Regent off the hook for now

STB stops Allgreen’s purchase of condo for lack of ‘good faith’

AN APPLICATION for the en bloc sale of Regent Garden has been dismissed by the Strata Titles Board (STB) – much to the delight of the majority owners.

A group of 25 owners at the 31-unit condominium had earlier sued the buyers, Allgreen Properties, for allegedly breaching the sale and purchase agreement by grossly undervaluing the property at West Coast Road. Allgreen has denied the allegations.

While the High Court has yet to hold a hearing on the case, the STB yesterday decided that the $34-million sale was not conducted in “good faith” because the basis for the valuation of the property was wrong.

The majority owners argued that developer Allgreen had overstated the development charge, or DC, thus depressing the sale price.

The DC was initially stated to be $7.6 million, but worked out to be just over $950,800. The STB heard that the sale committee had discovered the shortfall from a letter dated July 23 last year, sent from the Urban Redevelopment Authority to Allgreen’s architects in their proposed redevelopment project.

In explaining the STB’s decision, which also took into account the views of two valuers who had performed valuations of the condominium, deputy president Alfonso Ang said the first calculation of the DC “gave rise to incorrect market value”, thus resulting in “the sale price of $34 million that was well below the market value”.

When the STB announced its decision yesterday, owners who were present were all smiles and congratulated one another.

However, this is just round one of what is to come. There are still two High Court orders on whether the contractual agreement signed between the condominium’s sale committee and Allgreen is valid.

The developer said in a statement it was “surprised” at the STB’s decision to proceed with the hearing despite the pending Court proceedings initiated by both parties.

“The Board’s decision will have no bearing on Allgreen’s case in the High Court, where Allgreen will continue to ask for an order that the majority owners complete the sale and purchase of Regent Garden in accordance with the terms of the sale and purchase agreement,” it said.

Allgreen said that before the agreement was signed, it had offered the option of having a floating sale price that would be subject to the DC. The sale committee, however, rejected this option and decided to fix the sale price at $34 million in order to guarantee itself certainty of sale, the developer added.

Source : Today – 31 Jan 2008

Owners sue Regent en bloc buyers

SINGAPORE has seen several ugly en bloc tussles but this is a first. The majority owners, having agreed to sell their condominium, are now suing the buyers.

A group of 25 at the 31-unit Regent Garden is alleging that developer Allgreen Properties has breached the sale and purchase agreement by grossly undervaluing the condominium.

The owners filed a claim last Monday with the High Court to declare that they are no longer bound by the agreement, which saw the condominium sold for $34 million last April.

On Friday, Allgreen struck back. It announced that it will “vigorously contest this action and the claims and allegations made by the majority vendors”, and has applied for a court order to force the majority owners to complete the transaction.

According to court documents obtained by Today, the dispute centres on two issues. The majority owners, represented by Senior Counsel Molly Lim, allege that Allgreen had overstated the development charge by more than $6 million, thereby depressing the sale price by that sum.

They also claim the developer gave “disproportionately high” proceeds to the six erstwhile minority owners to secure full consent. The latter have since agreed to the sale and have applied to withdraw their objections, set to be heard Jan 30 by the Strata Titles Board (STB).

Now it is the majority owners who want to be heard by the STB, which an experienced en bloc lawyer, who declined to be named, said puts the STB in an “interesting” position.

The law now gives STB power to hear all objections, but the Regent agreement was signed before the legislative change.

According to Knight Frank managing director Tan Tiong Cheng, he has “never come across a case where the majority owners sought to rely on the fluctuation in the development baseline gross floor area to renege on their agreement with the developer”.

“It is also my experience that it is not uncommon for the developer to contribute to the payment of a premium to minority owners in order to procure their consent to the collective sale,” he said in a court document.

Bernard and Rada Law Corporation associate director M Kumaran, who oversees his firm’s en bloc cases, said the majority owners would have a case if the buyers had misrepresented the development charges.

“This sort of matter has been taken up to court but not in the context of en bloc sales,” he said.

Source : Weekend Today – 19 Jan 2008

Gillman Heights: blamed for doing nothing

Minority owners say NUS should not follow majority in en bloc sale

IT HAS remained silent — and passive — in the protracted saga over the proposed sale of Gillman Heights (picture) to developer CapitaLand for $528 million.

But now, the National University of Singapore (NUS) finds fingers pointing at it after the Strata Titles Board (STB) approved the deal on Friday.

The biggest faction opposed to the deal, comprising 53 of the 76 minority owners, told Today they would appeal against the STB’s decision, and chief among their grouses is the NUS’ role in the en bloc process.

The university owns almost half of the estate’s 608 units, which it rents out to its academic staff.

Said one minority owner: “We are very unhappy and very disappointed with the result. NUS was pressurised by the majority owners to agree to the en bloc sale.”

In its grounds of decision, the STB said that it was “very mindful” that the NUS was the single majority owner.

Throughout the sale, the NUS stuck to its original position that it would not take part in the proceedings other than agreeing to abide by the majority decision of the remaining owners, the STB noted. It also ruled that the majority owners had “acted properly” in dealing with the NUS.

However, even after the ruling, some of the minority owners insisted that the NUS should not have followed the decision to sell, based on a simple majority. Instead, it should only do so when at least 80 per cent of the remaining owners agreed to the sale, they argued.

Today understands that the NUS signed the Collective Sale Agreement in June last year, after some 70 per cent of the remaining owners did so.

The university could not be reached for comment at press time.

But Lee & Lee senior partner Quek Mong Hua, who represented the majority owners, said: “There’s no reason why NUS should not support the en bloc sale when a big majority of the other owners want the deal.”

The STB also had strong words for one of the valuation reports — prepared by a former chief valuer for Overseas Union Bank, Mr Yick Keng Hang — put up by the minority owners. The report revised the value of Gillman Heights from $580 million to $660 million within seven months.

The board, which rejected Mr Yick’s evidence, said in its ruling: “Yick had shown himself to be given to hyperbole. A review of his evidence would show that he was shifty and self-serving whenever it suited him.”

Launched in February last year, the en bloc sale process — which eventually garnered 86.7-per-cent consent — has been dogged by several controversies, including a dispute over the level of consent needed for the sale to go through.

Barring any appeal, the sale committee has three months to complete the deal.

Sale committee chairman Robert Wiener was “relieved” at the decision.

But he added: “Obviously, we would be happier if we could get our money earlier, what with property prices going through the roof.”

Source : Today Weekend – 22 Dec 2007

Enbloc: the neighbours are at it again

DEPENDING on which side you are on, it is a case of try and try again, or deja vu, as some residents will testify.

Condominium en bloc sales have cooled, due in part to the new Land Titles (Strata) Act that came into force in October, but at least two large developments are getting back into the game.

Bayshore Park, on Singapore’s East Coast, is in the process of forming a new sales committee after it had to disband the original one because of the new ruling.

A group of opposing residents had sent a lawyer’s letter to the old committee challenging its constitution and its validity under the amended Act.

Developments at the 21-year-old condominium – which is over 1 million sq ft in size – is keenly watched by marketing agents and developers alike because of its prime sea-front location and vast land area.

Clementi Park, on Singapore’s West, is another condominium that had faced hurdles in its en bloc process, as the first sales committee was disbanded because it did not garner enough support – at least 80 per cent – for a collective sale even after a year.

Like Bayshore, it sits on about 1 million sq ft of land, but unlike the former which is on 99-year-lease, it is on freehold land. Despite its lack of success, another sales committee has been formed.

At both condominiums, the disbanding of previous sales committees gave a brief respite to residents who did not agree with the en bloc sales, but these dissenting voices now find themselves having to rally support against the cause – yet again.

These residents say the renewed efforts are disruptive to their lives and have a dampening effect on votes calling for upgrades to their homes – as some residents may not vote in favour, due to the uncertainty of whether an en bloc will eventually be pushed through.

However, a second attempt at en bloc sales may not be all that negative, said director of head consultancy and research at Chesterton International, Mr Colin Tan.

“The first time an en bloc sale is noted, it would usually catch people by surprise and there would be people who are resistant because they are not in the right frame of mind to sell or they already have invested in it,” he said.

“In a second try, residents are more attuned to the possibility of an en bloc sale and are thus prepared for it. So, they can make a more informed decision.”

But residents who are less than enthusiastic about parting with their homes say that repeated en bloc attempts are just disturbing their peace of mind.

“I think it’s bad news,” said Bayshore Park apartment owner Stephen Seow.

“After looking around Singapore, I can’t find anything suitable. We bought this apartment for the purpose of retirement. We want to stay here, enjoy all the nice facilities, the ambience and the greenery.

“In the new condominiums, there are space constraints. We wouldn’t have the same type of freedom,” he added. 

Source : Today – 21 Dec 2007

The Riverwalk for sale

An iconic redevelopment site at the heart of the CBD has been put up for sale.

Currently known as The Riverwalk, the 82,317-sq ft site is zoned for commercial use.

It has a gross plot ratio of up to 4.9, and has the potential to be redeveloped into an iconic commercial building with a gross floor area of about 403,351 sq ft, subject to approval and payment of development charge and land premium for the topping up of the lease.

Jones Lang LaSalle is the marketing agent for the site.

Source : Channel NewsAsia – 26 Nov 2007

Chancery Court along Dunearn Rd put up for en bloc sale

The Chancery Court residential development along Dunearn Road has been put up for en bloc sale.

CB Richard Ellis said 124 out of the 144 units, representing more than 87 percent of the share value, have signed the Collective Sale Agreement (CSA).

The prime site is located next to Anglo-Chinese School (Barker Road).

Chancery Court sits on 24,074.4 square metres of prime land and is a short walk to Newton MRT Station.

The guide price is S$468 million, which equates to about S$1,614 per square foot per plot ratio.

Under the Master Plan 2003, the plot ratio is 1.4 and the maximum number of storeys is five.

To maximize the plot ratio and top up the lease to a fresh 99 years, developers will have to pay a development charge of S$118 million.

A developer can build about 242 units, assuming an average size of 1,500 sq ft each. The estimated break-even is around S$2,075 per square foot.

The tender exercise closes at 3pm on 5 December 2007.

Source : Channel NewsAsia – 31 Oct 2007

Industry weighs new en bloc rules

Players note changes protect minority owners, improve sales proceedings.

Changes to regulations governing collective property sales — which take effect today — favour the minority owners, said lawyers and property experts at an en bloc property seminar yesterday.

They could get a higher sales price if their objections to the sale are valid, while the provision for a change of mind following the signing of the collective agreement is generous, they said. Lawyer Sim Bock Eng from Wong Partnership said: “This five-day cooling-off period excludes weekends and public holidays, allowing minority owners to review their decision and alleviate any pressure.”

The event comes at a time when the en bloc frenzy shows little sign of easing despite government measures.

Referring to reports of souring relationships, Mr Chan Kok Hong, CKH Strata Management managing director, said: “Director Royston Tan can make a movie from this.”

Ms Sim said the raft of requirements for setting up a sales committee protects minority owners. Before the changes, a one-man committee could be set up; now, at least three owners are needed. And members of the committee have to be elected at a general meeting and must declare any relationships with developers, marketing agent or legal firms that might incur a possible conflict of interest.

The new provisions also improve en bloc proceedings, which typically take 31 months to complete, noted Mr Chan.

Meanwhile, the Law Ministry has advised that ongoing en bloc sales without a majority of owners’ consent — 80-per-cent (for developments 10 years old or older) or 90-per-cent (below 10 years old) — have to comply with the new provisions. Those with the majority consent are exempted.

Source : Today – 4 Oct 2007

Bayshore Park holds EOGM to elect en bloc sales committee

Bayshore Park condominium, a 21-year-old estate with over 1,000 apartments, is exploring the possibility of an en bloc sale.

It took a formal step on Saturday by holding an extraordinary general meeting to elect an en bloc sales committee.

With changes to the Land Titles Strata Act expected to kick in next month, what happens to potential en bloc sale properties that are caught in-between these changes?

After the two-hour meeting, an 11-member en bloc sales committee was confirmed by residents at the development.

But will such processes hold when the amended Act is enforced?

Lee Liat Yeang, Partner, Rodyk & Davidson, says: “I think it is advisable for an estate which is contemplating an en bloc sale to wait till the new legislation is fully enforced before they proceed, because it is necessary for them to understand the intricate processes that the government has prescribed in the new legislation.”

But according the law firm Khatter Wong, the formation of the en bloc sales committee on Saturday by the residents is lawful and will comply with the amended act.

The changes to the act, which are aimed at providing more safeguards and transparency for all owners, will come into effect next month.

And there is a reason why residential properties like Bayshore Park are not waiting until the amended act is enforced.

Mr Lee says: “They are rushing for it. It could be because from a commercial point of view, they’re concerned there could be many other projects in the vicinity who may also be thinking of going for en bloc sale. And perhaps they want to kick-start the process quickly.”

And its newly-formed en bloc sales committee will no doubt be busy getting the necessary 80 percent support it needs for the en bloc sales process to move forward. – CNA/ch

Source : Channel NewsAsia – 29 Sept 2007

Developers to pay higher prices for en bloc sales as new rules kick in

En bloc prices are set to go up when the new rules in the Land Titles Strata Bill kick in next month.

According to the Real Estate Developers’ Association of Singapore (REDAS), this is because property developers will have to pay more as choice sites get harder to come by.

REDAS celebrates what it calls an autumn harvest and for good reason.

The collective sale market is expected to reach a peak this year, according to a report by Knight Frank.

Developers bought S$8.57 billion worth of private residential properties en bloc in the first half of 2007.

This is more than the S$8 billion for whole of 2006.

By September, the figure topped S$10 billion, though sales also started to slow in the third quarter.

Knight Frank attributes this to US housing credit crisis, growing uncertainty in the investment market, higher asking prices, fewer prime sites and developers’ well stocked land bank.

There were 13 deals from July to September, compared to 27 for the second quarter.

There is also the recent changes to rules for collective sales.

Simon Cheong, President, REDAS, says: “Many people are still trying to digest the new en bloc rules, and I think in the process of digesting, definitely I think there will be a pause and because of there are consequences on the new en bloc rules that even the lawyers are trying to understand. But irrespective of this eventually I think it will be the process of the en bloc is a longer process, so as a result it will probably slow down the supply of land.”

And REDAS says it is expecting prices to rise as a result.

Simon Cheong says: “I think almost for sure the en bloc prices will be higher simply because to entice more people to sign up, they would want a higher price. So for us as a developer, we’re already anticipating, it’d be more difficult to get choice land in the near future, and if you get it, it will be at a higher price.”

Mr Cheong is also CEO of SC Global Developments.

With higher replacement cost for land banks, prices of new developments are also expected to go up.

REDAS says it is fairly bullish in its outlook for the property sector in the next year due to the sheer health of the economy, and several factors that are going right for Singapore – the environment, infrastructure and its position as a global city. – CNA/ch

Source : Channel NewsAsia – 25 Sept 2007

Average age of developments in collective sale is 25.9 years

The average age of all developments which applied for collective sale from January 2005 to end-August 2007 was 25.9 years.

This was revealed by Deputy Prime Minister and Law Minister Professor S Jayakumar in a written answer to questions from Nominated Member of Parliament Mr Siew Kum Hong.

Professor Jayakumar said the average percentage of owners who had signed the collective sales agreement at the time of application was 89.2 percent.

He pointed out that about half of these developments received a consent level of 90 percent and above.

But the minister added that the common reasons for objections raised by minority owners to the Strata Titles Boards were that they would suffer financial loss and that the transaction was not done in good faith.

In another update, since 1 January 2005, a total of 3,700 private residential units have been issued Strata Titles Board orders for collective sale.

The orders also grant the purchasers permission to start developing the units.

This is according to National Development Minister Mah Bow Tan, who also gave a written answer.

Just last month, the Ministry of National Development tabled a slew of changes in Parliament to the rules governing en bloc sales to improve transparency and protect owners’ interest.

The Land Titles Strata Amendment Bill is slated to be debated in Parliament this week.

Source : Channel NewsAsia – 17 Sept 2007