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Q MY HUSBAND has been declared a bankrupt since 2002 because of credit card debts.

This happened after he was out of a job for six months and the bills piled up.

We also have a renovation loan of about $45,000.

As his wife and guarantor for the loan, I was harassed by creditors and was eventually made a bankrupt too in 2003.

We are not on speaking terms anymore. If I divorce him, will I be discharged from bankruptcy?

After our divorce, can he be liable to provide maintenance for our children who are below 12 years old?

His total debt is close to $200,000.

His monthly instalments to the Official Assignee were $500 (first year), $550 (second year) and $600 (third year).

The instalments are currently $700 per month.

A I note that you were made a bankrupt because you had stood as a guarantor for your husband’s renovation loan.

The lender had a perfectly legitimate legal basis to look to you for your husband’s outstanding loan.

When you became a guarantor for him (the principal debtor), you entered into a separate contract with the lender.

Your obligation to pay under this contract of guarantee was quite distinct from the principal debtor’s obligation.

It is worth repeating that many people assume the obligations of a guarantor without fully realising or appreciating what a burdensome contract they are entering into.

It is often said that a guarantor has everything to lose and nothing to gain.

You will not be discharged from bankruptcy by divorcing your husband.

A discharge from bankruptcy may be done in two ways, either by an application to court or by a certificate from the Official Assignee (OA).

You, the OA or any person with an interest may make an application to court.

The court may grant either an absolute discharge or a conditional discharge.

If you are granted an absolute discharge, you would be free from any further obligations.

But under a conditional discharge, the court may attach conditions such as requiring you to pay dividends of at least 25 per cent as well as make contributions from your post-discharge income.

The court will take into account such factors as your age, the cause of the bankruptcy and your blameworthiness in incurring the debts, the number of creditors and the value of your assets against your liabilities.

For a discharge by certificate from the OA, the OA generally reviews all cases where there is a bankruptcy of at least three years and the debts are less than $500,000.

The OA also takes into account similar factors as a court also looks at the bankrupt’s conduct and level of cooperation.

In both situations, the creditors have to be notified and they are entitled to object.

If the OA rejects the objections, the creditors can then go to court for an order prohibiting the OA from granting the certificate.

As both situations involve the exercise of a discretion, the interests of the bankrupt are balanced against those of the creditors, the public and commercial morality or common honesty.

While it is true that a bankrupt’s property automatically vests in the OA, the OA is not automatically entitled to a bankrupt’s income.

He has to apply to the court for an order to receive the bankrupt’s salary for distribution to the creditors.

The rationale for this is that the bankrupt must be allowed to support himself and those he has a legal duty to support.

He cannot be converted to a mere slave or a personal chattel of creditors.

Therefore, applying the same principle, because your husband has a duty to maintain his children until 21 years of age and in some situations, even longer, there is no reason why he cannot be ordered to pay them maintenance.

Gina Ho

Lawyer

Amolat & Partners

Source : Sunday Times - 5 Nov 2006

LIPPO Group has drawn together an interesting array of partners for its first condo development at Sentosa Cove, BT understands.

Two banks - Singapore’s OCBC and a European bank - as well as the developer of ONE 15 Marina Club, right next to Lippo’s site, are all taking equity interests in the 99-year leasehold condo project.

OCBC is also expected to provide Lippo the loan for the development, in addition to taking a 10 per cent equity stake in it. The European bank - said to be Austria’s RZB - is expected to take a bigger stake, possibly around 25 per cent. Interestingly, the developer of ONE 15 Marina Club, SUTL Group, took part in the tender for the condo site when it closed in September.

Market watchers expect SUTL and Lippo to explore synergies between the adjacent developments. ‘The two could be packaged such that buyers at the condo get free membership of ONE 15 Marina Club. This would enable condo residents to use the marina’s facilities,’ one market watcher suggests.

Lippo is expected to participate in the development through its Hong Kong-listed unit Hongkong Chinese Ltd and will retain a majority stake of about 50 per cent in the project. The 170-unit condo will be four storeys high and is slated for launch in the second half of 2007. Lippo was the highest bidder for the site, at $234.7 million or $818 per square foot (psf) per plot ratio. Analysts say its breakeven cost could be around $1,200 psf.

Property consultants reckon Lippo aims to surpass the $1,600 psf average selling price that Ho Bee is now getting for The Coast on Sentosa Cove. Ho Bee has sold about 80 per cent of its 249-unit project. Lippo is understood to have appointed Australia’s Philip Cox as design consultant for its project and to have tasked Architects 61 with creating ‘a bungalow in a condo’. Market watchers say OCBC’s 10 per cent interest in the project marks the second time the bank is known to have taken a stake in a property development here in recent months.

OCBC earlier took a 10 per cent interest in the Orchard Central mall project by Far East Organization. That was seen as a strategic investment to pave the way for closer cooperation between Far East and OCBC, which owns the next-door Specialists’ Shopping Centre which it plans to redevelop.

Contacted yesterday, OCBC spokeswoman Koh Ching Ching declined to comment on the bank’s participation in the Lippo condo project. However, she noted that the Banking Act allows OCBC to take a stake of up to 10 per cent in any company without prior approval from the Monetary Authority of Singapore. And the bank is allowed to hold properties not for its own use, so long as their aggregate net book value does not exceed 20 per cent of the bank’s total capital funds.

Source : Business Times - 4 Nov 2006

DEMAND for JTC Corp’s industrial properties fell in the third quarter but remained generally positive.

In its third-quarter report released yesterday, Singapore’s largest industrial landlord said the net amount of prepared land leased eased to 24.5ha from 67.9ha in the second quarter. But this is above the 19.6ha in the same period last year.

Demand for industrial land hit a 10-year high last year, largely driven by local companies.

About 21.6ha of such vacant land that firms can use to develop their own facilities was returned, up from 18.2 ha in the second quarter.

The electronics cluster accounted for the bulk of the returned land.

In the other category of ready-built facilities, the net take-up rate reached 24,400 sq m, down from 42,900 sq m in the second quarter and 95,300 sq m in the same quarter last year. Net new demand for space in business parks fell to just 700 sq m, from 11,300 sq m in the previous quarter.

But the take-up of multi-tenanted factories rose to 11,100 sq m in the third quarter, from 3,400 sq m in the second, after accounting for a largely unchanged level of terminations.

JTC announced last month that it would sell some of its ready-built facilities into a real estate investment trust, as part of an earlier announced move to focus on a strategic role.

Source : Straits Times - 3 Nov 2006

Tenders for Minton Rise and Gillman Heights close without single bid

THE buzz about privatised HUDC estates going en bloc is dying down, with the tenders for two such estates closing recently without a single bid from developers.

Minton Rise in Lorong Ah Soo and Gillman Heights in Depot Road both failed to attract bids when their collective sale tenders closed in August.

Kheng Leong, a privately-held investment vehicle of United Overseas Land’s Mr Wee Cho Yaw, has since made a $189 million offer for Minton Rise. This is about $20 million below Minton’s asking price.

It is also well below the $250 million the 342-unit estate demanded when it first tried for a collective sale late last year. When the tender closed for that in January, Minton Rise had garnered just one bid - of about $184.7 million from Frasers Centrepoint - which its owners rejected.

Gillman Heights, meanwhile, has still ‘not received a firm offer from any purchaser’, as a letter sent to the estate’s residents last Tuesday explained.

Property consultants said the lacklustre interest in these estates could be due to their large sizes and 99-year leasehold tenures.

Developers may be reluctant to take on such massive projects, which would require a huge capital outlay, including a fee to top up the leases of the 20-year-old sites back to 99 years, said experts.

Minton Rise is about 472,379 sq ft, while the 607-unit Gillman Heights is a whopping 836,425 sq ft and carries a record $529 million price tag.

The two sites were put on the market following the successful sales of Amberville in Katong and Waterfront View in Bedok earlier this year. These were the first privatised HUDC estates to be sold en bloc.

The Straits Times understands that a developer has expressed interest in Gillman Heights, but a formal offer has yet to be made as the suggested price is about 15 per cent below the estate’s reserve.

But even the $189 million offer for Minton Rise looks unlikely to be accepted by the estate’s owners, said sources.

They noted that the original asking price of $209 million barely managed to garner backing from 80 per cent of the owners - the minimum level of consent required for a sale.

The lower price would likely entice even fewer owners to agree, they added.

So far, just over half the required 80 per cent of Minton Rise owners have agreed to sell the estate to Kheng Leong since they were told of the offer last Tuesday, said Mr Sam Tan, chief executive of NRA Real Estate, which is marketing both Minton Rise and Gillman Heights.

Source : Straits Times - 3 Nov 2006

Trend reversal due to expats wanting larger units and mounting shortage

BIG is beautiful, at least for a growing number of condominium buyers here.

In a reversal of long-standing trends, larger units at some developments are fetching higher prices per sq ft (psf) than smaller ones.

The reasons include an influx of expats wanting bigger homes, special features in such apartments and a mounting shortage of these units as older, larger homes are sold in collective sales.

Recent condo sales show that bigger units, including penthouses, are commanding prices of up to 30 per cent more psf than the average for the whole project.

Property consultants say this phenomenon goes against historical trends and conventional wisdom.

Larger homes have long tended to fetch lower prices psf simply because buyers generally expect to pay less psf as homes get bigger - akin to a discount for buying in bulk.

The consultants say the new trend reflects strong demand for large apartments, mainly in luxury properties, in a bullish property market.

This trend has been magnified by an already tight supply of these bigger units shrinking further due to the recent spate of collective sales.

At swanky condos such as St Regis Residences, Four Seasons Park and The Boulevard Residences, buyers have been forking out hefty sums for large apartments of more than 3,500 sq ft - coveted for their space and scarcity.

A 7,029 sq ft penthouse at SC Global’s Boulevard Residences went for $2,276 psf in May, 31.5 per cent more than the project’s average price of $1,730 psf.

Another posh condo, Hong Leong Holdings’ Tate Residences in Claymore Road, has also set a higher asking price psf for its two penthouses compared to the project’s other units.

The penthouses, at 6,000 sq ft and 6,500 sq ft, are going for between $2,700 and $2,800 psf - about 20 per cent more than the rest of the development, which has units ranging from 1,900 sq ft to 3,300 sq ft.

Even less luxurious projects, such as Lippo Group’s Newton One in Newton Road, are benefiting from this trend as an inpouring of well-paid expatriates lifts demand for larger apartments.

Rising affluence and the growing number of families with three or more children are also boosting demand for more spacious units outside the main city centre, said Ms Tay Huey Ying, director of research and consultancy at Colliers International.

According to property consultancy Savills Singapore, 554 units of more than 2,500 sq ft were sold from January to August this year, outstripping the 545 such units for the whole of last year.

Mr Nicholas Mak, director of research and consultancy at Knight Frank, said this is a new trend probably caused by the current bullish property market.

‘Large units attract a certain class of buyers that are more price-insensitive,’ he said.

‘They want the size and the view and the prestige, and they’re willing to pay for it.’

The recent collective sale frenzy means older projects with larger apartments are out of the market, to be replaced by new developments with smaller units over the next few years.

This has not only put pressure on the existing supply crunch of such units, but has also resulted in greater demand for them as owners of collective sale sites seek new homes, said Ms Tay.

She said that ‘owners of these collective sale sites tend to look for similarly large replacement apartments’.

Another factor boosting prices of large units is their location on higher floors, which command a premium for their better views, said Mr Ku Swee Yong, Savills’ director of marketing and business development.

But at some condos, demand for larger units is so strong that they are selling for more psf than their smaller neighbours on the same floor.

A 2,411 sq ft unit on the 22nd floor of Newton One fetched $1,400 psf in July, compared to a 1,808 sq ft unit next door that was sold five days later for $1,334 psf.

Developers are also making the most of the craze for larger units, with a number of them tailoring their projects specifically for this market.

CapitaLand’s Scotts HighPark in Scotts Road features a 27-storey block consisting exclusively of ‘penthouses’ over 3,466 sq ft, while City Developments has outfitted its St Regis penthouses with premium features like private spas and wine rooms.

Source : Straits Times - 3 Nov 2006