Price of condo land in acquisition case comes under debate

[reporter2]

http://www.straitstimes.com/archive/...ebate-20141006

Price of condo land in acquisition case comes under debate

At issue is the reasonable sum to be paid and fair market value

Published on Oct 6, 2014 1:18 AM

By K. C. Vijayan Senior Law Correspondent


WHAT is a fair price for a slice of land in a condominium complex, used for 13 carpark spaces, an electrical substation, trees and drains, has come up for debate in a land acquisition dispute.

Residents of the high-end Thomson 800 condo opposite MacRitchie Reservoir argue that the 600.9 sq m sliver of land acquired by the Government is worth at least $5.8 million. But the Collector of Land Revenue is prepared to pay only about $615,000.

This would work out to about $925.28 per sq m, or $86 per sq ft, for the affected freehold land - a land price unheard of here, residents argue.

The 10m-wide plot was acquired by the Government in 2011, as part of the construction of the North South Expressway Stage 1 from Admiralty Road to Toa Payoh Rise and redevelopment.

At issue in the case before the Appeals Board (Land Acquisition) is what makes for a reasonable sum to be paid and what makes for fair market value.

"We accept the space is lost but the issue is whether a different value can be given to a particular area, which is for a particular use when it was bought as part of a whole (in) the first place," said Thomson 800 resident Steven Sobak, 67, treasurer of the condo's management committee.

The 600.9 sq m plot below the road level adjoining Marymount Road forms 2.1 per cent of the 28,573 sq m of freehold land making up Thomson 800.

Completed in 1999, it is Hong Kong tycoon Li Ka Shing's maiden residential project in Singapore. There are a total of 390 units in a four-storey apartment block and three 20-storey blocks. Facilities include swimming pools, tennis courts and a clubhouse.

The Collector of Land Revenue awarded some $556,000, with an ex gratia payment of $58,380 as compensation in July 2012.

The Appeals Board, comprising Commissioner of Appeals Foo Tuat Yien, a senior district judge; Singapore Institute of Architects president Rita Soh, a Nominated Member of Parliament; and Associate Professor Sing Tien Foo from the department of real estate of the National University of Singapore, held hearings over three days in July.

Valuers from opposing sides had agreed that the market value, based on the residential zoning and plot ratio, was about $11 million but differed on the amount to be discounted and the adjustment factor to be applied to the market value.

Valuers for the authorities argued that the affected land is part of a road and green buffer zone, which meant its use was very limited and incapable of further residential or other redevelopment. This had to be factored to determine the market value.

The sum payable was worked out with the rent paid for a playing field in Upper Thomson Road as a benchmark.

But lawyers from Infinitus Law Corporation, representing Thomson 800 residents, questioned this. They suggested alternative ways with reference to Singapore Land Authority rates for "remnant land", or small plots of land left over after development.

Closing submissions were made last month by both parties to the Board and the outcome is pending.

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[DC33_2008]

This is a tough call. Some years back, my property need a valuation for stamping. My valuer's valuation price is lower than the one engaged by IRAS. I tried to put up a case but lost. Must always remember the chinese character of authority has two mouths compared to us. How to win?

[Kelonguni]

Yeah sometimes I do worry a fair bit about our so-called FH land or FH strata space. If Govt wants it, there is no way that it will be priced above LH99 land price.

[teddybear]

Don't worry, new law has just been passed recently. There will not be such under-payment in future.
In the past, there is so-called "value-add" where govt's infrastructure or whatever will increase your land's value and hence they will deduct that from the compensation they made to property owners, hence you see small compensation like in that quoted case. However, all this has changed with the new law just passed! What that means to you and me? It means from now onwards, our govt will really be democratic and fair and will compensate fairly and no such under-payment will occur with new acquisition. It also means FH land is now really FH !

You may ask "What is deduction for "value-add"?" Well, you can see below for this item:
"Valuers from opposing sides had agreed that the market value, based on the residential zoning and plot ratio, was about $11 million but differed on the amount to be discounted and the adjustment factor to be applied to the market value."

Based on the above, the govt has valued the Freehold land at $1700 psf in Upper Thomson Road area!
Think, will the govt value your 99-years leasehold land with 50 years lease left at $1700 psf in in Upper Thomson Road area?

Yeah sometimes I do worry a fair bit about our so-called FH land or FH strata space. If Govt wants it, there is no way that it will be priced above LH99 land price.

[Kelonguni]

Then what does this paragraph refer to?

"Residents of the high-end Thomson 800 condo opposite MacRitchie Reservoir argue that the 600.9 sq m sliver of land acquired by the Government is worth at least $5.8 million. But the Collector of Land Revenue is prepared to pay only about $615,000.

This would work out to about $925.28 per sq m, or $86 per sq ft, for the affected freehold land - a land price unheard of here, residents argue."

[teddybear]

They do not understand what they are talking about, that is all - one word: "IGNORANT"!

If they want to convince people about their cause, they have to argue on the correct issue and the reasons given by the govt, and not give such misleading statement, no one will take them seriously!

You may want to read what I wrote previously about why the final payout is so little rather than accuse the govt blindly that the govt is really paying $86 psf for the affected freehold land....

To clarify all these issues for those who are not in the know, the situation is like this:

1) Valuers from opposing sides (govt and the owners) had agreed that the market value, based on the residential zoning and plot ratio, was about $11 million. That works out to be $1700 psf in Upper Thomson Road area (which is fair value)!

2) What most people don't know is that there is an old law that says that govt can claim back some money to be compensated because by building some infrastructure through that land, the infrastructure will significantly enhances the value of the land and property owned by those owners. In this case, there is disagreement on both sides what this amount is. Because of this "value-add" discount, that is why the govt side determined that final payout is much less.

3) I believe this "value-add" discount is flawed as well because it does not take into consideration that the govt is forcing people to sell their freehold land (not leasehold land) to them, and hence the owner, in accordance to the law under "freehold" title, have the right not to sell the govt if the compensation is not made at fair market value. If the land is "leasehold" title, then the govt has the right, but not "freehold" title land, according to English law that we inherited as UK's colony.

In fact, the govt has since acknowledged that the significant "value-add" discount is flawed, and has since repelled this law early this year.

Then what does this paragraph refer to?

"Residents of the high-end Thomson 800 condo opposite MacRitchie Reservoir argue that the 600.9 sq m sliver of land acquired by the Government is worth at least $5.8 million. But the Collector of Land Revenue is prepared to pay only about $615,000.

This would work out to about $925.28 per sq m, or $86 per sq ft, for the affected freehold land - a land price unheard of here, residents argue."

Don't worry, new law has just been passed recently. There will not be such under-payment in future.
In the past, there is so-called "value-add" where govt's infrastructure or whatever will increase your land's value and hence they will deduct that from the compensation they made to property owners, hence you see small compensation like in that quoted case. However, all this has changed with the new law just passed! What that means to you and me? It means from now onwards, our govt will really be democratic and fair and will compensate fairly and no such under-payment will occur with new acquisition. It also means FH land is now really FH !

You may ask "What is deduction for "value-add"?" Well, you can see below for this item:
"Valuers from opposing sides had agreed that the market value, based on the residential zoning and plot ratio, was about $11 million but differed on the amount to be discounted and the adjustment factor to be applied to the market value."

Based on the above, the govt has valued the Freehold land at $1700 psf in Upper Thomson Road area!
Think, will the govt value your 99-years leasehold land with 50 years lease left at $1700 psf in in Upper Thomson Road area?

[teddybear]

May be highlighting key points will make it easier to read:

They do not understand what they are talking about, that is all - one word: "IGNORANT"!

If they want to convince people about their cause, they have to argue on the correct issue and the reasons given by the govt, and not give such misleading statement, no one will take them seriously!

You may want to read what I wrote previously about why the final payout is so little rather than accuse the govt blindly that the govt is really paying $86 psf for the affected freehold land....

To clarify all these issues for those who are not in the know, the situation is like this:

1) Valuers from opposing sides (govt and the owners) had agreed that the market value, based on the residential zoning and plot ratio, was about $11 million. That works out to be $1700 psf in Upper Thomson Road area (which is fair value)!

2) What most people don't know is that there is an old law that says that govt can claim back some money to be compensated because by building some infrastructure through that land, the infrastructure will significantly enhances the value of the land and property owned by those owners. In this case, there is disagreement on both sides what this amount is. Because of this "value-add" discount, that is why the govt side determined that final payout is much less.

3) I believe this "value-add" discount is flawed as well because it does not take into consideration that the govt is forcing people to sell their freehold land (not leasehold land) to them, and hence the owner, in accordance to the law under "freehold" title, have the right not to sell the govt if the compensation is not made at fair market value. If the land is "leasehold" title, then the govt has the right, but not "freehold" title land, according to English law that we inherited as UK's colony.

In fact, the govt has since acknowledged that the significant "value-add" discount is flawed, and has since repelled this law early this year.

[Arcachon]

3) I believe this "value-add" discount is flawed as well because it does not take into consideration that the govt is forcing people to sell their freehold land (not leasehold land) to them, and hence the owner, in accordance to the law under "freehold" title, have the right not to sell the govt if the compensation is not made at fair market value. If the land is "leasehold" title, then the govt has the right, but not "freehold" title land, according to English law that we inherited as UK's colony.

So if the government did not "value-add" they can pay less is it ?

Example : Government use the land to dump waste, they can buy it for less.