They don't even own the land they're fighting over

May 20, 2007

NEPTUNE COURT EN BLOC SALE

They don't even own the land they're fighting over

# Condo land owned by Ministry of Finance
# Residents don't know how much land costs
# There are two competing factions
# Owners have history of locking horns

Difference in opnions over how to proceed on proposed $1b collective deal has split residents

By Tan Dawn Wei


BURLY bodyguards; threats of lawsuits and police reports; insults flying back and forth across the battle lines. Yes, it is just another collective sale in the works.

But this one has an added twist: Warring residents at Neptune Court do not even own the land they are fighting over.

For the past 32 years, 752 home owners at the leafy estate at Marine Parade have been leasing the land from the Ministry of Finance.

But now that a collective sale for the 99-year leasehold property has been mooted, owners in the nine apartment blocks have to deal with the business of privatisation on top of all the other issues that can turn the en bloc process into a suburban War of the Roses.

The Neptune saga has it all: Owners who want to stay, others who want out, some who want a better offer and others who do not like the way their elected sale committee works. It all adds up to a confused and angry estate.

Once chummy neighbours have become divided, with name-calling, talk of lawsuits and police reports, and even security officers have come into the picture.

When lawyer Phang Sin Kat of Phang & Co gives presentations at the Neptune Court clubhouse to residents, he has at least three hired bodies watching over him.

The 'crowd control' personnel are there 'to make sure that proceedings go smoothly', he said.

Dr Phang and property consultant Chesterton International were recommended by an elected collective sale committee to kick-start privatisation and the sale of the estate.

Last weekend, they started offering owners a sale agreement that promises a reserve price of $1.37 million or $1.67 million, depending on the unit size.

That represents a big gain. The highest price fetched in a sale this year was $770,000 in March. Those who bought a unit when the estate was built 32 years ago paid just $50,000. If the required 80 per cent say yes, the sale will exceed $1 billion, making it one of the biggest collective deals ever.

But those resisting want better offers, to hear more presentations from different real estate agencies, or just someone to clear up their confusion over the land issue.

'People just want a comparison of prices,' said 68-year-old retired resident P.L. Yap, who has lived in Neptune Court for 15 years.

'Many of us just want to hear more presentations so people can make up their own minds rather than quarrel among themselves.'

A 40-year-old housewife, who has lived there for 14 years, said: 'What we need is more information. People are worried that there could be hidden costs like high privatisation fees.'

The most bitter split has centred on the collective sale committee. Things were still very neighbourly when residents elected the 11-man body headed by life sciences consultant Vijay Bhandari, 42, last May.

The committee invited real estate agencies to make presentations. Four did so, including law firm Phang & Co, which the committee picked.

But some residents felt the sale agreement had been foisted on them without other options being put on the table.

Dr Bhandari maintained the committee performed its duties with 'due diligence' before it recommended Phang & Co.

But he and seven other members of the original committee resigned and formed their own group two weeks ago, after the Neptune Court Owners' Association management committee called for fresh proposals.

Two agencies have been lined up to make presentations to residents, but that has not stopped Dr Bhandari's camp from courting signatures.

Those who have signed cannot back out if another offer comes along but a sale of the development en bloc can materialise only if 80 per cent of an estate - 600 owners in this case - back the deal.

But some argue that without asking the Ministry of Finance what it wants for the land, the committee is putting the cart before the horse.

'Until we know the value of the land, the privatisation process cannot move,' said Mr Philip Williams, 54, a managing director of an oil and gas inspection firm, who has lived in Neptune Court for 16 years.

He is one of the two members left from the original sale committee who oppose Dr Bhandari's breakaway faction. A third member stepped down for personal reasons.

Mr Williams said an official told him that the ministry 'wants market rates for the land', which spans 780,000 sq ft.

Chesterton International said buying rights to the land will cost $31,000 to $36,000 per household, plus an allowance of 15 per cent, but Mr Williams thinks that is far too low.

Based on past privatisation exercises, Chesterton believes it has done its sums right. But if the actual amounts exceed these figures, a sale is off.

Industry insiders said the Neptune Court site is hot property as it faces the sea. Developers could build twice as many units but the height will likely be capped at the current 23 storeys.

Those hoping for harmony to prevail at Neptune Court should know that the owners have a history of locking horns. In 1993, owners split over plans to build sheltered carparks and in 1998, a group of 26 delayed a lift upgrading project after objecting to the way approval was sought.

But some want out and believe now is the time to sell.

'The buildings are old and the scheme is fantastic because it allows you to swop units,' said one owner, who is deciding between an exchange and a cash payout.

If the collective sale succeeds, owners can opt to exchange their old units for new ones with full condominium facilities under the contract offered by Dr Phang and Chesterton.

But even if residents cannot agree, it is still a lesson worth learning, said one property analyst.

'By all means, go through the motions, but if a collectivesale doesn't succeed, never mind. There will always be another cycle.'

But in the current cycle, the wheels have started to come off, with tangled tales like Neptune Court becoming all too common.

One third of the more than 100 proposed collective deals last year failed. Others turned into soap operas featuring residential rancour with some owners going to court or refusing to move while others launched a smear campaign against their own estate to scare owners into selling.

As one property pundit said: 'In all collective sales, personalities are involved. And money makes people do all sorts of things. You can get carried away.'

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