Glaring Questions

Many of you have received the Collective Sale Agreement (CSA) from CB Richard Ellis by now. Isn't it really nice that a full CSA, and not a draft, has been prepared and ready for signature collection without any consultation with all owners at all? Given that they are planning to sign the CSA on the same day they present it, it almost certainly means that the PSC will not be entertaining any amendments to it.

So here are some questions you can think about, and maybe even ask at the Owners' Meeting:

1. Who is the Protem Sale Committee? A list of 8 names are provided with their business credentials. But who wants to know how rich or high up the food chain they are? What is important to owners should be: (a) Is a member an OWNER-OCCUPIER (and how long they've stayed in BGV) or is he/she an OWNER-INVESTOR (renting out their units)? (b) What enbloc experiences have they had? The Horizon Towers fiasco (as documented in Dr Minority's blog) shows very clearly a slightest technical error can undermine the entire process, so you want people who are representing you and people who know about enbloc. Not just people who are keen to sell.
2. Why is the PSC not officially nominated and elected in an EOGM? This is a requirement in the new enbloc laws and the law states very clearly (no matter how the CSA writes it) that it will apply to all enbloc cases that have not achieved 80% when it becomes gazetted. So if the PSC is not formally elected in an EOGM, things get into trouble. Now what should be of interest to owners is WHY not hold an EOGM to present, nominate, second, and ratify the PSC? An Owners' Meeting to nominate the PSC is NOT the right place because it doesn't require that everyone is informed (an EOGM does that by law) and it doesn't require that everyone attend.
3. Why is the ending of the CSA in two parts - 6 mths after the first signature and the possibility to extend the expiry date up to 12 mths after first signature? Why have 6 mths there at all? Why not leave it at 6 mths to give everyone a peace of mind (if they cannot achieve 80% in 6 mths, then the whole thing is obviously not going to happen)? Yes, legally the PSC has 12 mths to collect the 80% but one would expect the whole point of having 6 mths there is so that people will not be left 'in limbo' over the whole enbloc process!
4. Why is the method of apportionment purely by unit size ONLY and not by other methods such as 50/50 mix of unit size and share value or other valuation methods? Unit size works if most units in BGV are similar-sized but we have a mixture. The current method gives advantage to the smaller flats (ave of $2700 psf) compared to larger flats (ave of $2300 psf). The method of apportionment also ignores the fact that when the flats were purchased, the higher the flat, the more expensive it was. Now, it doesn't matter if you have a ground floor flat or a top floor flat - everyone gets the same amount!
5. Why is there no mention of the sinking fund and what is going to happen to it? For that matter, will the sinking fund be 'locked aside' which means any urgent repairs may not be possible during the entire 22 mths of enbloc process?
6. What happens if a 2nd CSA which covers collective exchanges appear? Will a person who signs the first CSA be stuck and not allowed to sign the 2nd one, even if it is a better deal?
   

There are many other glaring questions about the CSA (eg success-based fees of agents, indemnity clauses, impending legislation, RP/CSA revisions etc). It just shows that there is still a lot of consideration to be made before we jump right into signing the CSA.

Remember - once you've signed the CSA you:

• lose all rights to object to the sale during the STB mediation/hearings.
  
• lose all rights to have a say in any RP/CSA revisions
  
• give up your rights to the sales committee who can make decisions for you
• give up your ability to sign another CSA that might come along, one that might offer a better deal (eg collective exchange, higher RP)
  

Tags: Botanic Gardens View, Owners meeting, collective sale, en bloc, en-bloc, en-bloc sale, enbloc, enbloc sale