Letter to All Owners of BGV - 30 Aug 2007

This letter was sent out to all owners of Botanic Gardens View, dated 30 August 2007. We are reproducing the letter here.

Dear fellow owners of Botanic Gardens View,

We represent a number of owners do not wish to sell our apartments in an en-bloc sale. We do not refer to ourselves as “minority owners”, because we are not in the minority. Despite the pressure that has been brought to bear, there is no evidence that the majority of the owners, particularly the resident owners, actually wish to go against their own long-term interests and sell their apartments into an overcrowded market. This being the case, we ask our fellow owners, both resident and non-resident, to consider the following points:

1. At the meeting on 5 August, one of the Sales Committees presented a Collective Sale Agreement (CSA). We will not comment about the terms, since these are for each owner to consider. However, we would like to emphasise that a CSA is a binding legal document, with significant legal obligations and financial consequences for anyone who signs it. Signatories of the CSA give up important rights and acquire equally important obligations. As the Horizon Towers case shows, changing your mind after signing will entail a great expense of time and money. We would therefore urge all owners to take independent legal advice and consider carefully not only what is in the CSA but what is not, before they sign.



2. For our fellow owners’ consideration, we attach a table setting out some of the discrepancies we found when we ran the method of apportionment and calculation of the minimum sale price through a spreadsheet. We note various errors, from the simple calculation error on Schedule 3 (Error 4) to differences when the Sale Proceeds are calculated based on the defined apportionment ratio (Error 3) to a discrepancy of over $7000 (Error 1). We urge you to double check the figures yourself; enter the values as defined in Schedule 3 and 5 in a spreadsheet and ensure decimal values for apportionment ratio are set to 6 points as defined in Schedule 5. (The table is sent to all owners via post)
   



3. At the recent August meeting, it was suggested that owners who sell could buy replacement properties in developments such as Fontana Heights, Grange Residences, One Jervois, Regency Park, The Equatorial and Waterfall Gardens. Now, apart from the risk that these developments too will suffer an en-bloc attempt, the fact of the matter is that none of them offers the same combination of advantages that Botanic Gardens View has in terms of (i) location, (ii) size, (iii) layout, (iv) land-holding tenure and again, (v) location. Even if we were able buy any apartment in these developments (which is not guaranteed), we would inevitably lose out on at least one and possibly all of the above factors. We are in effect being told that in exchange for losing our property here we can pay out more and get less in return. There is no logical reason why we would wish to do that. Those of us who live here precisely because of this location will inevitably lose out, since it will not be possible for us to buy a unit in a redeveloped Botanic Gardens View. 8 Napier, the former Eng Lok Mansions, will be selling for S$4000 per square foot. There is no reason why a redeveloped Botanic Gardens View should be sold for a lower price. The reserve price proposed by the Sales Sub-Committee is certainly not going to cover that.



4. This leads us to our major point: We were told at the 5th August meeting that we should go for an en-bloc sale because the market may be reacing its peak and we will “miss the boat” if we do not sell now. We respect the professional expertise of the agents, and the opinions of the owners who wish to sell, but the truth is that their interest is in making the sale, rather than helping all owners to maximize their long-term benefits. The loss of amenity to the residents is not a factor for them, since it will not be a factor in the sale price. Before worrying about “missing the boat” we need to ask ourselves whether the boat’s destination is anywhere that we want to go to, and just as important, whether there will not be other boats in future. Given the number of developments that are now on the market for en-bloc sale, or which have already been sold, we also need to ask ourselves whether we are truly maximizing value by selling now into a market that is already loaded with properties, in which we might well be forced to reduce our reserve price even further in order to find a buyer. This would make no sense at all.



5. Property booms come and go. This one will indeed end at some time. So what? We are strongly of the view that Botanic Gardens View’s unique and irreplaceable location will ensure that its value will be maintained regardless of the property cycle. As one of the few remaining prime parcels in the centre of town, Botanic Gardens View would in fact be even better placed for the future. And in the meantime we residents will continue to benefit from its many and irreplaceable advantages. We should not let ourselves be pushed blindly into signing legally-binding documents without thought or professional advice.

Any owners interested in further discussion can contact us (Click on name to email):

(a) Vanessa Chan (Blk 9, #10-09)

(b) Wong Hwei Ming (Blk 9, #09-17)

or through this blog.

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