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Committee not involved in AGM

Please refer to Monday’s article, ‘En-bloc uproar at Bayshore Park, Mandarin Gardens’ by Ms Jessica Cheam, and the letter by Mr Augustine Cheah, ‘En-bloc system needs relook, as Bayshore shows’.

The Mandarin Gardens collective sale committee would like to clarify that it was not involved in the proceedings of the annual general meeting on April 27.

However, we know of members who attended as legal owners or subsidiary proprietors. One of our members present at the AGM declared that none of us would stand for election to the council.

We certainly did not organise any collection of proxies, although some subsidiary proprietors may have approached committee members in their capacity as neighbours.

Tan Kok Khoon
 
Source : Straits Times - 9 May 2008

Letter from David Soh Poh Huat

IT IS interesting the fact that en bloc unhappiness still prevails despite last year’s new rulings.

Maybe it is time the guidelines are further tweaked to follow those of the Housing and Development Board’s Lift Upgrading System.

Before any en bloc committee is formed, the management committee should conduct a poll for every registered resident to either opt in or out of en bloc.

If 100 per cent consent is not obtained, the project should be scrapped and put on hold for three to five years.

This will be more efficient and neighbourly than forming an en bloc committee, wasting precious time and resources, and then scrapping a project when there is no majority.

Source : Today - 7 May 2008

Sales committees rein in estate councils, irking owners who want to upkeep homes

The market for en bloc sales may have gone dead quiet, but the issue is still raising a ruckus at two of Singapore’s most iconic condominium developments in the East.

Sales committees pushing for the collective sales of Mandarin Gardens and Bayshore Park have been accused of trying to control the management councils running these estates and voting down proposals to upgrade estate facilities.

The committees, made up of residents who are pro-en bloc, have denied the charges.

Still, things came to a head last Sunday at both condos’ respective annual general meetings (AGM), which lasted up to 10 hours each.

Sales committees are ad hoc committees formed by residents to explore the potential of an en bloc sale. They are different from the management council, which is appointed at the AGM by residents to run the estate and look into the upgrading of facilities.

Residents against en bloc sales at both condos claim that the sales committees had gone round collecting proxy votes from residents so as to control the outcome of the AGMs.

Mandarin Gardens’ emotional AGM has left the 25-year-old estate with no management council at all. The existing council quit and refused to be re-elected because of some resolutions passed at the AGM. At the centre of the dispute was a controversial proposal by the sales committee, which was formed last year, to reduce the management council’s current limit of $300,000 for expenses on urgent matters to $50,000. This was successful as the sales committee had enough proxy votes to form the majority. Council chairman Neoh Chin Chee said in a letter to residents last week that the resolutions passed made it ‘untenable or difficult to carry on as a council member’. Proposals to upgrade the condo’s rainshields and swimming pool tiles were also not approved.

The AGM was eventually adjourned when not enough candidates were nominated.

One resident Jeannette Aruldoss, 44, a lawyer, told The Straits Times that the $50,000 limit restricted the role of the council to run the estate. In emergencies, this fund may not be enough to address safety issues, she said.

But sales committee chairman Mr Tan Kok Khoon said some residents had felt the $300,000 limit was too high.

Over at the 21-year-old Bayshore Park estate, the sales committee proposed and pushed through a resolution to reduce the council members from 14 to nine.

Of the nine, four are also on the sales committee, so some residents are upset about the change.

Bayshore resident Mr S.K. Cheah, 40, a sales director, feels there could be a conflict of interest since sales committee members are likely to act in the interest of a sale, above that of the estate.

He noted that at the AGM, some resolutions for maintenance and upgrading were also voted down.

Another Bayshore Park resident, who declined to be named, commented that one common tactic used by many sales committees is to ‘run the estate down’ or keep maintenance to a minimum, so residents have little choice but to vote for a sale later.

But Bayshore’s sales committee member Alan Chua told The Straits Times that they had no intention of doing that.

‘We’ve lived here for many years and love this place, why would we do that?’ he said.

On the en bloc sale potential, Savills Singapore director (marketing and business development) Ku Swee Yong noted that at least $2 billion each would be needed to buy each estate - a tall order even when the market is good. “With the current market, the sale is impossible,” he said.

Source : Straits Times - 5 May 2008

If the Government still thinks the current laws under the Building Maintenance and Strata Management Act and the Land Titles (Strata) Act (Amendment) are sufficient to regulate the issues of collective property sales, this tale of two condos may provide food for thought, especially as the Government has invited feedback on these laws.

On April 27, Bayshore Park and Mandarin Gardens both held annual general meetings. These two estates, with more than 1,000 units each, sit on 1 million sq ft of land next to the sea.

Both have got a collective sale initiative off the ground, with sale committees elected. With the support of pro-sale residents, voting powers are then used to control the rest of the estate, even though the votes represent only a minority of residents. Let me illustrate:

In Bayshore Park, the pro-sale group outvoted other residents on crucial issues and in selection of council members. Averaging 60 per cent of votes cast at the AGM, this roughly 20 per cent of residents (as only 30 per cent of owners were represented at the AGM) voted down a proposed increase in maintenance charges in line with current inflation, voted for a lower increase in the sinking fund, voted down crucial replacement of copper pipes in the common corridors and voted down any exploration of corridor upgrading. In addition, they voted for a reduction in council seats to nine, making sure four sale committee members were voted into the council, and ensured that four of the five previous council members retained had exhibited pro-sale inclinations. They made sure two previous council members who did not favour sale were not re-elected. I was one of the two.

At Mandarin Gardens, in a similar vein, the pro-sale camp mustered enough proxy forms to control 65 per cent of the votes in the AGM. They defeated a motion to reduce water ponding of walkways and lift lobbies to improve safety, and passed a resolution to reduce management council (MC) expenditure limits from $300,000 to $50,000 making it almost impossible for the MC to function. Consequently, the incumbent council refused to stand for re-election. Even more devastating, the pro-sale camp fielded no candidates for council. Hence, no council was elected

The law was not broken at either AGM. However, many of us affected are sure the law was not designed to produce such outcomes.

Augustine Cheah
 
Source : Straits Times - 5 May 2008

Some may be forced to call off deals because of financing woes, says BNP report

A report by a major bank has flagged potential financing concerns for small property developers that swooped in on the collective sale boom in the second half of last year.

BNP Paribas said that given the current turmoil in the financial market, some of these small operators might face financing problems as they move to finalise deals struck in the property market heyday last year.

In fact, some may be forced to cancel the deals and walk away, it warned.

The report by the French bank said that most of the collective sales done in the second half of last year were by small private developers, contractor- cum-developers and non-core developers.

They included Soilbuild, Hiap Hoe, Lian Beng, KSH Holdings, Koh Brothers, Popular Holdings, Aspial Corporation and Eastern Holdings.

‘In the near future, we are concerned that some smaller players that have secured big and expensive en bloc sites may walk away from the deals as securing financing is not easy at this time, especially for non-core developers,’ said the recent report.

Already, a small private firm, Bravo Building Construction, said to be backed by a one-time big property player, has bailed out of three collective sale deals.

In all three deals, it has had to give up its deposit, which ranged from 1 per cent to 10 per cent of the sale price.

The biggest of the three deals was the $516 million purchase of Tulip Garden, for which Bravo had to forfeit its $25.8 million deposit.

A property consultant, who declined to be named, said the smaller buyers last year were mostly listed firms and thus unlikely to renege on their deals.

‘Some small privately owned firms are looking for joint-venture partners for their development sites or to divest the sites,’ said Credo Real Estate’s executive director, Mr Tan Hong Boon. ‘But they will sell only if they can get a reasonable market price.’

Mr Nicholas Mak, the director of research and consultancy at Knight Frank, said: ‘The last time developers defaulted on deals was when there was a prolonged downturn.

“But we have yet to enter a price decline situation. The jury is still out on whether the property market will suffer a downturn.”

Source : Straits Times - 5 May 2008