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SELLERS both eager and reluctant in collective property deals will find out in time if the legislative changes Deputy Prime Minister and Law Minister S. Jayakumar tabled in Parliament on Monday balance their competing interests. What the latest draft amendments to the Land Titles (Strata) Act will do, as much as they can do for the time being, is to provide more safeguards and make the process more transparent for both groups. These will go a long way to helping them avoid doubt and dispute that could lead to drawn-out and costly litigation, such as in the current Horizon Towers case. The proposed changes could not have come sooner. They strengthen the practice in the crucible of a booming property market. Many - sellers, buyers, realtors and lawyers as well as the authorities - have learnt much in the last few months of en bloc frenzy.

More than 100 people recently made over 400 suggestions in six weeks of public consultation that resulted in more than 30 proposed measures. The intensive and extensive exercise appears to have thrown up fixes that are sorely needed. Up to now, no rules exist governing the establishment and conduct of an en bloc sales committee. With the changes, the decision to set one up and the consideration of its proposals will lie with the management corporation, thus effectively safeguarding owners from any sharp practices outsiders may have in mind. The requirement that a sale must be launched through public tender or auction will help ensure the best price. The five-day cooling-off provision will protect sellers from making a hasty decision. The presence of a lawyer to witness documents and to clarify terms will increase everyone’s comfort level while guarding the deal from technical pitfalls.

Another significant change is that the consent owners must give for an en bloc sale will relate to the size as well as the share value of their property. The additional condition is a sensible attempt to deal with the concerns of owners of residential properties, which generally have a smaller share value than offices or shops in a mixed development. Beyond that, the 80 per cent and 90 per cent owner consent requirement will be left untouched for developments more than 10 years old and less than 10 years old respectively. It is probably felt that increasing the percentages will make such deals unduly onerous. If the proposals make possible en bloc sales without tears while encouraging urban renewal at an optimal pace, an objective not to be lost sight of, they will have done their job. If not, further tweaks can always be made. 

Source : Straits Times - 30 Aug 2007

TWO prime state sites - an Alexandra Road residential plot and a commercial one in Toa Payoh - are now available for sale.

The Alexandra site is a 99-year leasehold plot near Tanglin View, Tanglin Regency and the upcoming Metropolitan just a stone’s throw away from the Redhill MRT station.

The site area is 0.86ha and has a maximum gross floor area of 451,428 sq ft. With these dimensions, a condominium 40 storeys high with 360 to 400 homes can be developed on the site.

The Urban Redevelopment Authority is marketing the site, which is on the Government’s reserve list.

It will go to tender once a developer commits to an acceptable bid.

Analysts agree that the site is a prime one but have given wide-ranging estimates on how much it will fetch.

Mr Nicholas Mak, director of consultancy and research at Knight Frank, expects a top bid of $375 to $400 per sq ft per plot ratio (psf ppr).

CB Richard Ellis executive director Li Hiaw Ho, however, tips it at $650 to $750 psf ppr, while Jones Lang LaSalle’s regional director and head of investments, Mr Lui Seng Fatt, forecasts a bullish $1,000 psf ppr or more. That values the plot at $451 million.

Mr Li likened the condo that could be built on the site to the one going up next door - the 99-year leasehold Metropolitan, which drew long queues when it was launched.

‘We expect the new project to be popular among prospective home buyers. Investors will be attracted to this project, too, as apartments in the locality are popular among tenants,’ he said.

Mr Li expects the condo units to each sell for an average price of $1,200 psf to $1,300 psf.

The Toa Payoh commercial land, meanwhile, is a 99-year leasehold site in Lorong 6 with an area of about 0.14ha.

It can take up to 45,105 sq ft of built-up space comprising retail, food and beverage, office and entertainment outlets.

The tender, which is being handled by the Housing Board, closes on Oct 16.

Mr Lui of Jones Lang LaSalle estimated that the site could yield about 30,000 sq ft of lettable space and would fetch at least $70 million in the tender.

The small site near the bustling HDB Hub can accommodate a three- to four-storey development suitable for retail or food outlets serving the mature housing estate and offices nearby, he said.

Source : Straits Times - 30 Aug 2007

I READ with interest the letter, ‘Why flat buyers should approach sellers directly’.

In some cases, agents become a stumbling block to a successful transaction.

My friend experienced this just a few days back. He went with his agent to buy an executive apartment. He liked the house as it met all his requirements. Both the seller and buyer agreed on the price.

Then the seller’s agent dropped a clanger. As this was a negative sale (whereby the seller is incurring a loss and won’t get any cash out of the sale), the seller will not be able to pay his agent’s commission. Therefore the seller’s agent said that an amount of $10,000 had to be paid in cash separately by the buyer and the selling price will be declared after deducting this amount.

My friend’s agent was a genuine guy and he turned down the offer of the seller’s agent, saying it was illegal. Now because of the presence of the seller agent’s in the picture, a legitimate transaction had to be aborted. Both my friend and the seller are disappointed.

The seller’s agent told my friend that since the $10,000 was to be paid in cash, there would be no record and no one would know about it. Should we attribute this to agents functioning unscrupulously or is it a genuine case where their efforts have also to be rewarded?

N. Nageswaran
 
Source : Straits Times - 30 Aug 2007

I HAVE a two-room flat which I rent out. I used to get agents to find tenants for my flat.

Because I am now retired and am free, I do the advertising, answering calls and taking all the details myself. But I encounter a lot of harassment by agents who want a commission although they do not do anything but just bring in clients who want to view the place. They want commission from both parties.

When I reckon that clients like my place, and the rental is negotiated, the agent approaches me for commission for which he had not done anything. When I tell him I don’t intend to give him/her a commission, he/she would persuade the client to ‘abandon’ this place and go for a ‘better’ accommodation.

The client, therefore, loses the opportunity to rent this place. It is, in my view, unethical as the client has lost an opportunity. I guess this is a common case, but something must be done about it.

D Sambasivan
 
Source : Straits Times - 30 Aug 2007

I WOULD like to share my experience with a dishonest housing agent, in the hope that future sellers will not be fooled by unscrupulous ‘I will try my best to get you the best price’ agents.

Two years ago, I appointed an agent to sell my apartment for $940,000.

It took a while to sell it because market conditions at that time were not too good. Eventually, she called and said she had received an offer of $800,000 for the unit.

Desperate I might have been but I refused to sell because the price was too low. I told her that I would not sell for less than $900,000.

Playing the good, honest agent, she asked me if I would split the difference with her if she could get the buyer to pay more than $900,000.

Thinking that no buyer would agree to pay an additional sum of more than $100,000 after having offered such a low price, I agreed to split the difference with her.

Less than five minutes later, she called and said she managed to convince the buyer to pay $940,000, which was the price I wanted to sell my apartment for originally.

It was only then that I realised that I had been duped. I learnt an expensive lesson.

Goh Leng Choon
 
Source : Straits Times - 30 Aug 2007