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First cars, now letter boxes.

Several residents of the Laguna Park condominium in Marine Parade Road had their mailboxes vandalised last night.

In the third such attack this month, vandals used glue to seal the keyholes of eight letter boxes - all belonging to residents who had not signed the condominium’s en bloc sales agreement.

For some victims, last night’s attack was the second time they had been hit.

Several had their cars damaged last month when vandals threw a corrosive liquid, possibly paint thinner, on them.

The residents have appealed to their management committee for help, and have suggested that closed-circuit television cameras be set up to prevent future attacks.

This is being studied.

One victim of last night’s mailbox attack, who wanted to be known only as Mr Chan, 50, said: ‘I’m disappointed that it has come to this. The kampung spirit we had here has gone…all over an en bloc sale.’

He added: ‘I fear that this is not the end.’

Police are investigating.

Source : Straits Times - 21 Aug 2008

Fix bank-or-CPF charge problem

The Strata Titles Board’s (STB’s) recent decision to throw out the sale of Tampines Court has put an end to a three-year en bloc saga. But the issues raised during the objectors’ hearings will no doubt resurface again in future en bloc sales. They deserve a closer look.

Essentially, STB killed the application because it was not done ‘in good faith, taking into account the sale price and the method of distributing the proceeds of the sale’.

Although there was no mention of financial loss, this was at the heart of the minority owners’ objections.

A financial loss is deemed if an owner’s sale proceeds, after deductions allowed by STB, are less than the price he paid for his property.

But the law does not specify what deductions are allowed. Based on precedents set by STB decisions, stamp duty and legal fees are allowed but interest and renovation costs are not.

In the Tampines Court case, a fair number of owners faced the prospect of financial loss. They might have ended up with no cash in hand and a big hole in their CPF accounts if the sale had gone ahead. No wonder they fought it with such determination, scrutinising the deal for every possible flaw.

This problem is not likely to go away, for estates can be sold en bloc once they are 10 years old. Many would have bought their apartments at, or near, the previous 1996 peak. Those facing financial losses will contest en bloc sales to the bitter end and STB may well be hearing many appeals.

Which begs the question: Is there a win-win situation for all? I believe there is, but this would require a tweaking of the rules. Let me explain.

The current procedures on how to deal with financial loss have been created by a combination of rules and rulings.

Under the law, the STB can reject an en bloc sale application if an objecting owner can show that he will suffer financial loss.

The sales committee and their lawyers usually make a provision for this by running a financial check on all owners to determine who might suffer losses and calculating the sums that would be needed to pay them. Usually this sum is deducted from the total sales proceeds, before they are distributed equally among owners.

Some other brokers, however, set aside a specific sum obtained from developers, as in the case of Tampines Court. In most cases, the industry way of doing things works out fine. But the problem arises for individual owners when there is a financial loss and it is the bank, and not the CPF, that has first charge upon the sale of the property.

If it is the CPF that has first charge of the property, then it is a straightforward case. Sellers will always have their CPF accounts fully reimbursed first and then the bank loan will be paid off with whatever money is left. If there are insufficient funds, the sales committee will compensate them from the total proceeds. Everyone is happy.

But if the bank has first charge, then it is possible for an owner to lose from the sale. The proceeds of the sale go first to repaying the bank loan. After that, the money goes to top up the owner’s CPF account - but in some cases, the remaining sum is not enough.

You would think that the law would require this CPF shortfall to be made good. But this is not the case, as shown in the Waterfront View ruling last year.

In that case, a couple tried to stop the en bloc sale by claiming financial losses. They said the $660,000 payout for their home was not enough to pay off their bank loan and top up their CPF accounts. The CPF Board had said the couple did not have to top up this shortfall.

As a result, the STB made a landmark ruling - upheld by the High Court - that since the CPF Board had not required them to top up their accounts they could not claim financial losses. This decision sparked an outcry. Deputy Prime Minister S. Jayakumar later explained in Parliament the principle behind the decision.

In a property purchase, CPF funds can be used to pay for three components: the initial downpayment, the monthly repayment of the bank loan principal, and the monthly repayment of the interest on the bank loan.

Professor Jayakumar explained that CPF funds that go into repaying bank loan interest are not taken into account. This is to distinguish between owners who take no loans at all or who take a small loan with little interest, and owners who take long-term mortgages with a high component of interest payments.

This seems to make sense, but not for owners who have been forced to sell their home and take a hit in their CPF accounts - which affects their ability to buy a new home, as well as their retirement savings.

If it is a forced sale, no owner should have to suffer financial losses just because he made a decision to take a big loan some years ago.

There are many who might be caught in this situation. The CPF Board used to have the first charge on private properties, but in 2002, banks were given first charge. For former HUDC developments such as Waterfront View and Tampines Court, the change was made as early as 1996 to give banks first charge.

There are two possible solutions to this problem. One is to reverse the policy and require all owners facing financial losses to top up their CPF accounts fully, regardless of whether CPF funds were used to pay loan principal or interest.

A second less drastic solution would be to mandate that the CPF Board should have the first charge for all en bloc sale cases. The CPF Board would not object and neither would banks, since it would not affect them: The current custom of compensating owners who suffer financial losses would continue, ensuring bank loans would be repaid.

To owners facing financial losses, however, this change would make a world of a difference. If they can be assured that they will not be worse off after a sale, they might drop their opposition.

The other en bloc sellers will, of course, need to share the cost of compensating financial losses. But this is a relatively small price to pay, considering that most will reap a windfall.

In the case of Tampines Court, there was a couple who claimed CPF losses of $69,000. Divided among the 560 units in the estate, this works out $123 per seller. Even in the unlikely situation of all 100 dissenting owners claiming this amount, it would have worked out to $12,300 per seller - still small compared with the overall profit, which might have amounted to $300,000 for some owners if the sale had gone through.

It will serve the interests of all parties involved to address the bank-or-CPF charge problem. When a home owner is assured that he will not suffer a financial loss, a forced sale in the name of urban renewal might begin to make sense.

Source : Straits Times - 20 Aug 2008

I REFER to Monday’s article “Hope for owners fighting en bloc”. I am a staunch “stayer” in a condo which has tried to go en bloc many times.

There is a saying by Confucius: To have harmony in the nation, there must be harmony at home. Home, to many of us, is one of the most basic and important building blocks of a nation. But with collective sales, what is “home” when a majority can sell yours without your consent?

I do not think this is the type of message we should be instilling in our young: “Your home is your home only until someone else sells it for you - without your consent.”

If every 10 years or so, your home goes on sale en bloc, how do you cultivate the emotional belonging and commitment to the home? Subsequently, without “home”, how are the young going to cultivate the feeling of belonging and commitment to our nation? The young are the future pillars of our nation.

What are we showing our young with the current en bloc situation, whose message seems to be “profit is everything”?

Sarah Wong (Mrs)
 
Source : Straits Times - 13 Aug 2008

A website with information on the laws and processes in collective sales is aimed at helping minority owners

The name of the website - www.hope4stayers.com - says it all. It is a forum for, and set up by, people who are worried about losing their homes in a collective sale.

Its opening words are a call to arms.

“We need to share our experiences to get us through this nightmare,” it reads.

“We hope that our daily lives can be free from the constant worries of losing our homes to those who see home as a mere financial tool for wealth.”

Cosmetics distributor Tan Keng Ann started the site when his neighbours wanted their condominium along Toh Tuck Road sold en bloc last year.

The 60-year-old said there had been a dearth of information online about collective sales.

“We want this to be an educational site, for people to learn more about en bloc sales.”

And so the Hope website was born. (It is an acronym for Home Owners’ Protecting Entitlements.)

The site started in February with about five or six members from estates on the chopping block. Today, it has a core group of 25 flat owners scattered in 15 estates that are going through the sale process, some for the second time.

They include Bayshore Park, Green Lodge and Pine Grove, some of which made waves in the media by forming an anti-sales brigade.

The Hope group’s objective is to equip stayers, also called minority owners, with information about the en bloc process so they can fight to keep their homes.

The website is expansive. It includes a compilation of the collective sales law, legal tips for minority owners and a list of confirmed, on-going and failed en bloc deals.

One member, who declined to be named, joined after some new faces at her condominium tried to get elected to the management committee.

She said: “I didn’t know what these people were up to.”

She learnt soon after when a collective sales order was tabled.

For those who opposed the sale, information about the en bloc law was key, she said. They were facing an uphill battle against a majority of owners who had professional consultants to guide them through the legal minefield.

One minority owner in Rainbow Gardens along Toh Tuck Road wishes he had known earlier how to navigate the en bloc landscape.

The resident, who declined to be named, protested against the sale even though it had the requisite 80 per cent support to go through.

His appeal to the Strata Title Board, a government authority that rules on en bloc sales, was turned down. He took the case to the High Court but, the sale went through before it was heard.

Disappointed, the man said he is considering writing about his ordeal for the Hope website.

He said: “My advice to minority owners is pray hard you don’t get the 80 per cent.”

Meanwhile, the Hope group is cobbling together a list of proposals for the Law Ministry to consider.

A ministry spokesman said it will ‘continue to monitor the effect of the changes in practice, and review the feedback to see if further amendments to the en bloc rules are necessary’.

Not everyone is supportive of the Hope website, though.

Mr Issac Chin, an investor who sits on the sales committee of Pearl Bank Apartments at Outram Park, which is trying to go en bloc, does not see the need for such a group.

He said the law is clear: if 80 per cent of the owners want to sell, the sale will go through.

Source : Straits Times - 11 Aug 2008

Name calling: check. Anonymous letters: check. Scratched cars and damaged property: check.

Residents of an East Coast condominium are now entering the next phase of what has become an especially fractious en bloc sale: finger-pointing.

At a Laguna Park meeting last Saturday, residents against the collective sale squared off against those in favour. They each blamed the other for a recent spate of vandalism which saw cars doused with what was likely to be acid.

The situation is the latest example of en bloc battles that are bleeding the neighbourliness out of neighbourhoods. As the fever for collective sales cools and profits thin, some insiders say the battles are becoming nastier.

Property consultant CBRE says a total of 112 sites sold for $12.45 billion last year. So far this year, six sites have been sold for $360.03 million.

Residents in some estates have seen a surge in pressure tactics, from name-calling and flyers shoved into letter boxes to paint thinner poured on cars.

But just who is behind the crimes is a matter of much debate.

En bloc vandals work on the sly and have yet to be caught, but those in the property industry feel that investors are the ones playing dirty.

Property consultant David Chia said that the crimes are unlikely to have been committed by long-time owners, as they would not want to risk the embarrassment of being found out.

‘This narrows it down to investors who have nothing to lose,’ he said.

Many of these investors bought multiple flats at the height of the en bloc fever last year and are eager to sell them off in the face of a cooling property market.

But investors such as Mr Simon Teh, 50, disputed the accusations: ‘Why should we go and fight and vandalise cars? That doesn’t help us get 80 per cent approval for the sale and, worse still, we can get jailed.’

Mr Patrick Kumar, 53, who has been involved in three collective sales, agreed: ‘Violence will just harden a person’s sentiment not to sign.’

As an investor, he said, he was ‘more likely to placate the residents’. ‘Investors are there for the money, not for the violence,’ he explained.

Instead, he passed the buck to owners living in the condominiums, saying some might be anxious to catch the tail end of the en bloc wave and cash out.

Another bogeyman cited by unhappy home owners: agents appointed by the sales committee, who usually collect a fee of 0.2 per cent to 1.5 per cent of the property value.

Veteran ‘en blocker’ Mr Kumar said agents are the ones who ‘rile people up’ and keep track of who has signed the collective sale agreement and who has not.

But Mr Jeremy Lake, CBRE’s executive director of investment properties, maintained otherwise.

He said: ‘We will be proactive, but we also know that if we push too far, it would be counter-productive.

‘In fact, we do take appropriate steps to dissipate tension during meetings.’

Property consultants who deal with en bloc sales say the ugliest cases, like in Laguna Park, are rare.

More common, said Mr Karamjit Singh, the managing director of Credo Real Estate, are shouting matches during residents’ meetings.

Property firm Savills’ director of marketing and business development Ku Swee Yong said: ‘When it comes to en blocs, even educated people become idiots.’

Source : Straits Times - 11 Aug 2008