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.
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