Restarting Enbloc - By NOT Being Fair to Owners?

I recently received the CSC Enbloc letter (see below) and the revised CSA that is an attempt to restart the enbloc process at BGV after more than a year long hiatus.

While I cannot stop the CSC from doing so, I want to point out several points that seems to have been ignored from the period of the last EOGM in August 2008 until now which pertains to the fair treatment of all owners, including those staying overseas or off-site and the continued lack of transparent process in the enbloc attempt of BGV.

Upon receiving the enbloc letter, I am, in particular, appalled that an extremely short deadline is imposed on all owners to request for written feedback on the most important document of all - the CSA and the apportionment method. Does this mean, if by this short deadline, no response is provided (which is likely), then the CSC will ASSUME that everyone is happy?

Surely that can't be how a group that is charged with taking care of the collective sale of the estate attempts to get a sense of the sentiments on the ground?

For the sake of fairness and transparency, I have reproduced my email to the CSC for all to see.

"From: enbloc_bgv@hotmail.com
Sent: 26 October 2009 02: 01AM
To:
Cc: enbloc_bgv@hotmail.com

Dear Botanic Garden View CSC,

Your Enbloc letter dated 18 October Sunday and the revised draft CSA were received by hand on 20 October 2009 Tuesday. It can only be assumed that owners who stay off-site or overseas will receive their documents anyday from 21 to 29 October.

There are several points which I wish to raise with the CSC and Credo:

1. The deadline of 30 October 2009 for written feedback is too soon. It is also unclear what is the nature of the feedback that you are requesting to comply by the 30 October 2009 – only the apportionment method, or with regards to the revised draft CSA as well. Given that the revised draft CSA was delivered in this letter, I can only assume that the deadline of 30 October 2009 applies for written feedback for both apportionment method and the CSA.

2. You have therefore effectively given owners only TEN days (and for many, less) to provide their written feedback on important matters such as the CSA of which the apportionment method is a part of. This does not give enough time for owners who reside overseas and also owners who are currently overseas to mull over, consider and respond. Neither does it give time for owners to get in touch with legal counsel with regards to the revised terms of the CSA. Also, it need not be pointed out that it has been more than a year since any formal correspondence was made on this matter, and many owners may have forgotten the exact discussions on pertinent issues by now.

3. At the very least, since the CSC has taken over a year to revise the CSA, the CSC should allow all owners at least 2 months, until the end of December 2009, to consider and respond to these revisions of the CSA (including apportionment method). Anything less will reflect negatively on the way the CSC seems to be giving owners insufficient time to examine the revisions. I can only assume that after this ‘deadline’ whichever date it may be, there will be no further discussion on the matter of the CSA so it is imperative that time be given for all owners to read through the legal document carefully, and under advisement by legal counsel.

4. At the 23 August 2008 EOGM, there were complaints by owners on the apportionment method and yet these issues did not change the apportionment method in the revised draft CSA in any way. It would appear that these complaints were ignored, despite the assurance at the EOGM that all feedback will be reviewed and taken into consideration, written OR verbal.

5. In order for owners to make an informed decision about the apportionment method, I find that the justification provided by Credo in the letter dated 12 September to be insufficient as it does not provide detailed accounts of all 6 different methods described. It is not the responsibility of owners, many of whom are not familiar with proper calculations for apportionment methods, to calculate alternatives as requested by the letter dated 18 October. Instead, it is incumbent upon the CSC and Credo to show to all owners what each owner will be getting from the en-b! loc sale, for each of the 6 methods, and then and only then, can each owner make a decision on which alternatives are more suitable for them.

6. Therefore, I would suggest reprinting the slides from the Credo presentation (included with the 12 September letter) which detailed the apportionment calculations for the 6 methods, and explain in greater detail why you felt that the 70/30 method is far superior to the other 5 methods.

7. Also, on what criteria will you be considering individual owners’ feedbacks? Currently, it would appear that the CSC and Credo is firmly committed to the 70/30 method since it has remained the same despite the EOGM discussions. Likewise, the changes to the CSA appear superficial rather than in response to the numerous concerns over the lower reserve price matter (although I will consult a lawyer on this point). In other words, how will you revert to all owners on the feedback received (ie the exact nature of said feedback), your responses to them, why you made the decisions you chose to make, including why you felt that any feedback is unacceptable.

8. Finally, to be clear and fair to all owners, I believe the CSC should make it explicit that you are requesting for written feedback on the revised CSA in your 18 October letter (it is implied, but not explicitly stated). Otherwise, there needs to be an EOGM to discuss the revised draft CSA, to be fair to all owners. At the very least, as mentioned, the deadline for feedback needs to be pushed by at least 2 months, and the protocols, processes and decisions whereby the CSC will consider such feedback should be made transparent to all owners.

Response from the CSC and Credo to the above points raised would be appreciated. Thank you.

Wong Hwei Ming
Blk 9, #09-17"

Tags: botanic garden, bgv, botanic gardens, botanic gardens view, en bloc, en-bloc, enbloc, real estate, singapore, collective sale agreement, csa, collective sales committee, sales committee, csc, letter to owners, apportionment

Comment Revisited

Below is comment which was received in response to Mr John Lee's email. It makes good sense and so we have reproduced the comment as a blog post. It is something for us to think about.

"I have received this latest email from John Lee and wish to make two comments:

"What's past is past". I wish the past can be forgotten that easily. Many will remember a letter written by Mr Lee not so long ago, just before the changes in law. This letter stated that if a certain quota is not reached by a certain date, John will resign. Obviously, that quota was not reached and John did not resign. That, to me, made me cautious about the trustworthiness of some people who wish to collectively sell our homes. The past, indeed, remains in the present.

I think John is making an incorrect comparison between BGV and BGM in his email. His own search, which you can do on the internet (see link below) would reveal three prices, two for BGM and one for BGV. These are:

BGM - Sold Mar 09 (downturn) - $883psf
BGM - Sold Sep 08 (boom) - $1356psf
BGV - Sold Sep 08 (boom) - $1470psf

In fact, if we compare BGM and BGV sold AT THE SAME MONTH (Sep 08), you'll find not a lot of difference at all ($114psf or <>

In other words, I would think his point is more "due to market forces" of boom, since both BGV and BGM were sold at about the same value, REGARDLESS of the en-bloc sale. After all, if logically, the 'en-bloc potential' means offering better value for the buyer, then wouldn't the price difference between the two estates be more than 10%? In fact, if you look at previous sales values from 2000-2004 (link provided below), you'll find that prices for BOTH BGM and BGV have matched and doubled from 2004 to 2008, without the need for any en-bloc potential. Also, any prudent buyer knows that 'en-bloc potential' means very little nowadays, given that it takes time to complete the sale, especially if it goes through court. And even then, it is no longer a certainty that a sale will be confirmed without potentially severe legal consequences, as recent court cases highlighted.

I'd say that unless John has definitive proof that our units 'will plummet' if the en-bloc 'is dead', I'd think about the past, and consider that he has a strong agenda to keep the en-bloc sale alive whatever the cost. Otherwise, the statement sounds like a threat done in bad taste.

I would even suggest that it is the well-maintained estate that we have that makes a difference between BGM and BGV. Something that I hope the current MC will continue to do well, and not let the illusion that an en-bloc sale means you are entitled to run down the estate.

http://www.ura.gov.sg/realEstateWeb/realEstate/pageflow/transaction/TransactionController.jpf
http://www.redas.com/HTML/eProperty/transaction_search.asp
(You may need to copy and paste the various lines for URA and REDAS.)"

Thank you to the person for the research he/ she has done, especially with regards to the incorrect comparison that was done by Mr Lee which would otherwise be misleading BGV owners and SPs.

Email Received: Which hat is he wearing? And a Reasoned Response to Market Forces vs Enbloc Potential

We received this anonymous email, that we're posting here verbatim below, and someone submitted a comment which is a reasoned response to Mr John Lee's latest email with the BGM/BGV price comparison (under comments):

I’m confused when I received Mr Lee's recent letter about the AGM.

Firstly, he wrote that Mr Tan Lai Huat’s resolution was not approved by the council. Isn’t Mr Tan Tew still the chairperson of the management council? Since when did Mr Lee become the spokesperson for the entire council when he is only a member?

Secondly, he said that the resolution is an en-bloc matter and nothing to do with estate management and urged owners who support the en-bloc to pass him their proxies. He signed off his letter as Chairman, Collective Sales Committee (CSC) and the letter was sent using BGV En-bloc letterhead.

I’m confused:
Mr Lee firstly objected to the resolution because it is an en-bloc matter which should not be tabled at the forthcoming AGM and he seemed to be speaking on behalf of the council. But he then objected to the resolution because he asserts it is Mr Tan's "cunning way of killing off the current enbloc attempt."

So in what capacity is Mr Lee objecting in - as an ordinary Council member who is working on behalf of all owners to manage BGV or as Chairman of the CSC who is working to sell off the estate?

The answer seems quite clear. And what is the view of the MC Chairperson on this matter, or has Mr Lee taken over this other committee too?

Time to take Action

Dear Fellow Owners and Residents of BGV,

Mr Lee sent an email to some owners on 10 June and later by post, the same email was sent to all owners on 11 June. Mr Tan was forwarded Mr Lee's email on 10 June itself and he responded to Mr Lee's email in his letter which has now been sent to all owners and residents of BGV on 11 June. Below is Mr Tan's letter (which was written before Mr Lee's email came in through the post) in response to Mr Lee's email dated 10 June. Mr Tan's letter is reprinted with his consent.

11 June 2009

Dear fellow owners,

Please give this letter your urgent attention, as it involves your interests as a subsidiary proprietor of Botanic Gardens View.

I have just been forwarded a copy of an e-mail from John Lee dated 10 June 2009. This e-mail appears to have been only sent to selected owners, and not to all. In fact, it was not even sent to me, even though several questions raised by John Lee in it are, somewhat misleadingly, directly addressed to me. I am not sure if the selected owners who were sent this e-mail were aware that it was not even sent to me in the first place.

As John Lee's e-mail deals with a resolution which has been tabled for the upcoming AGM on 20 June 2009 pursuant to my request made in June last year, and which I strongly feel is in the interests of all subsidiary proprietors, I have set out his e-mail in full below, with my responses set out in italics below the relevant paragraphs.

In summary, I feel it is in the interest of every subsidiary proprietor to be protected from any liability or damages which may be caused by the actions or inactions of the collective sale committee, by getting an indemnity from the collective sale committee. Otherwise if anything adverse happens, we as subsidiary proprietors will have to bear the consequences ourselves. The Horizon Towers case is a case in point. There, through no fault of their own, the owners had to suffer months of legal proceedings and incur very substantial personal legal costs, without any contractual recourse against their collective sale committee.

My view is that if the collective sale committee wishes to impose a relationship under which they take on the power to sell my personal property, especially one as valuable as my apartment, the terms of such a relationship have to be very clearly set out and have to be acceptable to me, and should provide sufficient protection to me in case I suffer any liabilities or incur any obligations due to their actions or inactions in the course of that relationship. The same should apply to each and every subsidiary proprietor.

I would be grateful if you could take the time to consider this very important issue, which I believe affects your own interest as a subsidiary proprietor, and take the necessary action immediately:

John Lee's e-mail of 10 June 2009, and my response in italics

"Dear Owners of BGV,

I refer to the above resolution tabled by Mr Tan Lai Huat for our forthcoming AGM.

This resolution was allowed by the Managing Agent but not approved by the Council. The Council had its final meeting on 8th May 2009. This resolution was not surfaced at that meeting to allow the Council to discuss the merit of allowing this resolution at the AGM. Council Members only received an email from the MA informing them that this resolution will be included in the agenda after the meeting.

This resolution is a Collective Sale matter and has nothing to do with the Management of the estate. It should have been brought up at the appropriate forum. Also the subject matter of the resolution had been fully discussed and recorded in the last AGM (Appendix B in the current AGM Notice pages 10,11,12,13). It is a waste of members' time to rehash the whole issue once again."

Response:
By way of my e-mail dated 5 June 2008 (i.e. last year) to the Secretary and Chairman of the Management Council and to the Managing Agent, I had originally asked for this resolution to be circulated to all owners and tabled at the next duly-convened general meeting, This was pursuant to the relevant provisions of the Building Maintenance and Strata Management Act ("BMSMA").

However, the resolution was not circulated or tabled for the AGM last year or the EGM held on 23 August 2008, as the response from John Lee and the Managing Agent was that the EGM was convened by requisition of the en bloc collective sale committee ("CSC") and its supporters, and the BMSMA did not require such a resolution to be circulated and tabled for such EGM.

Having blocked the circulation and tabling of the resolution at that EGM, which would have been a good forum to discuss the issues raised, John Lee now says that this resolution should have been brought up at the relevant EGM and not at the upcoming AGM as it has "nothing to do with the Management of the estate"!

This is incorrect both factually and in point of law. Factually, because I had in fact asked for the resolution to be tabled last year, but was blocked from doing so. In point of law, because the BMSMA requires any resolution brought up by a subsidiary proprietor in accordance with the BMSMA to be duly circulated to all subsidiary proprietors and tabled at the relevant general meeting. It has taken more than one full year for the resolution to be circulated and tabled for consideration by the subsidiary proprietors.

Based on John Lee's arguments, this resolution would never be circulated or tabled at any general meeting at all, as it would not be tabled at an EGM requisitioned by the CSC, and neither would it be tabled at an AGM. In this case, it appears that the circulation and tabling of the resolution was not "approved" by the Management Council, but it should be noted that such approval is not required under the BMSMA as the process is mandatory.

It should be noted that the resolution was not "fully discussed" at the AGM held on 7 June 2008, and it could not have been so discussed, in the absence of the requisite circulation and notice of the resolution to all subsidiary proprietors. The Managing Agent has acted in compliance with the BMSMA to circulate and table the resolution for the upcoming AGM, for proper discussion and resolution by the general meeting.


"Mr. Tan's resolution requires the PERSONAL INDEMNITY, jointly and severally, of the Chairman and all the members of the Collective Sale Committee (CSC). This has never been done before in all en bloc sales in Singapore. Let me ask Mr. Tan this question "In all his (previous) career as a lawyer, has any of his clients requested him to give them an indemnity before he can act for them? If not, why is he requiring the CSC members who are all volunteers to give their indemnity?"

Mr Tan's resolution is a very cunning way of killing off the current en bloc attempt whilst we wait for the market sentiment to improve. If Mr.Tan and his anti-enbloc friends gather enough proxies and passes this resolution, all the CSC members will refuse to give in to this ridiculous request (for their personal indemnity) and will resign instead. This will effectively kill the current en bloc sale of our estate."

Response:
In my 20 years or so of legal practice prior to my retirement, I have never had a client ask me for an indemnity. This is because it was unnecessary - the relationship of solicitor and client is both a contractual and fiduciary one, and the law is clear on the duties, liabilities and obligations owed to the client in such a relationship. Quite apart from that, there is also mandatory professional insurance to protect the client in the appropriate circumstances.

However, the relationship between the subsidiary proprietors and CSC members is a very different one. For one, not all subsidiary proprietors agree to the the appointment of the CSC to act on their behalf to sell their apartments, or the terms on which the CSC members have appointed themselves, or the terms of the sale agreement itself.

Secondly, and more importantly, the parameters of the duties, obligations and liabilities of the CSC members to the subsidiary proprietors have not been clearly established in law, although the recent judgement of the Court of Appeal in the Horizon Towers case has gone some way towards clarifying the position.

Thirdly, even if the CSC members regard themselves as "volunteers", their actions create liabilities and legal obligations on the part of subsidiary proprietors, as they act on behalf of the subsidiary proprietors in a fiduciary as well as contractual capacity. This is especially so where the subsidiary proprietors sign the collective sale agreement (and even where the subsidiary proprietors do not sign the collective sale agreement, they may still become subject to it if so ordered by the Strata Titles Board).

In this respect, subsidiary proprietors should note that in the collective sale agreement, the CSC has not only refused to provide an indemnity to subsidiary proprietors, but have instead provided for the subsidiary proprietors to indemnify the CSC, as well as to excuse the CSC from their liabilities to the subsidiary proprietors! At the appropriate time, subsidiary proprietors should require these provisions to be removed and replaced by an indemnity in their favour, regardless of the outcome of the resolution in this case.

Personally, my view is that if someone wants to impose such a relationship under which he takes on the power to sell my personal property, especially one as valuable as my apartment, the terms on which such relationship are to be established have to be very clearly set out and have to be acceptable to me, and should provide sufficient protection to me in case I suffer any liabilities or incur any obligations due to his actions or inactions in the course of that relationship.

There are therefore good reasons to require an indemnity from the CSC members. Regardless of whether they regard themselves as "volunteers" or otherwise, their actions will create real liabilities and obligations on the part of the subsidiary proprietors. The facts of the Horizon Towers case speak for themselves. I am sure the subsidiary proprietors in Horizon Towers would have dearly loved to have had the protection of an indemnity from their CSC members, after having undergone many agonising months of legal actions and incurring substantial legal costs personally.

Just because something has never been done before does not mean that it should not be done in future. We should learn from the mishaps of previous en bloc sales and take the necessary action to protect our own interests as subsidiary proprietors.

If the consequence of the resolution being passed is that the CSC members will choose to resign instead of taking full responsibility for their actions, that is entirely a matter for the CSC members to decide. In terms of timing, as I have pointed out above, I had asked for this resolution to be tabled more than a year ago.


"Let us now examine Mr. Tan's resolution to see whether it is more bark than bite? As is usual with some lawyers, they love to pick on something insignificant and irrelevant and blow it up into something that can be potentially catastrophic. At the centre of Mr Tan's resolution is his gripe that the AGENDA for the first collective sale EGM held on 12th January 2008 was not properly drafted by a lawyer which could potentially lead to disastrous consequences as elaborated by him. I attach the relevant AGENDA of the 12th January 2008 Notice of EGM (Please refer to attachment 1). Mr Tan, please tell us which of the 5 Agenda items do you consider defective and could potentially be hazardous to those who sign the CSA. Let us be specific and tell us how and why? If you are not able to answer our simple question, then you are guilty of making a mountain out of a molehill and using scare tactics to prematurely bring an end to the work of the en bloc committee."

Response:
Whether there are appropriate grounds to challenge the original appointment of the CSC and the subsequent actions of the CSC are for a court of law to judge. My point has consistently been that if the collective sale is challenged and subsequently set aside, whatever the basis, then all subsidiary proprietors (and especially those who sign the collective sale agreement) should require that they have satisfactory protection from any liabilities and obligations which they may become subject to by reason of the collective sale and the actions of the CSC. If John Lee has full confidence that the appointment and actions of the CSC will be upheld in any event, then he should have no problem providing the indemnity to the subsidiary proprietors.


"Finally, let me urge all owners who support the ongoing en bloc effort to attend the meeting to vote against Mr Tan's resolution. If you are unable to attend the meeting, please give your proxy to me (see attachment 2) or anyone of the current CSC members (listed above). Please confirm with them that they are able to attend the meeting also.

With best wishes,
John Lee
Chairman,
Collective Sale Committee"

Response:
As in previous EGMs, John Lee is again seeking proxy votes to support his own interest in the collective sale. As I have mentioned, I have proposed the resolution primarily to protect my own interest, but I feel it is also in the interest of ALL subsidiary proprietors, whether you support the en bloc sale or not. I would urge you to please obtain your own legal advice on this, for your own peace of mind, and attend and vote at the AGM accordingly.

If you wish to support the proposed resolution, but are unable to attend the AGM or are unsure of your attendance, you may wish to appoint me as your proxy for this purpose, by depositing your duly-signed proxy form in the letterbox at Block x, #xx-xx by 17 June 2009 (as the deadline for depositing the proxy form with the Management Council is 2 p.m. on 18 June, 2009). If you do in fact attend the AGM, the proxy will automatically become void by law, and you will be able to exercise your own vote at the AGM.

In any case, please consider the issues carefully and take such action as you think fit to protect your own interests. Thank you for taking the time to read this.

Yours sincerely,

Tan Lai Huat

To reiterate Mr Tan's concern, regardless of whether you are for or against the BGV enbloc, we as subsidiary proprietors, should protect our own interests as no one, including the CSC members, can do that for us. The Horizon Towers case is a lesson for all of us. In Mr Tan's words, "We should learn from the mishaps of previous en bloc sales and take the necessary action to protect our own interests as subsidary proprietors".

It is time to take action.

Tags: bgv, botanic garden, botanic gardens, botanic gardens view, condo, en bloc, en-bloc, enbloc, collective sales, collective sales committee, csc, sales committee, AGM, EOGM, subsidiary proprietors

Letters, Truths, ACTION!

After Mr Tan L. H.'s letter (dated 15 August), Mr John Lee sent out via email his rebuttal of the points mentioned in Mr Tan's letter on 20 August. For the benefit of all, we have put up Mr Lee's email on scribd. Below is Mr Tan's letter in response to Mr Lee's email of 20 August. Mr Tan's letter has been sent to all owners and residents of BGV on 21 August.

"21 August 2008
Dear fellow subsidiary proprietor,

In response to my letter dated 15 Aug 2008, John Lee has sent an e-mail dated 20 Aug 2008 to various parties. In his e-mail, he makes certain statements which are clearly incorrect and misleading, and which I feel I need to set the record straight on. My comments are set out in italics below John Lee's statements:

1. He says that my "letter contain (sic) misleading information which needs to be corrected. He is writing like he is protecting the interest of the owners, but he is in fact trying to create doubts in your mind about the integrity and rectitude of the Collective Sale Committee."
My comments: My letter makes it very clear that it states my own concerns and suggestions in relation to the formula for allocation of sale proceeds and the terms of the Collective Sale Agreement. As I emphasised several times in my letter, each owner should consider his own circumstances and take independent advice. I certainly did not claim to be protecting the interests of the owners. And I certainly did not say anything at all about the "integrity and rectitude" of the Collective Sale Committee anywhere in my letter, which touches solely on the issues involved.

2. John Lee says that "*The formula for apportionment of the sale proceed has been changed.* This is true. The Sale Committee found the previous method of apportionment (of 1/3 area, 1/3 share value and 1/3 valuation) to be cumbersome and complex. It raises more questions than answers. The valuation component can be challenged - e.g. why this valuer and not that valuer or why not 2 valuers instead of 1 valuer or will valuation done at the beginning of the en bloc still be applicable at the end of the en bloc (a period of 12 - 24 months)? The Sale Committee decided to use a straight ratio of area vs share value to avoid controversy and overcome complications. The ratio of 70% area and 30% share value was chosen because 1) it is the closest to the previous method under current valuation 2) as advised by the Consultant, it will pass the equity test of the Strata Title Board 3) it is used by other condos with the same configurations, i.e. 1 share value for differing sizes of the units and 4) this formula has been upheld by the High Courts in the case of Holland Hill Mansion."
My comments: is it true that the ratio of 70/30% is "the closest to the previous method under current valuation", and what exactly does that mean? The critical question is why was this new ratio chosen, when the previous sale committee - which John Lee chaired - applied the previous formula which is now lightly dismissed as "cumbersome and complex"? Which formula is in the best interests of subsidiary proprietors? And why 70/30% instead of 50/50%? John Lee should explain what has changed since the previous attempted en bloc sale to justify such a change.

Further, is John Lee saying that the Consultant has guaranteed that the 70/30% formula will be approved by the Strata Titles Board? If so, this should be obtained in writing from the Consultant, and incorporated in the terms of the agreement with the Consultant.

He should also let us know which successful en bloc sales "with the same configurations" applied the 70/30% formula.

And speaking of being misleading, in fact, in the Holland Hill Mansion en bloc sale that he mentions, the statra area/share value formula was indeed upheld by the Strata Titles Board, the High Court and the Court of Appeal - but the ratio applied was 50/50%, and not 70/30%!

3. John Lee said: "He says: "*There is no protection in the CSA for you as a subsidiary proprietor*.... and the case of Horizon Towers is again mentioned. It is true that the owners of Horizon Towers who signed the CSA were sued by the Purchaser to honour the Sale and Purchase Agreement. If you recall, the consenting owners at Horizon Towers changed their minds about selling their property after they have entered into a contract with the Purchaser, when they realised that a neighbouring property was sold for twice what they got for their property. Of course, the purchaser has the right to enforce their contractual rights under the terms of the Sale and Purchase Agreement. Will this be repeated in BGV? Not likely if consenting owners do not change their mind after entering into a contract."
My comments: Another misleading statement on John Lee's part. The majority owners in Horizon Towers were not sued because they "changed their minds". They failed to comply with certain legal requirements in their submission to the Strata Title Board, and the buyer sued on the basis that the sellers had failed to perform their contractual duty to make a proper application. Whether or not this was based on a change of the majority sellers' minds is an inference from the facts.

So the real question to be asked is, if the CSC makes a faulty application or some other mistake in the sale process, leading to the owners being sued, what recourse would the owners have against the CSC? As the CSA is currently drafted, none. Not only that, the CSA provides that the owners indemnify the CSC - in 2 clauses, no less (clause 6.1.38 and clause 10.3)! Why should the CSC not be held liable for their actions, when they are acting as agents and fiduciaries in relation to valuable properties? Why should the owners indemnify the CSC?

As an aside, it is unclear why there should be 2 indemnity clauses. And it should be noted that though the indemnity in clause 6.1.38 is at least limited to acts of the CSC "in connection with" the CSA, the Collective Sale and applications to the Strata Title Board, there is no such limitation in clause 10.3. So theoretically under clause 10.3 the owners indemnify the CSC against "all actions, costs, expenses, damages and claims" whether or not related to the CSA or the Collective Sale. How can this be acceptable to owners?

4. John Lee says: "*There is no provision for a performance bond from a bank to guarantee that the buyer will complete the sale and make full payment of the sale proceeds*. If Mr Tan is correct, then he should show us a Sale & Purchase Agreement with such a preposterous provision. No Developer will accede to this demand. It has not been done before and it will never be done ever. Our protection is in the 5 - 10% deposit placed with our solicitor, which will accrue to the owners in case of a default, and the advice of our Consultants on the bona fide status of the purchaser.
My comments: I have said in my letter that we are likely to be told it is not market practice. But that is no reason why we should not have a performance bond if the purchaser is really keen to buy our estate. Market practice has to start somewhere, doesn't it? And should we not learn from the lessons of other estates whose purchasers pulled out of their enbloc sales, to begin a market practice that protects us? The deposit is insufficient protection, as the potential damages for an owner who has contracted to buy another property may be much larger than his share of the deposit. I believe this is what happened in the aborted en bloc sales earlier this year.

In any event, if the purchaser is bona fide and does not intend to default, then it should have no problem giving the bond. But my point is that no one can say for certain that a seemingly strong company will not collapse - look at Bear Stearns and Enron, just to name 2 of the largest, most successful corporations that have collapsed without warning. The CSC should in fact be the party insisting on this in order to protect all owners' interests, and not say that "it has not been done before and will never be done ever". Is this indicative of how the CSC will be negotiating to protect owners' interests?

5. *He says: "The power of the CSC to enter into a sale below the reserve price, and other important terms of the sale, should be subject to approval of the subsidiary proprietors. *It is misleading and mischievous to suggest that the CSC can enter into a sale below the reserve price without the approval of the subsidiary proprietors. Clause 4 - Sale Terms Reserve Price: $630,000,000/ Higher if increased with the Sale Committee's approval and Sellers are deemed to agree to such increase. If the proposed sale price is less than the Reserve Price, the Sellers' Approval is required before accepting such lower sale price. Sellers' Approval is defined in Clause 11 of the CSA as "the approval of sellers constituting at least 80% of share value and at least 80% of the strata title area of all units". Similarly the terms and conditions of the CSA cannot be changed willy nilly without the approval of the owners.
My comments: if John Lee had read the letter carefully, he would have seen that I was referring to changes in the terms of the sale and purchase agreement to be entered into with the buyer, not the CSA. Under the CSA, the committee is empowered to change the terms of the sale and purchase agreement. And what is wrong with saying that if the CSC wants to enter into a sale below the reserve price, it should get the owners' approval? In fact, this should be done before any such sale is entered into, with clear explanations why the CSC recommends such action, and why the reserve price cannot be achieved.

Further, it is unclear how and when each owner's decision whether to agree to the sale below the reserve price is to be ascertained, and what time period an owner is given to make such a decision. In all, the mechanism for a sale below the reserve price is unclear, and owners would do well to ensure that it is clearly specified if they agree at all to such a provision. It could be said to look like advance preparation for a sale below the reserve price. Is there something owners should know about now?

In fact, having taken a closer look at the CSA, clause 5.6 does purport to give the CSC the power to change both the CSA and the sale and purchase contract willy-nilly, subject only to what is stated in the CSA and the law requiring Sellers' Approval!

6. John Lee says: “He is also trying to collect as many proxies as possible to influence the outcome of the EGM in his favour. Do not be misled and confused by him.”
My comments: In fact, it is John Lee and his CSC members who have been collecting proxies all along, making it appear like there is a majority in favour of the en bloc sale, when actually it is a minority. It just looks like a majority because this group of en bloc sale supporters attends and votes at the EOGMs, usually through proxies held by John Lee and his CSC members. So the end result is that resolutions passed at the EOGMs appear to be overwhelmingly supported, while in reality, the majority have not attended or voted.

Thus, I would urge all owners to attend the EOGM this Saturday, and all future EOGMs, so you can hear for yourself and make up your own mind about how the various issues raised above, and other issues that other owners raise at the meeting itself, will affect your own circumstances. Otherwise you leave your fate in the hands of a vocal, persistent minority who act with their own interests at heart.

Yours sincerely,
Tan Lai Huat
Blk x Taman Serasi #xx-xx
Singapore xxxxxx "


Below is a letter sent to our BGV email by an owner and the owner asked for the letter to be put on the BGV blog. We have reproduced it here for the benefit of all.

"21/08/2008
Dear Vanessa and Hwei Ming,

I’ve held back on making comments, but the latest email from John Lee about Tan Lai Huat has really infuriated me. Just as John Lee has answered point by point, I want to bring to the attention of readers and owners these points he made:

1. “His letter contain misleading information which needs to be corrected”.

In fact, I believe the information he provided is not misleading, but enlightening. The points raised by John Lee in his rebuttal is incorrect, and I’m sure they will be brought up at the EOGM, which I encourage as many of you to attend. For example, he suggested comparing ‘two documents’. I suggest you compare the CBRE CSA and the Credo CSA to see the ‘great disparity’. When compared in terms of sale proceeds, owners from Blk 1 stand to loose over $100k under the new CSA! I guess it is purely coincidental that none of the CSC members own units in Blk 1 so will not face this loss.

2. “He is writing like he is protecting the interest of the owners, but he is in fact trying to create doubts in your mind about the integrity and rectitude of the Collective Sale Committee”.

This couldn’t be more obvious than the misinformation from the CSC’s own blog. For example, they stated clearly on their blog in response to the question: Can the reserve price be lowered after owners sign the CSA? Their answer was: “No. The reserve price is the minimum that owners agree to sell at. If the reserve price is not achieved, a sale does not take place”. I urge you to read clause 4.1.4 carefully to see if “a sale does not take place”. Such a clause about a lower sale price is not present in the CBRE CSA, but this just points out that the CSC is clearly preparing for a lower offer and is preparing to accept such a lower offer. Why else have this clause?

Some more “true facts” from their blog. In their “Timeline of Events”, they stated that in Jan 2008, “Owners present vote overwhelmingly in favour of formation of Collective Sale Committee”. Sounds like the entire estate is “overwhelmingly” for the sale, right? But actually, only 61 units out of 146 total attended and could vote. A total of ONLY 37% of the ENTIRE estate voted for the new CSC. That, my dear neighbours, is the “true fact”. A MINORITY GROUP has decided to push THEIR OWN AGENDA with no regard for the MAJORITY who are not keen on the sale.

And the most insulting, which many of you who received John Lee’s correspondence will remember, is now put up under “Alternative Places to Stay”. He has omitted certain sentences that were in his original letter, which I’ll now include, IN BOLD:

… It will not make much sense for us to sell our precious home and then splurge on a super luxurious home at 8Napier, Grange Residences, St Regis, etc. It will be plain stupid!

…Here are some estates where you can find homes with market value from $1-1.8 million: Normanton, Ridgewood, Pandan Valley, Pine Grove, Central Green, and many more in the east, west and central. Or, how about Punggol 21, the idyllic new town with shopping, nature, stream and MRT?

Some of the above estates are attempting to go en block, but they are not likely to succeed because they are huge estates, they have development charge issues, and most of them will not make it in time before the new Amendments become law.

Why did he omit these sentences? Because he called owners “stupid” just because we have a right to decide what kind of home we’d want to buy, luxurious or not. And how many of us were insulted that he would even suggest Punggol 21? I certainly do not see him moving out of his super luxurious home to this “idyllic new town”! And to add insult to injury, he suggests that we downgrade, downsize and move out of a perfect, central and beautiful location at BGV!!

3. “He is also trying to collect as many proxies as possible to influence the outcome of the EGM in his favour. Do not be misled and confused by him.”

Isn’t this the pot calling the kettle black? Isn’t he just as aggressively collecting proxies to influence the outcome of a general meeting? Didn’t he already achieve that, to great effect and to possible detriment of our estate, during our AGM when he steamrolled his pro-sale team into the management committee, courtesy of proxies?

I’m sorry but I’m quite disgusted by John Lee’s high and mighty attitude. Given his attitude, his bullish behaviour, his misinformation, I’m now greatly concerned that it is only one step away from our estate becoming like that of Laguna Park – with people living in fear of enbloc vandals who will not hesitate to bully the rest into signing the CSA.

At the end of the day, the only *TRUE FACT* is this – now is NOT the right time to sell. And unless we get rid of the CSC, our estate will be sold for less than what it’s truly worth.

A very disgusted owner
Name withheld for fear of vandalism. Not everyone parks near the guard house daily."

Dear Owner,
We thank you for your letter. We can understand your reason for withholding your name for fear of vandalism but we hope you can contact us as soon as you see this blog post. Thank you.

Tags: Botanic Gardens View, Taman Serasi, collective sale, collective sales, en bloc, en-bloc, enbloc, collective sale agreement, apportionment, proxy, EOGM, Letters to Owners, sale agent, sales committee

Time for ACTION!

Dear fellow owners and residents,

On 16 August, we received a letter by Mr Tan L. H., a resident staying here at BGV, in our mail boxes. He has sent his letter to all owners and residents, including those not staying at BGV. With his permission, we have reproduced his letter here in full for the benefit of all.


"15 August 2008

Dear fellow subsidiary proprietor,

I am a retired lawyer who has been living in this estate since 1991, and I was a Management Council member for a few years in the 1990s. I am writing to you in relation to the proposed EOGM on 23 Aug 2008, convened by the en bloc sale committee ("CSC") to approve the formula for apportionment of sale proceeds and the collective sale agreement ("CSA").

It is important to protect your own interest that you read this and take immediate action or obtain independent legal advice, as it would be too late to do so if the EOGM approves the proposed formula and CSA. This is regardless of whether you currently intend to sign the CSA or not.

Even if you do not wish to sign the CSA now, or are waiting to see whether you wish to sign it later, the terms of the CSA will be fixed upon approval at the EOGM and may become binding on you even if you do not sign, in the event that the Strata Title Board makes a binding order. These terms include the sale price, the reserve price, the formula for apportionment of sale proceeds to you (i.e. how much money you would get if the en bloc sale is successfully concluded) and other important terms such as when you have to vacate your apartment, and whether you get a share of the remaining management and sinking funds. Therefore if you do not act now, you may still become bound by the terms of the CSA which cannot be changed subsequently.

If you currently intend to sign the CSA, the above applies even more strongly, as you will become bound by the terms of the CSA as soon as you sign (unless you withdraw within the cooling-off period provided by the law).

I personally have several objections to the CSA, which may or may not apply in your case, as I understand that each of us has our own individual circumstances to consider. However, I would urge you to consider the following points, and take independent legal advice to protect your own position.

The objections and suggestions I have are as follows:

1. The formula for apportionment of sale proceeds has been changed from the one previously proposed by the previous collective sale committee. It is now skewed in favour of the units with the largest floor area, instead of that being in a one-third proportion as previously. The fact that all subsidiary proprietors have all along been paying in equal shares for maintenance fees and sinking funds is conveniently ignored. No reason has been given for this change, which benefits the owners of units in Block 9 the most. You should insist that the formula be in the same proportion as that previously used, or at least in a 50:50 proportion.

2. There are no protections in the CSA for you as a subsidiary proprietor if the CSC's actions cause you damage or loss. If you recall the Horizon Towers case, the owners who signed that collective sale agreement were sued for damages of about $5 million each, but had no recourse against their sale committee. That case was only resolved after a year-long court process involving large sums of legal costs and much stress and anxiety. This point is extremely important considering that you will be granting the CSC the authority and wide powers to act on your behalf in the sale. Even worse for you, the current CSA provides that the CSC is exempted from liability for their actions! You should require that indemnities from the CSC, collectively and individually, be inserted in the CSA to protect yourself, and that the CSC's exemptions from liability to be removed from the CSA.

3. There is no provision for a performance bond from a bank, to guarantee that the buyer will complete the sale and make full payment of the sale proceeds. This is important as developers normally incorporate a two-dollar company (without any financial resources of its own) to develop projects. Without such a performance bond, the developer could easily walk away from its obligations and liabilities to you as a seller. However, if you have contracted to purchase a replacement unit pending the completion of the en bloc sale , you will be stuck with contractual and financial liabilities in respect of that purchase. This has happened in a few en bloc sales earlier this year. You will probably be told that it is not market practice to provide such a bond. However, if a developer really wants to acquire our prime property, it should pay us the right price - our price - and comply with our requirements for our own protection. After all, our estate is in a totally unique and extremely valuable location - there is no equivalent to it in Singapore. You should insist that the CSA contains a requirement that a performance bond from an acceptable bank must be provided by the developer under the sale and purchase agreement.

4. The power of the CSC to enter into a sale below the reserve price, and other important terms of sale, should be subject to approval of the subsidiary proprietors. Under the current CSA, the CSC can decide, for example, to change the sale price, or change the time for vacant possession without such approval. Changes in the sale price are obviously very important as they affect the amount you may get in a sale. As for vacant possession, this would have important implications for families who need to make arrangements for school-going children, or who need to find alternative accommodation (obviously, this does not affect subsidiary proprietors who do not actually live in the estate). Changes in other terms would obviously have different effects, depending on the terms and the changes made. Are you comfortable enough with the CSC that you trust them to take such decisions on your behalf and in your best interests? It is always possible that other owners would rather make a quick sale at any price which makes them sufficient money to cover their own investment, which may differ from yours. You should require that the CSC obtains the approval of the subsidiary proprietors for any changes in the terms of the sale and purchase agreement from those specified in the CSA.

Aside from the above, you should study the CSA carefully and take independent legal advice if you need to. It will be too late to do this after the CSA is approved by the EOGM.

If you are unable to attend the EOGM but wish the above points to be raised on your behalf, I would be willing to act as your proxy for the EOGM. If so, please drop the duly completed and signed proxy form (or if your unit is owned by a company, the letter of authority) in my letterbox (at Block 1, Taman Serasi, #xx-xx) by Wednesday, 20 Aug. The proxy form and letter of authority are enclosed with the Notice of EOGM sent to you earlier by the MCST. If you change your mind and choose to attend the EOGM after the proxy form has been lodged, your attendance at the EOGM will, under the law, automatically cancel my appointment as your proxy.

Without sufficient votes, whether by proxy or by your attending the EOGM, it is highly likely that that the matters above will not be resolved in your favour.

Please take action before it is too late to protect your own interests. If everyone thinks that someone else will do the necessary, then the CSC will get their own way easily. This has happened in the last few general meetings when they obtained proxy votes to pass resolutions as they wished. Please think very carefully before you give your proxy vote to the CSC members, or leave the en bloc sale process entirely in their hands - will they act in your best interest, or in their own interest, bearing in mind that each owner has his own individual circumstances to consider?

Thank you for taking the time to read this. Please feel free to contact me (xxxxxxxx) if you wish to discuss the above. If I am not available, please leave a message and your contact number, and I will contact you as soon as I can. You can also e-mail me at: bgvresident@gmail.com

Yours faithfully,

Tan Lai Huat
Blk 1, Taman Serasi, #xx-xx
Singapore xxxxxx"


As this is a public forum, we have removed Mr Tan's phone number and address. For those of you staying at BGV, you can refer to Mr Tan's letter for his contact details. For those of you owners not staying at BGV (you would probably receive your letter by Monday or Tuesday), you can email him at bgvresident@gmail.com or email us at enbloc_bgv@hotmail.com and we will put you in touch with Mr Tan.


We will like to re-emphasize Mr Tan's last point:
PLEASE TAKE ACTION BEFORE IT IS TOO LATE. Whether you are for or against the enbloc, you have to take action to protect your own interest. Especially for those of you who wish to continue calling BGV your home, APATHY is NO LONGER an option.

Tags: Botanic Gardens View, Taman Serasi, collective sale, collective sales, en bloc, en-bloc, enbloc, EOGM, collective sale agreement, sale committee, proxy

Thoughts on the AGM

We apologise for the lack of updates since the AGM due to a technical glitch on our blog. But in the meantime, we received an email from a concerned resident who attended the AGM and wished for us to put the email on the blog. This concerned resident has raised pertinent issues.

"At the AGM on 7 June, John Lee and 2 other members of his collective sale committee (CSC) were elected as Management Council (MC) members, together with 2 others nominated by John Lee, presumably supporters of the en bloc sale.

This was a result of John Lee and the CSC gathering a large number of proxy votes. Thus, the new MC for the estate comprises of John Lee and 4 of his CSC members and supporters, i.e. 5 out of the total of 7 positions on the MC!

It should be noted that of those 5 nominated by John Lee and a Mr Soon (who was in the previous Pro-tem sales Committee), only John Lee and one other MC member, Ms Leesa Lovelace, actually attended the AGM - the others were all absent. And it appears that Ms Lovelace left the AGM before the elections were conducted. We only have John Lee's word that they had consented to their nomination for election to the MC.

If they did not even bother to attend the AGM (or in the case of Ms Lovelace, stay for the entire AGM), how much interest will they have in running and maintaining the estate in the best interests of the residents and subsidiary proprietors? How much attention will they pay to the needs of the estate?

Although an objection was raised by an owner at the AGM that there was a clear conflict of interest in having CSC members also sitting as members of the MC, this was brushed aside and John Lee and his CSC members and supporters were voted into the MC with the help of their proxy votes.

But, if I were one of John Lee's CSC members elected into the MC, I would be very hesitant indeed to take his word that there is no conflict of interest, just because he says so.

In fact, I would be rather concerned as to my own position. To an objective observer (as a court of law will be) it is very clear that the interests and duties of the CSC members are very different from, and clearly conflict with, those of the Management Council. If I were in their position, I would certainly seek independent legal advice on this point, before I get myself too deep into a hole.

And what hole would I be getting into? The CSC members would do well to bear in mind that they will have onerous contractual, common law and fiduciary duties to the subsidiary proprietors who sign the collective sale agreement as well as those who may become bound by it. At the same time, if they take up their positions as MC members, they will be subject to onerous statutory and common law duties owed to all the subsidiary proprietors who make up the MCST.

Each of them may therefore find themselves liable for damages to the subsidiary proprietors who sign the collective sale agreement, or to the subsidiary proprietors who comprise the MCST, or even to both sets of subsidiary proprietors, in respect of their actions and decisions while sitting on both the MC and the CSC.

They can be assured that their actions and decisions as MC and CSC members will be scrutinised very carefully, and that they will individually and collectively be held accountable for any breaches of their duties.

I hope each of them has the resources to meet such liabilities in the event that they arise, as these may well be substantial. In any event, they should consider their individual positions very carefully.

Thus, if I were one of them, I would not be too quick to celebrate my election into the MC. Now every decision made at CSC meetings as well as MC meetings will be fraught with peril, as the possibility of breaching one or the other of their conflicting duties and liabilities will always be present. John Lee may well have made the position of these CSC members untenable and certainly unenviable.

They can also be assured that there are subsidiary proprietors who are prepared to take them to the very last stage of legal proceedings in the event of any breaches or if any damages are suffered by subsidiary proprietors due to their actions or decisions while sitting as members of the MC or the CSC.

They should therefore not be too happy about having secured 5 out of the 7 positions on the MC, and think that with such an overwhelming majority, they can make decisions without due regard to their individual and collective duties and liabilities. Subsidiary proprietors will be watching their actions very, very carefully.

Finally, to those who gave their proxy votes to John Lee or other CSC members, I think you have done yourself, and the other subsidiary proprietors, a real dis-service.

You might think that having loaded the MC with CSC members and en bloc sale supporters will be advantageous to you. However, as mentioned above, that will not necessarily be the case, as it may do more harm than good.

And if you think about it carefully, what happens to your property value if the en bloc sale does not succeed in the end or is successfully challenged, and in the meantime, the MC has run down the estate deliberately or by inaction or negligence? Don't forget that John Lee has failed in his en bloc sale attempt made at the height of the property frenzy last year, and that the property market has soured considerably since then.

Even if you don't live here and have rented out the place or are keeping it for investment, your long-term rentals and investment value will be adversely affected. How will you recover your losses then, and who will you look to, to make good your losses?"

There is certainly a lot of food for thought raised by concerned resident.