En-bloc system needs relook, as Bayshore shows

http://www.straitstimes.com/ST%2BFor...ry_233983.html

May 5, 2008

En-bloc system needs relook, as Bayshore shows


IF THE Government still thinks the current laws under the Building Maintenance and Strata Management Act and the Land Titles (Strata) Act (Amendment) are sufficient to regulate the issues of collective property sales, this tale of two condos may provide food for thought, especially as the Government has invited feedback on these laws.

On April 27, Bayshore Park and Mandarin Gardens both held annual general meetings. These two estates, with more than 1,000 units each, sit on 1 million sq ft of land next to the sea.

Both have got a collective sale initiative off the ground, with sale committees elected. With the support of pro-sale residents, voting powers are then used to control the rest of the estate, even though the votes represent only a minority of residents. Let me illustrate:

In Bayshore Park, the pro-sale group outvoted other residents on crucial issues and in selection of council members. Averaging 60 per cent of votes cast at the AGM, this roughly 20 per cent of residents (as only 30 per cent of owners were represented at the AGM) voted down a proposed increase in maintenance charges in line with current inflation, voted for a lower increase in the sinking fund, voted down crucial replacement of copper pipes in the common corridors and voted down any exploration of corridor upgrading. In addition, they voted for a reduction in council seats to nine, making sure four sale committee members were voted into the council, and ensured that four of the five previous council members retained had exhibited pro-sale inclinations. They made sure two previous council members who did not favour sale were not re-elected. I was one of the two.

At Mandarin Gardens, in a similar vein, the pro-sale camp mustered enough proxy forms to control 65 per cent of the votes in the AGM. They defeated a motion to reduce water ponding of walkways and lift lobbies to improve safety, and passed a resolution to reduce management council (MC) expenditure limits from $300,000 to $50,000 making it almost impossible for the MC to function. Consequently, the incumbent council refused to stand for re-election. Even more devastating, the pro-sale camp fielded no candidates for council. Hence, no council was elected.

The law was not broken at either AGM. However, many of us affected are sure the law was not designed to produce such outcomes.

Augustine Cheah

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Originally Posted by mr funny

http://www.straitstimes.com/ST%2BFor...ry_233983.html

May 5, 2008

En-bloc system needs relook, as Bayshore shows


IF THE Government still thinks the current laws under the Building Maintenance and Strata Management Act and the Land Titles (Strata) Act (Amendment) are sufficient to regulate the issues of collective property sales, this tale of two condos may provide food for thought, especially as the Government has invited feedback on these laws.

On April 27, Bayshore Park and Mandarin Gardens both held annual general meetings. These two estates, with more than 1,000 units each, sit on 1 million sq ft of land next to the sea.

Both have got a collective sale initiative off the ground, with sale committees elected. With the support of pro-sale residents, voting powers are then used to control the rest of the estate, even though the votes represent only a minority of residents. Let me illustrate:

In Bayshore Park, the pro-sale group outvoted other residents on crucial issues and in selection of council members. Averaging 60 per cent of votes cast at the AGM, this roughly 20 per cent of residents (as only 30 per cent of owners were represented at the AGM) voted down a proposed increase in maintenance charges in line with current inflation, voted for a lower increase in the sinking fund, voted down crucial replacement of copper pipes in the common corridors and voted down any exploration of corridor upgrading. In addition, they voted for a reduction in council seats to nine, making sure four sale committee members were voted into the council, and ensured that four of the five previous council members retained had exhibited pro-sale inclinations. They made sure two previous council members who did not favour sale were not re-elected. I was one of the two.

At Mandarin Gardens, in a similar vein, the pro-sale camp mustered enough proxy forms to control 65 per cent of the votes in the AGM. They defeated a motion to reduce water ponding of walkways and lift lobbies to improve safety, and passed a resolution to reduce management council (MC) expenditure limits from $300,000 to $50,000 making it almost impossible for the MC to function. Consequently, the incumbent council refused to stand for re-election. Even more devastating, the pro-sale camp fielded no candidates for council. Hence, no council was elected.

The law was not broken at either AGM. However, many of us affected are sure the law was not designed to produce such outcomes.

Augustine Cheah

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All doors must have key holes: find it and fit the right key, you go through.

Similarly, all laws must have loopholes: find it, and you circumvent it!

Yes, the en blocs laws were obsolete the day before it was passed by Parliament.

Suggest the following amendments (reasons given):

1. Sale Committee cannot be Council Members, to avoid conflict of interests as realised by Mandarin Gardens and Bayshore.

2. SC must be owners residing in the estate unless it is a development wholly owned by real estate companies for investment. Again a conflict of interest between resident owners and investors.

3. Time bar. SC members must be owners of at least 3 years standing to avoid the situation of "condo raiders". As a matter of fact, the Automobile Association of Singapore (AAS)'s constitution went even further: you can't even vote someone into office if you are a member with less than 3 years' standing let alone seeking office.

4. Strictly only one proxy (max) per attendee, if the attendee is an owner himself and not a proxy for others. In order words, if I am an owner, I am allowed to vote for my neighbour, but if I am not an owner, I can only vote for one friend. I believe this proposal is being considered by the Building & Construction Authority because it was tabled in 2003 during the amendment of the LTSA.

5. All en bloc sales must be approved by the STB regardless of whether 100% has been achieved to ensure that collusion cannot take place (i.e. the buying out of minority owners). All Sale & Purchase Agreements must be subjected to statute (the LTSA) and not common law contracts. And STB must ensure that the Sale Price must not be lower than the valuation price as at the date of the tender to avoid collusion.

My other proposal, that all en bloc sales must be by way of tender, no expression of interest (and undertable negotiation) has been taken care off during the recent amendment.

This chaos that is happenning with the En-bloc scheme is due to a fundamental conflict in the treatment of a house. Is it an investment or a home? Is the house to be taken as a product to be sold at the highest price or is it a place to build a family and community. The problem is that many people believe that they can have both but as life has taught many people, going after money and a good family do not mix well. To resolve this conflict, the government must decide whether a house is a product or a home and than build rules around it. Management Council is for a home and Sales Committee is for a product, you cannot combine both without conflict.

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Originally Posted by Factual

This chaos that is happenning with the En-bloc scheme is due to a fundamental conflict in the treatment of a house. Is it an investment or a home? Is the house to be taken as a product to be sold at the highest price or is it a place to build a family and community. The problem is that many people believe that they can have both but as life has taught many people, going after money and a good family do not mix well. To resolve this conflict, the government must decide whether a house is a product or a home and than build rules around it. Management Council is for a home and Sales Committee is for a product, you cannot combine both without conflict.

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Good point, but can you suggest some rules that can go "around it" to resolve the conflict? Thanks.

this is getting really ugly.

haven't even reach the tender stages, there may not even be bids of substantial amounts considering how big these 2 estates are.

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Originally Posted by kazu

this is getting really ugly.

haven't even reach the tender stages, there may not even be bids of substantial amounts considering how big these 2 estates are.

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Given the size of these two mega estates, have they even reach the 80% threshold yet?

Yes, things are already ugly and will be monstrous and because of their size, only a couple of developers can put in a bid and that will lead to more finger pointing and WW3 scenarios. May God Bless the owners of these two estates.