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IT IS stated on the website of the Institute of Estate Agents (IEA) that an agent should not accept any commission from both vendor/seller and purchaser/buyer in the same transaction … (Section 2.2.1 on page 3 on website). It is also stated that the professional fee is 2 per cent from the seller and 1 per cent from the purchaser if each of them is represented by the agent.

I would like to highlight a few points:

1) What is the recourse to the buyer without an agent if the seller’s agent insists that the potential buyer pay a 1 per cent commission, failing which the agent won’t go through with the transaction to sell the HDB flat to the buyer? The buyer is pressured by the agent because if he/she doesn’t pay the 1 per cent commission, the seller’s agent will not entertain the buyer upon signing the Option to Purchase. If the buyer decides to use legal recourse (which would take months), the property will be bought by other buyers who are willing to pay the 1 per cent commission. How does this benefit the seller as the agent is acting on his/her own interests rather than the seller’s? How is the buyer’s interest protected in this case? Is there any way to report the rogue agent to the authorities?

2. Are professional fees highlighted on the IEA website regulated or enforced? I am asking this because an agent can flout the rules by not letting any potential buyer view the property if he/she insists on not paying the 1 per cent commission to the agent although the agent is already paid 2 per cent by the seller. Any buyer who insists on not paying the 1 per cent commission will have considerably fewer chances to view flats. And the seller will, in turn, get fewer sales opportunities because his/her agent wants to pocket commissions from both the buyer and the seller.

3. Agents who flout the rules are punished lightly. If fired, they will simply join rival agencies. Because of the light punishment, agents are not afraid of breaking the rules. Lawsuits are out of reach for the common people, and rouge agents are using this knowledge to their advantage. How are property buyers/sellers protected from rouge agents?

4. The regulating authority should use ‘mystery shoppers’ (or ‘buyers’ in this case) to make spot checks on agents. Those found guilty should be banned or punished severely. This is to protect genuine agents who play by the rules.

Sentosa Gani

Source : Straits Times - 31 Oct 2007

I AM writing to highlight what may be the start of a trend that property buyers need to be aware of.

Recently, I wanted to view a newly built showflat near Upper Bukit Timah Road but I was not allowed in.

The reason was that I had to present a signed blank cheque with the intention of booking a unit before I would be admitted into the showflat.

Is such a practice allowed and are there any watchdog organisations that regulate the sale practices of developers or agents assigned to market properties?

Prospective buyers should not be coerced into buying a property costing a million dollars, though this may be a small sum in today’s property market.

Chue Shien (Ms)

Source : Straits Times - 31 Oct 2007

THE scrapping of the deferred payment scheme for new homes has failed to dampen the optimism of property group Wing Tai Holdings.

It can still offer the scheme on two yet-to-be-launched condominiums as it had obtained approval before the Government withdrew the scheme last week. The scheme allowed homebuyers to postpone most payments on uncompleted property.

The move to end the scheme was aimed at deterring speculators and forcing people to be more prudent when committing to pricey real estate.

Wing Tai chief operating officer Tan Hwee Bin told The Straits Times yesterday that ending the scheme was a good idea as it would create a basis for strong, sustainable market growth in the long run.

‘There will be a short-term impact for the market as a whole as buyers will have to manage their cash flows better.’

But she did not believe that Wing Tai itself would be affected, given its portfolio of largely upmarket developments.

‘About 80 per cent are located within districts 9, 10 and 11, and many of our clients are high net-worth individuals and serious investors as opposed to speculators.’

Wing Tai still has approval to offer deferred payments for its L’VIV condo in Newton Road and Belle Vue Residences in Oxley Walk - both set to be launched in the first half of next year.

Mainboard-listed Wing Tai yesterday said net earnings for the three months ended Sept 30 doubled to $61.8 million due to higher contributions from its VisionCrest and Casa Merah projects.

Revenues fell to $100.2 million from $164.8 million previously. Earnings per share rose to 8.58 cents from 4.29 cents while net asset value per share went up to $2.14 as at Sept 30, from $2.07 as at June 30.

Wing Tai also intends to increase its stable of retail and lifestyle brands next year. These businesses now contribute more than 10 per cent of revenues.

It currently has 18 brands in 129 outlets in Singapore, including well-known names such as Topman and Warehouse, sports giants Nike and Adidas, and mass market labels such as G2000, and Japanese restaurant chain Yoshinoya.

Ms Tan said Wing Tai is in talks with several mid- to high-end brands from Europe, Asia and the United States about coming to Singapore, but declined to reveal details.

ALREADY APPROVED

Wing Tai can still offer deferred payments for two upcoming launches in Newton Road and Oxley Walk, says chief operating officer Tan Hwee Bin.

Source : Straits Times - 31 Oct 2007

Majority sellers start second attempt to get STB’s approval for the $500m sale.

THE saga of the botched $500 million collective sale of Horizon Towers moved a step closer to possible resolution when it returned to the Strata Titles Board (STB) yesterday.

Owners who support the bitterly contested sale to developer Hotel Properties and its two partners are battling it out with those opposed to the sale, first inked in February.

An earlier STB hearing ended abruptly on Aug 3, when the board threw out Horizon Towers’ application to approve the collective sale on technical grounds, because three pages were missing.

On Oct 11, the High Court overturned the STB’s decision and threw the case back to the board for the hearing to be continued.

The fight over Horizon Towers erupted in April when a group of owners decided the estate’s sale price was insufficient in view of the rising market.

The buyers have launched a lawsuit against the owners for alleged breach of contract. They want to claim lost profits of up to $1 billion.

That legal battle will be averted if the condo owners finally win the STB’s approval for the sale.

Lawyers from Allen & Gledhill, representing the buyers,

had wanted to take part in the STB hearing but their application for permission to do so was dismissed recently.

That leaves a battle between the majority owners, represented by Senior Counsel Chelva Rajah of Tan, Rajah and Cheah, and the minority owners, represented by various lawyers.

An otherwise unexciting hearing yesterday offered one surprise, when a lawyer turned up unannounced and was asked to leave the lawyers’ table.

He had been appointed by an owner who had agreed to sell Horizon Towers en bloc.

But before he left, the lawyer - Mr Cheong Yuen Hee of J. S. Yeh & Co - was allowed to outline his client’s key points of contention.

He was then asked to file a written submission.

Mr Cheong alleges there is a ‘frustrated’ collective sale agreement as well as sale and purchase agreement.

He said his client does not accept the new sales committee or its authority to extend the condo’s sale deadline to Dec 11.

The new committee recently stretched the deadline as part of its efforts to avert the buyers’ lawsuit.

A lawyer who has been following the case said Mr Cheong’s statement was significant.

‘It’s dramatic because it’s the first time a majority owner has come out to say the deal is dead, under the hammer of a lawsuit,” he said.

Yesterday was the first of several days of hearings scheduled until mid-November.

The next session is on Tuesday.

In coming sessions, to be held at a court room in City Hall building, lawyers will call witnesses to support their respective positions.

joyceteo@sph.com.sg

New twist

In a surprising turn, Mr Cheong Yuen Hee of J. S. Yeh & Co, a lawyer appointed by an owner who had agreed to sell Horizon Towers en bloc, turned up unannounced.

He alleges there is a ‘frustrated’ collective sale agreement as well as sale and purchase agreement. He said his client does not accept the new sales committee or its authority to extend the condo’s sale deadline to Dec 11.

Source : Straits Times - 31 Oct 2007

Flat owner who backed en bloc move challenges legality of sale in court.

THERE was none of the sparks, spats and conspiracy theories that characterised the High Court hearing last month. Still, the Horizon Towers saga returned yesterday with yet another twist.

The hearing started with an owner, who had previously supported and signed up for the en bloc sale, challenging the legality of the sale.

Lawyer Cheong Yuen Hee, who represents the owner, argued before the Strata Titles Board (STB) that the collective sale agreement (CSA), and the purchase and sales agreement had “lapsed” and were “no longer in operation”.

Mr Cheong likened the $500-million sale of the Leonie Hill development to “a joint venture” where the “joint objective was to sell at a profit”. The CSA was no longer valid as three members of the original sale committee had left.

But lawyer for the majority owners, Senior Counsel Chelva Rajah, argued that if the agreements were not valid, a party should go to court to get an order against them — that is, the STB should not be the one to decide if the CSA was valid.

The five-member tribunal, chaired by STB deputy president Dr Philip Chan, gave Mr Cheong till Friday to make his written submission on his application. The majority owners would then have till Monday to respond. Other parties also have till Friday to hand in their submissions on various issues.

The STB is hearing the majority owners’ application for a collective sale and deciding if the $500-million sale to a group of buyers should go through. On Aug 3, the STB had dismissed the majority owners’ application on the grounds that it was incomplete as it was missing three signature pages.

Earlier this month, the High Court overturned the STB’s ruling and said the missing pages do not constitute a substantial omission that prejudiced the minority owners. It sent the application back to the board.

Yesterday’s two-hour hearing witnessed applications contested vigorously by the majority and minority owners. Lawyers of two groups of minority owners applied to release all correspondence between the sales committee and the lawyers for the sale. The majority owners, however, objected and argued that the information was “legal privilege”.

The STB will next convene on Tuesday and the hearing is set for eight days.

Source : Today - 31 Oct 2007