figure fell sharply to just eight last year. And no sites have been bought en bloc since the start of the year.

Analysts said that the owners of the 72-unit Dragon Mansion could have chosen to market their property now to ride on the current upswing in sentiment in the residential market.

‘As the outlook for the residential property market improves, land values will rise and sellers might find it viable to sell collectively to get a premium for their properties,’ said Karamjit Singh, managing director of Credo Real Estate.

If the sale of Dragon Mansion goes through, it will be the first property to be sold en bloc in 2009. However, market watchers said that the asking price is steep.

For comparison, said one market watcher, one can look at the June 2007 collective sale of nearby Oakswood Heights on Spottiswoode Park Road at the peak of the property boom. Then, UOL paid $132 million for the 63,700-sq-ft freehold site, which worked out to $740 per psf ppr.

Dragon Mansion has a land area of 41,874 sq ft and is designated for residential use with a plot ratio of 2.8. The new development could potentially yield a maximum gross floor area of 117,000 sq ft, which translates to an estimated 120 units of 1,000 sq ft each, said CKS Property Consultants, which is marketing the property.

Consent has been obtained from more than 80 per cent of the owners to proceed with the sale. The asking price is based on the ‘limited availability of such freehold residential land near the central business district’.

More projects could be launched for collective sale in the rest of the year, analysts said.

Credo’s Mr Singh said that owners of some projects are now checking to see if it is the right time to launch a collective sale: ‘They don’t want to start too early. They are hoping to time it right.’

En bloc transactions may return in a significant fashion when the unsold supply pipeline falls, said Credit Suisse in a June 19 note. This comes about as developers deplete their existing land banks and need to replenish them.

‘On a current run rate of 1,200 developer units sold per month, land bank replenishment may happen in the next three months,’ said Credit Suisse property analyst Tricia Song.

In 2006 and 2007, demolitions created an artificial vacuum in supply due to ‘en bloc fever’, resulting in a steep hike in rents and prices amid a population boom. In addition, owners of older properties with higher redevelopment density ratios get more on a per unit space basis, creating a wealth effect in the property market.

However, the caveat emptor this time could be oversupply of prime housing from previous years. Nevertheless, the trend bodes well for land prices and real estate owners, Ms Song added.

Source : Business Times – 15 Jul 2009

Tender for collective sale of Dragon Mansion launched

The tender for the collective sale of Dragon Mansion has been launched, the first such sale this year.

The property is located at 18 Spottiswoode Park Road.

In a statement, CKS Property Consultants said it has obtained consent from more than 80 per cent of the owners to proceed with the sale.

The collective sale is expected to achieve in excess of S$120 million or S$1,020 per square foot per plot ratio. This includes the development charge of about S$400,000.

The redevelopment site has a land area of about 42,000 square feet and it is designated for residential use with a plot ratio of 2.8.

CKS Property Consultants said the new development could potentially build up to 36 storeys, accommodating some 120 units of 1,000-square foot apartments.

The tender will close on August 11 at 3pm.

Source : Channel NewsAsia – 14 Jul 2009

Not collectively speaking

IN HIS Monday Blues column, Today Editor-At-Large Conrad Raj opined that it is “Time to revamp the Strata Titles (ST) Boards” (June 22) .

In fact, it is not merely the composition of the ST Boards, but the present ST rules as well that need to be looked into, and a thorough “revamp” made in the larger interests of subsidiary proprietors (SP), as unit owners in private estates are described.

A report in The Business Times in March 2008 reported that “The Ministry of Law is understood to be planning a review soon (sic) of the revised en bloc legislation, which took effect on Oct 4 (2007)”, with a Ministry of Law spokeswoman on record as saying: “Since the amended Land Titles (Strata) Act came into effect, we have received feedback mainly from affected owners to make the collective sale process even more rigorous by introducing more safeguards”.

That was well over a year ago. All that has happened since is that there have been several legal suits involving collective sales, with some startling decisions. There is no escaping the stark reality that the threat of an en bloc sale will always exist whether the property market is robust or moribund as long as a collective sale will fetch more than scattered sales of individual units.

It is only fair to all who own and live in private estates that the Government makes known speedily whether the changes, once proposed, are likely to be reviewed.

For the huge majority, the purchase of a property is without question the biggest capital investment they make in their lifetime, and typically they spend most of their working lives to pay off for their homes. Seen in this light, and against the Government’s once-avowed objective of promoting self-houseownership, and its natural extension to sinking roots in Singapore, it bucks logic or even a sense of justice that many or even just some of them should be compelled to move out of such homes against their will because of an en bloc sale, even if some capital profit is realised in the process.

There are plenty of areas where the present rules can, and in fact, urgently need to, be changed.

The rate of success of collective sales varies depending on the age of the estate. In public-listed companies, where the individual stakes can be quite minimal and the emotional impact much less in comparison, the rule is that as long as 10 per cent of the capital still remains in the hands of minority shareholders, they cannot be compulsorily bought out.

Legislation should also be introduced that SPs who have an alternative property to which they can move in the event of a successful en bloc sale should be automatically disbarred from voting in favour of such sale, as they are in the privileged position vis-a-vis SPs who own just the property they stay in.

I have heard of some who buy a property with the intention of starting an en bloc sale, in the hope of benefiting from the resultant increased price at which it would most probably be sold.

SPs themselves and/or those who have close relatives in the property business should also similarly be disbarred from participating, as there is bound to be the suspicion of a conflict of interest, or even collusion.

One thing is certain when en bloc sales come into the picture: The harmony of neighbourly living is disrupted, and probably lost for ever, sometimes leading to acrimony and unsocial, even criminal, acts of vandalism as was widely reported in the media. If the changes in rules made in October 2007 have according to the Ministry of Law led to complaints by affected owners, it is probably time to scrap those rules altogether, and leave the purchase and sale process to individuals, and a collective sale to proceed only where there is total unanimity among owners, as is the case in landed property.

A Singaporean’s home should remain his castle, in which he can lock himself securely against en bloc raiders bent on ejecting families for their own purely selfish ends. It is imperative that Govenment moves swiftly towards the changes they intended to make early last year.

Narayana Narayana

Source : Today – 26 Jun 2009

Time to revamp the Strata Titles Boards

IT APPEARS that there is an urgent need to review the role of the Strata Titles Boards (STB), especially regarding collective or en bloc property sales in the light of recent court judgments that saw the board come under criticism.

The most recent involved the decision by the Court of Appeal to call off the sale of Horizon Towers after a tussle between various owners over the condominium’s sale to a group led by listed Hotel Properties Ltd (HPL).

The STB was criticised for a number of lapses, including its failure to ask whether the sale price of $500 million was the best “reasonably obtainable”. It was also rapped for concluding that the original sales committee had “acted in good faith” in selling the property to HPL just because the committee had received and relied on advice from its lawyers.

The Court of Appeal also felt that the STB had erred in refusing to call one of the owners to testify and by allowing the sales committee to assert “legal privilege” in not divulging the legal advice it had received. The STB was also criticised for ignoring possible conflicts of interest in the sales committee members’ purchase of additional units.

In another case involving the sale of Regent Garden in West Coast to Allgreen Properties, the STB received flak from the Court of Appeal for calling for hearings and then refusing to approve the sale while the issue was before the High Court.

The Court of Appeal felt that if the STB had deferred the matter until the court hearing, it would not only have saved time and costs but would have also avoided the STB’s decision being inconsistent with that of the High Court, which allowed the sale to go through. The Court of Appeal also said that the STB’s refusal to approve the sale to Allgreen was “questionable in law”.

It also affirmed that the Land Strata Titles Act was there to protect minorities, and not to protect majorities from their own “improvident” bargain when the majority at Regent Garden wanted to renege on their sales agreement.

While the STB system was set up some decades ago as more and more people took to high-rise living with ownership of property based on strata titles, many in the property business feel that many of the board’s members are not adequately qualified to deal with the complex legal issues surrounding en bloc sales.

This is despite the fact that under the law governing the STB, the president and his two deputies must be legally qualified persons. At present, the board is presided over by lawyer Tan Lian Ker and assisted by senior lecturer Philip Chan Chuen Fye and lawyer Alfonso Ang Cheng Ann.

There is the registrar, who is there to help with queries on how to submit an application but cannot provide legal advice on the merits of a case.

Then there are about 30 other panel members who include accountants, engineers, lawyers, property consultants and surveyors. Each time an application is made, a Strata Titles Board is constituted, consisting of the president or a deputy with two or four other persons from the panel.

Apart from the registrar, all other members of the STB are employed elsewhere. In a sector where time is of the essence and millions can be gained or lost due to the volatility of the property market, their availability to sit at a board hearing becomes an issue. It’s also not fair to ask them to give up their valuable time to do “national service”, albeit with some compensation thrown in, but which most would consider a pittance given their standing.

So, perhaps it’s time to have en bloc cases heard by the arbitration courts or by a specially constituted court with the expertise on property matters to avoid long and costly battles as in the case of Horizon Towers. With the High Court having a smaller load these days as a result of former Chief Justice Yong Pung How’s efforts to speed up the processing of cases, there ought to be no undue strain on the courts.

The present lull in en bloc sales should provide the ideal opportunity to revamp the STB before the next round of collective sales takes off when property prices start to soar once again.

Source : Today – 22 Jun 2009

S’pore could see first en bloc sale in a year by year-end

Singapore has seen a drought of en bloc sales lasting more than a year. But analysts said that could change by the end of this year.

They believe that with developers experiencing lower inventories, and government land sales still depressed, en bloc sales could present a more attractive option.

More than 5,500 private homes have been sold in the primary market this year – already more than the total amount sold in 2008.

Should the momentum persist, analysts project that more than 10,000 units will be sold this year, compared to the market peak of 14,811 units sold in 2007.

Analysts said this has helped draw down developers’ inventories.

Christina Sim, director, Investment, Cushman & Wakefield, said: “Once I think a developer sells more than 50 per cent of the development, they are basically on the home stretch already. So whatever they make on the rest of the units is basically profits. I think in terms of this, their cash flow position is a lot better.”

Karamjit Singh, managing director, Credo Real Estate, said: “Fundamentally, en blocs take place when the market is on an uptrend, when there is enough confidence in the market, and developers wish to step up their acquisitions or redevelopment sites.

“At this stage, the market seems to be turning its corner. There seems to be a resurgence, or confidence back in the market. Quite a few developers have begun to clear substantial inventories to a point where they are very confident in the market tomorrow and day after. And (they) are beginning to buy land today, or at least making enquiries about what is available to buy.”

Site sales were also at a significantly low level last year.

Mr Singh said: “Developers refrain from buying any redevelopment sites, whether from government, en bloc, private market. That market began to move early this year with few developers acquiring from one another and from individual sellers. That momentum is slowly gaining and it is quite strong at this stage.”

And supply isn’t as forthcoming as before.

Mr Singh said: “This is likely to lead to price rises in redevelopment sites, which is the basic raw material for developer to buy so as to be able to do business. As land prices rise, it would lead to a situation where en blocs become viable once again. We are helping quite a number of our en bloc clients re-evaluate the potential of their projects. And we believe that towards the end of this year or early next year, quite a number will materialise once again.”

So developers are likely to look to collective sale sites. Credo is handling about five developments which are restarting, or planning a collective sale. It is also currently marketing some developments, including Laguna Park. Cushman & Wakefield is currently marketing Meyer Place.

Valuations for that project were done during the peak in 2007. But it has since come down almost 30 per cent.

Ms Sim said: “Land value for Meyer Place was actually set at the peak in 2007, and those days, East Coast high-end properties were going at about S$1,800 per square foot up to S$2,200 per square foot. So those were the prices that were set. However, the good thing is that we are maybe about 30 or 20 per cent short of this level. Hopefully, the market will recover by the third, fourth quarter.”

She also said: “I expect they would have to scale down, and a few whom I have spoken to have already said that in the event that a lesser offer comes in, lesser than what the reserve price was, there is always a good chance that (they) can call for an AGM and get the 80 per cent consensus to sign again, and agree to sell at a lower price than the reserve price.”

Owners were previously looking for a premium of about 50 per cent. But Cushman & Wakefield said 30 per cent now will be a very good deal.

Overall, analysts said projects that stand a higher chance of being sold en bloc are smaller ones, in specific locations.

Mr Singh said: “They seem to favour suburban and mid market. Prime, I am sure quite a number of them will be interested in very high-end.”

Ms Sim said: “Well located smaller plots in good residential areas, Meyer Road, Bukit Timah. They will all still have that kind of demand. I think the plots that are maybe below the S$100 million mark, they are still quite affordable by small, medium-sized developers.”

She is hoping for at least one en bloc sale this year, to get the ball rolling.

Credo, on the other hand, is more optimistic and expects more than 10 sales by year-end.

But not all agree with this view. Real estate company ERA Asia Pacific said developers should have banked enough land over the past three years.

Eugene Lim, associate director, ERA Asia Pacific, said: “A lot have not been launched yet. What’s launched now are those bought even earlier. We expect the en bloc scene to probably be low key for now.”

Grace Ng, deputy managing director, Agency and Business Services, Colliers International, said; “They are watching the market carefully. A lot of developers have been keeping en bloc sites and renting properties to wait for market to recover. I think they will tread grounds carefully.”

Today, the gestation period from planning to actual marketing of the site takes at least six months, and can stretch to two years.

That is because of new legislation to ensure en bloc sales processes are conducted transparently.

Previously, getting to the marketing phase could take as little as three months.

A resident in Laguna Park said they were looking for a premium of up to 80 per cent when the idea was mooted in the second half of 2007.

And while she is willing to consider a slightly lower price, she added that a sale is not necessarily urgent.

She said: “If it does not happen, I suppose we will wait for another opportunity. Because you know you can get the 80 per cent, there will always be a second time.”

Source : Channel NewsAsia – 16 Jun 2009

Neptune Court privatisation surprise

TWO YEARS ago, when Neptune Court residents thought of privatising their estate, they faced a daunting $144 million hurdle.

That was the estimate for what they would have to pay the Ministry of Finance (MOF), which owns the land.

That price – believed to be one of the highest privatisation fees – meant that each apartment owner would have to fork out more than $190,000 for the deal.

Privatisation would not only let them sell en bloc but would enhance the value of each unit as well.

But the plan was derailed.

Now the Marine Parade Road estate is again trying for privatisation.

And the new quote from the Finance Ministry? About $40 million – 70 per cent less than what it was about a year and a half ago.

Like many Neptune Court residents, retiree Shamsuddin Akib, 76, is stumped by the disparity between the two figures.

At that price, each home owner would have to pay only about $50,000 – not much more than a fourth of what they would have had to pay in November 2007.

He said: ‘It’s absurd that the price difference is so big. How did they (the Ministry) value the land in both cases? And how can the price drop be so big?’

The retiree has been living at the 99-year leasehold estate with his family since 1975. His wife was a civil servant, and they bought the 1,600 sq ft unit for about $55,000 then.

Recent URA transaction figures suggest the unit is now worth about $800,000.

Mr Shamsuddin is undecided about voting for the privatisation. ‘I’ve lived here for so long. I like it and it doesn’t make sense for me to pay for privatisation if I am not going to sell it,’ he said.

Will retirees sell?

At least 75 per cent of the owners must agree to the privatisation. There are 752 units in the estate which, at 780,000 sq ft, is about the size of 15 football fields.

Another estate nearby – Lagoon View – is also thinking of privatisation.

The conversion of these estates to strata-titled ones (meaning owners hold the title to their units and the common property) would clear the way for a potential collective sale.

The privatisation fee covers the cost of the common property being transferred to the owners, legal costs, survey costs and other processing fees.

Another Neptune Court resident, who declined to be named, said a committee was set up in March during the annual general meeting to look into the privatisation.

The $40m privatisation fee was mentioned during that meeting and a circular was sent to residents last month saying the Ministry is open to selling the land and common areas to the residents at that price.

He said: ‘The current estimated amount is definitely more reasonable than the $190,000 then. But how it suddenly dropped to this level is something surprising for the residents.

‘Many residents here are retirees who have no plans to sell their property either individually or via an en bloc (sale). So, what’s the point of privatisation then?’

The Neptune Court Owners’ Association (NCOA) declined to comment on the privatisation issue.

When contacted, the Ministry would only say that market conditions have changed from two years ago and the NCOA has been informed of a more recent indicative value for the land and common areas.

Lagoon View and Normanton Park owners associations have also been told of indicative values. The Ministry did not elaborate on these values.

It said that when Neptune Court was first told of the indicative value of the land and common areas in 2007, a survey was done to get detailed information about the estate.

‘In general, when a significant majority of owners in any of these estates indicate that they wish to purchase the land and common areas in their estates, MOF will be prepared to sell them to the owners collectively, at fair market value,’ it said.

HSR Property Group executive director Eric Cheng said the drop in privatisation fees may seem steep, but one has to consider current market conditions and sentiments.

The property market has cooled considerably since the en bloc fever two years ago. Private property prices in that area (Marine Parade) have dropped by up to 35 per cent since then, he explained.

‘The Government is doing the right thing. If the privatisation fee is too high, the residents won’t pay for it and there’s no chance of an en bloc (sale),’ he said.

‘But with privatisation, developers are more inclined to buy the estate and redevelop that piece of land to maximise the plot ratio. In this way, the usage of the land is intensified.’

Source : The New Paper – 8 Jun 2009

Regent Garden enbloc deal: majority owners lose appeal

THE Court of Appeal yesterday dismissed an appeal by the majority owners of Regent Garden who oppose a $34 million collective sale deal with Allgreen Properties.

The appeal was lodged on May 15, 2008, by 23 of 25 majority owners of the 31-unit project, who were unhappy that Allgreen made extra payments totalling $2 million to six minority owners who initially opposed the collective sale.

The appeal was lodged after Allgreen obtained an order from the High Court on April 16, 2008, compelling the majority owners to complete the sale and purchase of Regent Garden.

Four months earlier in January 2008, the Strata Titles Board rejected the sale on the grounds that the valuation was too low and the deal was not done in good faith.

In its judgement, the Court of Appeal dismissed the appeal of the majority owners, saying that there was nothing in the agreement between buyer and seller, or the law, to prohibit Allgreen making additional payments to the minority owners.

The Court of Appeal also reiterated that the Land Titles Strata Act exists to protect minority owners and not to protect majority owners from their own ‘improvident’ bargain.

Allgreen, represented by Davinder Singh of Drew and Napier, also relied on an affidavit of Knight Frank managing director Tan Tiong Cheng which said: ‘It is also my experience that it is not uncommon for the developer to contribute to the payment of the premium to the minority owners to procure their consent to the collective sale.’

On whether the collective sale was done in good faith, the Court of Appeal said: ‘A purchaser does not owe any duty of care, much less duty of good faith, to a vendor of property in relation to the price of the property. The general principle is caveat emptor.’

In its concluding observations, the court said collective sales committees that do not want to find themselves in a similar predicament vis-a-vis incentive payments can easily make provision for similar contingencies by providing for them in the sale-and-purchase agreement.

Source : Business Times – 30 May 2009