Conflict of Interest

Most of us, the residents of BGV would have received a document dated 18 June on the Resolution Passed at the 22nd AGM.

Under 4.0 Election of Council Members, we would see a list of 7 members who were elected as members to the Management Council. If you look very carefully, you would see that one of the names has appeared in another letter (sent to us on 14 March 2007 by CBRE) as one of the members of the Protem Sales Committee. Do you see a problem here? Let us explain.

The Protem Sales Committee (PSC) of BGV has been formed - members were self-elected, already bringing into question how many of them are truly for the interest of all the residents of BGV, or only serving their self-interest - to sell off our BGV as quickly as possible (refer to CBRE letter dated 22 May 2007: their timeline reflected the urgency with which they are trying to get a sale for BGV as soon as possible!). The Management Council (MC) is formed to monitor the funds collected by the managing agent of the property, to engage the agent to make repairs, upgrades, maintenance of the property, on behalf of all owners.

Here lies the conflict of interest when a member of the MC is also a member of the PSC because the mandates of the MC and the PSC are totally different!

"The mandate of the MC is to maintain or update/upgrade the development whereas the mandate of the SC is to sell off the development in whatever condition it is in, as quickly as possible". (Dr. Minority, 5 January 2007)

There are a number of consequences: (we have reproduced what Dr. Minority has so aptly described)

1. Because the MC (who is in most cases effectively the SC) is in charge of the maintenance fund of the condominium, they have a say in whether to use it to maintain the property or even to upgrade/update it. But because they are the SC, there is no incentive to maintain, to paint the exteriors, to make repairs, when their primary purpose is to sell the place off. Why waste that money if the buildings are going to be torn down? Effect - the place gets run down.


2. Because the place gets run down, the SC will tell owners of the downsides if the sale does not go through - increasing maintenance funds required to upkeep the place (which if they had maintained in the first place, would not have been a major issue), place getting more decrepit driving rental and property value down.


3. Because the MC is typically the first group to become aware of en-bloc potential for the development, they typically freeze any repairs, maintenance etc to push owners into selling. So they know that once the 10 year age mark is reached for the property, they need only 80% agreement for the sale to go through. In effect, they stop the upkeep of the property except for the bare minimum (eg security, electricity, sports facilities). Forget painting the exterior or interior, forget updating or upgrading the place, even if the MC has the sinking fund to do so.

Therefore, we believe that any member of the PSC should not and cannot be a member of the MC to ensure there is NO conflict of interest and to ensure there is neutrality and fair play in the enbloc. As such, one member of the PSC in our BGV MC is already one too many!

PS. We would like to acknowledge the fact that our past MC has been doing a great job in the upkeep of our BGV estate. Thank you. We hope the new MC will continue to do so.

(Thanks to Dr Minority for allowing us to reproduce portions of his Myth #2 post)