May 1, 2007
Some Horizon Towers owners in bid to reverse en bloc sale
By Fiona Chan
A GROUP of unhappy home owners is trying to stop the collective sale of their condominium on Leonie Hill going through - three months after a developer agreed to buy it for $500 million.
Their gripe: the condominium next door is getting a lot more, thanks to fast-rising prices in the area.
Property prices have soared so much - especially in the Orchard Road area - that these owners of Horizon Towers feel shortchanged by their sale in January.
They have banded together to send a letter to fellow residents, urging those who have signed the collective sale agreement to back out of it.
But lawyers warn that ringleaders of any push to back out face being sued for inducing breach of contract.
Almost 84 per cent of owners had earlier signed the agreement to sell Horizon Towers to Hotel Properties and two foreign funds in January for $500 million.
That meets the legal requirement of more than 80 per cent of owners for properties more than 10 years old. It means each owner of the condo's 199 units will get about $2.3 million, with the 11 penthouse dwellers reaping up to $6.28 million.
But this is not enough for some owners, who sent out a letter dated April 25 saying the 'en bloc price no longer reflects the true value of Horizon Towers'.
The Straits Times obtained a copy of the letter, which added: 'If enough like-minded owners decide to rescind the (agreement) and the majority falls below 80 per cent, the application to STB (Strata Titles Board) can be repealed.'
The letter was not signed. Four apartment numbers were cited, but The Straits Times was unable to contact their owners to confirm if they had written the letter. It is also not clear if the letter writers themselves had signed the sale agreement.
The letter highlighted the fact that neighbouring Grangeford Apartments - a property five years older - is now going en bloc for much more than Horizon Towers achieved.
Grangeford owners are asking $660 million, or $2,016 per sq ft (psf) of total floor area - more than double the $850 psf of total floor area achieved by Horizon Towers.
Home prices in the Orchard Road area have risen 10 per cent since January, but asking prices for collective sales have soared to new heights as both sellers and developers bet on property prices rising further.
In the letter, the unhappy owners also said they are prepared to hire a lawyer to fight their case.
But law firm Drew & Napier, which is handling the collective sale of Horizon Towers, said these owners have no legal grounds to back out of the sale. On Friday, the firm issued its own letter to residents in response, saying the collective sale agreement is legally binding and that rescinding it would constitute a breach of contract.
Mr Jimmy Yim, senior counsel at Drew & Napier, warned of 'very serious consequences' for owners backing out of their agreement.
'In my view, they are treading on very dangerous ground,' he said. 'Whether an individual or a collective sale agreement, once it is signed, it has binding legal obligations.'
Mr Yim added that encouraging others to rescind the agreement would be 'inducing breach of contract'.
This could lead to the 'instigators' being sued for damages equal to the developer's and other home owners' lost profits, he said.
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