36 units signed as of 2 October 2010 making up 24.7% of total share values.
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Sunday, 10 October 2010
1st 4-weekly Notice
The CSC is required by law to put up a 4-weekly notice to update residents on the enbloc.
36 units signed as of 2 October 2010 making up 24.7% of total share values.
36 units signed as of 2 October 2010 making up 24.7% of total share values.
Wednesday, 15 September 2010
Outcome of 4 September EOGM
The method of apportionment in the BGV CSA was approved.
Total number of votes casted : 86 share values
Number of votes casted For: 51 share values
Number of votes casted Against: 35 share values
The terms and conditions of the CSA was approved.
Total number of votes casted : 82 share values
Number of votes casted For: 44 share values
Number of votes casted Against: 35 share values
The first signing started on 4 September after the EOGM.
Total number of votes casted : 86 share values
Number of votes casted For: 51 share values
Number of votes casted Against: 35 share values
The terms and conditions of the CSA was approved.
Total number of votes casted : 82 share values
Number of votes casted For: 44 share values
Number of votes casted Against: 35 share values
The first signing started on 4 September after the EOGM.
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Tuesday, 31 August 2010
Action Needed
Dear fellow owners,
The Sale Committee has now called for another EOGM, and is seeking proxies for its position. It would appear that they are determined to begin the collective sale process, starting off with an increase of the recommended Reserve Price (RP) to $xxx million (figures removed for confidentiality reason). This is despite some of the serious misgivings that we, and other owners, have raised in the last EOGM and through written feedback, all of which have not been addressed.
Before deciding whether to sign the Collective Sale Agreement (CSA), we urge you to consider the following issues:
1. All owners need to be aware of the contingency clause 4.1.4 which allows the Sale Committee to go for a lower sale price. In other words, it does not matter if the RP is $xxx million, or $xxx million (figures removed for confidentiality reason), or even $888 million. So long as the CSA gives the Sale Committee the power to accept a lower sale price, there is absolutely no guarantee to any owner that the amount stated in Schedule 2 (Method of Apportionment) is exactly what you will get.
2. While the contingency clause 4.1.4 might reflect ‘common practice’, it contradicts the very bullish and positive signals and rhetoric of the Sale Committee and ultimately expresses a lack of confidence in achieving the recommended RP of $xxx million. A more ‘realistic’ sale price might be offered to the Sale Committee, one that is far below $xxx million, and clause 4.1.4 gives the Sale Committee the power to accept such lower sale price. We have advocated the removal of Clause 4.1.4 from the CSA but this has been ignored.
3. We also questioned, during the last EOGM and via written feedback, the exact and detailed process by which clause 4.1.4 would be executed. What happens if a lower sale price is offered? How will owners be contacted? Who will be contacted? How will the signing of the supplemental agreement be conducted and for how long? What happens if 80% is not reached? Shouldn’t an EOGM be required? The actual process remains vague and ambiguous, which contrasts with the very precise legal nature of the rest of the CSA.
4. We understand that the proposed 60:40 method of allocation of sale proceeds is not acceptable to many owners, who want it to be on the basis of 50% strata area and 50% share value. This would be a fairer basis, as all owners have been paying the same amount towards maintenance and sinking funds all along, regardless of the size of their apartments. Again, this has been requested at the previous EOGM and in written feedback, but the Sale Committee has not acceded to owners' feedback.
5. Another major issue is the exclusion of liability and indemnity clauses in favour of the Sale Committee. These effectively provide that even if the Sale Committee makes mistakes or is negligent, it is excused from liability to the Sellers. If you sign the CSA, you will not be protected at all from any mistakes or negligence of the Sale Committee, and you will have to bear any losses or damages due to such mistakes or negligence yourself. For example, in the Horizon Towers case, when the owners who signed the collective sale agreement were sued for damages by the buyer, they had no recourse against the sale committee. We had previously asked for these provisions to be removed, for owners' protection.
These are very serious problems we have found with the CSA and with the collective sale process. We have repeatedly raised them to no avail. Whether you are for or against the sale is irrelevant when you consider the consequences of these 5 points in the event that a lower sale price is the best offer on the table, or when close legal scrutiny is made of the entire sale. If you agree with us - that the CSA is insufficient, that the conditions are not right, that you worry you might not get what is declared in the method of apportionment, that the method of apportionment of proceeds is not fair, or that there is insufficient legal protection for owners – and you are unable to attend the EOGM, then we request you respectfully to consider giving us your proxies for the EOGM. If you are unsure whether you will be able to attend the EOGM, you may wish to send us the proxy form first. In the event that you are able to attend the EOGM, your proxy will automatically be void by law, and you will be able to exercise your vote personally.
A proxy form is attached for your use. Please pass the completed and signed form to Mr Tan Lai Huat (at Blk 1 #xx-xx) or Ms Wong Hwei Ming (at Blk 9 #xx-xx) or to the Management Office at your convenience, but by no later than Wed, 1 Sep 2010 (as the forms have to be deposited at the Management Office by 2 Sep 2010).
Finally, we would respectfully urge that you take some time now to consider the effect of the CSA on your position and take any professional advice you deem appropriate, rather than wait and see what happens.
This is very important because although you may choose not to sign the CSA now, if the CSA is passed in its current form at the EOGM, and if it later becomes binding on all owners by reason of an order of the Strata Title Board, it will be too late to change any terms at that time. You will then become subject to all the terms of the CSA as it stands, including the sale price, the method of apportionment of sale proceeds, and the indemnity and exclusion of liability in favour of the Sale Committee. Please act now.
Thank you for taking the time to read and consider the points we have raised.
The Sale Committee has now called for another EOGM, and is seeking proxies for its position. It would appear that they are determined to begin the collective sale process, starting off with an increase of the recommended Reserve Price (RP) to $xxx million (figures removed for confidentiality reason). This is despite some of the serious misgivings that we, and other owners, have raised in the last EOGM and through written feedback, all of which have not been addressed.
Before deciding whether to sign the Collective Sale Agreement (CSA), we urge you to consider the following issues:
1. All owners need to be aware of the contingency clause 4.1.4 which allows the Sale Committee to go for a lower sale price. In other words, it does not matter if the RP is $xxx million, or $xxx million (figures removed for confidentiality reason), or even $888 million. So long as the CSA gives the Sale Committee the power to accept a lower sale price, there is absolutely no guarantee to any owner that the amount stated in Schedule 2 (Method of Apportionment) is exactly what you will get.
2. While the contingency clause 4.1.4 might reflect ‘common practice’, it contradicts the very bullish and positive signals and rhetoric of the Sale Committee and ultimately expresses a lack of confidence in achieving the recommended RP of $xxx million. A more ‘realistic’ sale price might be offered to the Sale Committee, one that is far below $xxx million, and clause 4.1.4 gives the Sale Committee the power to accept such lower sale price. We have advocated the removal of Clause 4.1.4 from the CSA but this has been ignored.
3. We also questioned, during the last EOGM and via written feedback, the exact and detailed process by which clause 4.1.4 would be executed. What happens if a lower sale price is offered? How will owners be contacted? Who will be contacted? How will the signing of the supplemental agreement be conducted and for how long? What happens if 80% is not reached? Shouldn’t an EOGM be required? The actual process remains vague and ambiguous, which contrasts with the very precise legal nature of the rest of the CSA.
4. We understand that the proposed 60:40 method of allocation of sale proceeds is not acceptable to many owners, who want it to be on the basis of 50% strata area and 50% share value. This would be a fairer basis, as all owners have been paying the same amount towards maintenance and sinking funds all along, regardless of the size of their apartments. Again, this has been requested at the previous EOGM and in written feedback, but the Sale Committee has not acceded to owners' feedback.
5. Another major issue is the exclusion of liability and indemnity clauses in favour of the Sale Committee. These effectively provide that even if the Sale Committee makes mistakes or is negligent, it is excused from liability to the Sellers. If you sign the CSA, you will not be protected at all from any mistakes or negligence of the Sale Committee, and you will have to bear any losses or damages due to such mistakes or negligence yourself. For example, in the Horizon Towers case, when the owners who signed the collective sale agreement were sued for damages by the buyer, they had no recourse against the sale committee. We had previously asked for these provisions to be removed, for owners' protection.
These are very serious problems we have found with the CSA and with the collective sale process. We have repeatedly raised them to no avail. Whether you are for or against the sale is irrelevant when you consider the consequences of these 5 points in the event that a lower sale price is the best offer on the table, or when close legal scrutiny is made of the entire sale. If you agree with us - that the CSA is insufficient, that the conditions are not right, that you worry you might not get what is declared in the method of apportionment, that the method of apportionment of proceeds is not fair, or that there is insufficient legal protection for owners – and you are unable to attend the EOGM, then we request you respectfully to consider giving us your proxies for the EOGM. If you are unsure whether you will be able to attend the EOGM, you may wish to send us the proxy form first. In the event that you are able to attend the EOGM, your proxy will automatically be void by law, and you will be able to exercise your vote personally.
A proxy form is attached for your use. Please pass the completed and signed form to Mr Tan Lai Huat (at Blk 1 #xx-xx) or Ms Wong Hwei Ming (at Blk 9 #xx-xx) or to the Management Office at your convenience, but by no later than Wed, 1 Sep 2010 (as the forms have to be deposited at the Management Office by 2 Sep 2010).
Finally, we would respectfully urge that you take some time now to consider the effect of the CSA on your position and take any professional advice you deem appropriate, rather than wait and see what happens.
This is very important because although you may choose not to sign the CSA now, if the CSA is passed in its current form at the EOGM, and if it later becomes binding on all owners by reason of an order of the Strata Title Board, it will be too late to change any terms at that time. You will then become subject to all the terms of the CSA as it stands, including the sale price, the method of apportionment of sale proceeds, and the indemnity and exclusion of liability in favour of the Sale Committee. Please act now.
Thank you for taking the time to read and consider the points we have raised.
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Saturday, 14 August 2010
Things to Consider
Dear fellow-owners,
1 In respect of the EOGM that Mr Lee of the Sale Committee is convening, we note that under the new amendments to the Land Titles (Strata) Act both (a) the terms and conditions of the Collective Sale Agreement and (b) the method of apportionment must first be approved by the EOGM before matters can move further. Since owners of both two and three bedroom apartments are represented among the contributors to this blog, we are, in the interests of fairness and transparency, not taking a position on apportionment. But we would urge you all to examine the apportionment methods that the Sale Committee proposes, and decide for yourselves whether you think they are fair to you, given the scale of your investment in your apartment in Botanic Gardens View.
2 As for the Collective Sale Agreement, we note that Mr Lee's call for an EOGM tried to imply that changes to the Collective Sale Agreement are being made to take account of the new regulations. This is of course debatable. As you will recall, the Sale Committee made changes to the Collective Sale Agreement quite a while ago, after the Horizon Towers judgement made it clear what happens to Sale Committees that act in bad faith. These changes were all to its own benefit and to the detriment of the signatories' legal rights. We are highly doubtful that they will have had the good faith to remove these changes. We therefore urge owners in Botanic Gardens View to consider (and if you support an en-bloc sale to reconsider) carefully, with appropriate legal advice, before agreeing to an en-bloc sale. Among other things, you may wish to ask your legal advisors to:
(a) advise you on the implications of the Sale Committee's power to sell below the reserve price,
(b) the requirement that the signatories indemnify the Sale Committee for their actions, and
(c) how and whether signatories can obtain appropriate protection from the Sale Committee for any losses you may suffer in relation to the en bloc sale.
The benefits of such a sale are illusory, except to the professional speculators, but the damage to our interests and living standards will be real, permanent and irretrievable. The easiest way to protect yourself is to simply refuse to either approve or sign the Collective Sale Agreement.
3 We think it helpful, for the benefit of any newcomers among us, to remind ourselves of the many reasons why this estate has specific reasons not to succumb to the Sale Committee's determination to sell:
The most important reason first. Where do we go?
Botanic Gardens View:
- is freehold
- is in District 10
- is next to the Botanic Gardens
- is next to a major hospital
- is five minutes from Orchard Road and
- has apartments that are very spacious and well-laid-out by current standards
No matter how high a price we get for our homes (and remember that under the most recent version of the Collective Sale Agreement, the Reserve Price may not be the price we sell at as there is provision made for a lower Sale Price), there is no way in the near or distant future that we will be able to afford replacement apartments with all these qualities. None of us will be able to afford to live in the city centre once we are driven from Botanic Gardens View. Most of us who live here do not own more than one property, unlike some members of the Sale Committee.
We have been told ad nauseum over the last few years that for the money we get we can buy brand new apartments with fancy facilities. It was seldom mentioned that at Singapore prices these would all have to be far away in outlying districts. We ask, and keep asking: why should we sacrifice everything that we have now for less? Small flats at higher prices, far from the centre, with far higher conservancy charges,with unnecessary facilities that most of us will not need or use but will still have to pay for? And it is clear that given the housing market in Singapore, most of us will not even have any nest-egg left over, once we have been forced to spend the proceeds of Botanic Gardens View on inferior, substitute accommodation.
4 As the above list reveals, Botanic Gardens View is a unique site. Its long-term value will not go down. Why should a developer reap the benefits of this? We know who will own our estate if we sell, and it will not be ordinary Singaporeans such as ourselves. We consider our homes here to be long-term investments, and we see no reason to throw them away simply so that quick profits can be made at our expense.
1 In respect of the EOGM that Mr Lee of the Sale Committee is convening, we note that under the new amendments to the Land Titles (Strata) Act both (a) the terms and conditions of the Collective Sale Agreement and (b) the method of apportionment must first be approved by the EOGM before matters can move further. Since owners of both two and three bedroom apartments are represented among the contributors to this blog, we are, in the interests of fairness and transparency, not taking a position on apportionment. But we would urge you all to examine the apportionment methods that the Sale Committee proposes, and decide for yourselves whether you think they are fair to you, given the scale of your investment in your apartment in Botanic Gardens View.
2 As for the Collective Sale Agreement, we note that Mr Lee's call for an EOGM tried to imply that changes to the Collective Sale Agreement are being made to take account of the new regulations. This is of course debatable. As you will recall, the Sale Committee made changes to the Collective Sale Agreement quite a while ago, after the Horizon Towers judgement made it clear what happens to Sale Committees that act in bad faith. These changes were all to its own benefit and to the detriment of the signatories' legal rights. We are highly doubtful that they will have had the good faith to remove these changes. We therefore urge owners in Botanic Gardens View to consider (and if you support an en-bloc sale to reconsider) carefully, with appropriate legal advice, before agreeing to an en-bloc sale. Among other things, you may wish to ask your legal advisors to:
(a) advise you on the implications of the Sale Committee's power to sell below the reserve price,
(b) the requirement that the signatories indemnify the Sale Committee for their actions, and
(c) how and whether signatories can obtain appropriate protection from the Sale Committee for any losses you may suffer in relation to the en bloc sale.
The benefits of such a sale are illusory, except to the professional speculators, but the damage to our interests and living standards will be real, permanent and irretrievable. The easiest way to protect yourself is to simply refuse to either approve or sign the Collective Sale Agreement.
3 We think it helpful, for the benefit of any newcomers among us, to remind ourselves of the many reasons why this estate has specific reasons not to succumb to the Sale Committee's determination to sell:
The most important reason first. Where do we go?
Botanic Gardens View:
- is freehold
- is in District 10
- is next to the Botanic Gardens
- is next to a major hospital
- is five minutes from Orchard Road and
- has apartments that are very spacious and well-laid-out by current standards
No matter how high a price we get for our homes (and remember that under the most recent version of the Collective Sale Agreement, the Reserve Price may not be the price we sell at as there is provision made for a lower Sale Price), there is no way in the near or distant future that we will be able to afford replacement apartments with all these qualities. None of us will be able to afford to live in the city centre once we are driven from Botanic Gardens View. Most of us who live here do not own more than one property, unlike some members of the Sale Committee.
We have been told ad nauseum over the last few years that for the money we get we can buy brand new apartments with fancy facilities. It was seldom mentioned that at Singapore prices these would all have to be far away in outlying districts. We ask, and keep asking: why should we sacrifice everything that we have now for less? Small flats at higher prices, far from the centre, with far higher conservancy charges,with unnecessary facilities that most of us will not need or use but will still have to pay for? And it is clear that given the housing market in Singapore, most of us will not even have any nest-egg left over, once we have been forced to spend the proceeds of Botanic Gardens View on inferior, substitute accommodation.
4 As the above list reveals, Botanic Gardens View is a unique site. Its long-term value will not go down. Why should a developer reap the benefits of this? We know who will own our estate if we sell, and it will not be ordinary Singaporeans such as ourselves. We consider our homes here to be long-term investments, and we see no reason to throw them away simply so that quick profits can be made at our expense.
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Monday, 15 February 2010
Problems of (In)Validity and (Un)Reliability with the CSC Survey Form
Dear Fellow Owners and Residents of BGV,
We are pleased that the BGV Collective Sale Committee has made one change in its proposed new draft Sale Agreement, to the apportionment method. As can be seen from the various blog posts highlighting the efforts that owners have taken to examine the CSA in depth, including various legal aspects of the contract, the CSC has nevertheless chosen to ignore most of their concerns with the proposed CSA. We wish to reiterate that the points listed here are not trivial matters but have legal and binding consequences for all owners.
Therefore, we wish to point out the following:
- There is still no guarantee that the BGV Enbloc Sale will sell at $xxx,000,000 (figure removed due to its sensitive nature). This is because of the clause in the CSA that allows the CSC to accept a lower sale price.
- There is ambiguity in the process of informing owners of a lower sale price and getting their approval, opening up the possibility of loopholes, abuse and a lack of transparency in how matters will be properly conducted.
- We now have three different apportionment methods offered to owners – (1) the CBRE’s 1/3 share values:1/3 strata area: 1/3 valuation; (2) Credo’s 70:30 method; (3) Credo’s revised 60:40 method. The latest revision seems to be an arbitrary one that does not seem to conform with the Singapore Institute of Surveyors and Valuers’ recommendations. No rationale is provided for the change in apportionment method, either.
- The revised CSA does not address the issue of adequate legal protections for the subsidiary proprietors and the MCST from liability and damage caused by actions of the CSC, as well as from non-performance by an intended purchaser. The recent law suit against the Horizon Towers CSC will serve as a reminder of the need for legal protection for all owners to be addressed.
- Lengthy discussions at the last EOGM and extended written feedback from owners have resulted in minor changes in the CSA and apportionment methods without addressing the serious concerns owners have. This raises the question of to what extent does the CSC take feedback from owners seriously.
We therefore strongly suggest that:
(a) the survey form be modified to include provision for the signature of all subsidiary proprietors of the unit;
(b) all survey forms that do not have the name(s), apartment number or signature(s) should be discounted; and
(c) the survey forms should be counted by the entire MC.
We understand that many people are concerned about the possibility of harassment if they reveal their views. The events in, for instance, Laguna Park, where pro-sale elements committed acts of criminal vandalism and then tried (unsuccessfully) to blame them on anti-sale apartment owners, show that this is not an unfounded fear. However, if strict security is maintained, and the Survey Forms are not revealed to anyone but the MC and the CSC, any act of harassment should be easily traceable and appropriate action can be taken.
We therefore urge the BGV Collective Sale Committee to take account of the above and (i) revise the new proposed draft CSA to address the feedback highlighted above and (ii) revise the Survey Form so that it is actually valid, useful and usable.
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Sunday, 7 February 2010
CSC Letter cum Survey
On 3 February, those of us staying at BGV received a letter from the BGV CSC. For those living off-site or overseas, they would have received the letter anytime from 4 to 9 February.
The letter from CSC is reproduced below.
The main points in the CSC letter are that:
1. The CSC has agreed to a marginal compromise with regards to the apportionment method in the CSA.
2. The CSC seeks to determine if BGV owners wish to continue or to call off the BGV enbloc sale via a survey.
While we applaud the CSC for wanting to hear from us owners with regards to our thoughts about the enbloc sale of BGV via the survey form, we have serious concerns with the validity and reliability of the survey form. We shall address our concerns in the next post.
The letter from CSC is reproduced below.
The main points in the CSC letter are that:
1. The CSC has agreed to a marginal compromise with regards to the apportionment method in the CSA.
2. The CSC seeks to determine if BGV owners wish to continue or to call off the BGV enbloc sale via a survey.
While we applaud the CSC for wanting to hear from us owners with regards to our thoughts about the enbloc sale of BGV via the survey form, we have serious concerns with the validity and reliability of the survey form. We shall address our concerns in the next post.
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Wednesday, 20 January 2010
Problems with a Lower Reserve Price
Here's another letter sent to the CSC with regards to the draft revised CSA. Names have been anonymised at the request of the authors.
31 Dec 2009
To the Collective Sale Committee and Credo Real Estate:
Dear Sirs/Madams,
I am writing on behalf of owner of Blk 1 of Botanic Gardens View, who has appointed me as representative on the matter of the collective sale of Botanic Gardens View (BGV).
During the Extra-ordinary General Meeting (EGM) dated 23 August 2008, I and others, have raised a number of critical issues that are seen to be highly problematic both in the collective sale process, and in the Collective Sale Agreement (CSA). Since then, an amended CSA had been sent out to all owners dated 18 October 2009. In the letter from the Mr John Lee, Chairman of the Collective Sale Committee (CSC), it was stated that:
"After deliberations and taking into account the various proposals raised by a few owners at the EGM, the Collective Sale Committee (CSC) agreed with the amendments as proposed by Mr. Norman Ho. A set of the amended pages of the CSA is enclosed for your reference."
I note that the amended CSA included several changes made to Clause 4.1.4 (on the matter of the lower reserve price), with minor changes elsewhere. While this appears to indicate that the CSC may have taken into consideration the “various proposals”, upon closer reading of the amended Clause 4.1.4, I am very disappointed that majority of the issues raised on the 23 August 2008 EGM were not addressed. In fact, my reading of Clause 4.1.4 is that the revision serves to tighten a possible loophole to prevent Sellers who withdraws from the CSA because of the lower sale price from seeking legal action against the CSC and other Sellers.
I wish to reiterate the issues that I raised during the 23 August 2008 EGM, and which is still relevant now, on the following points of the apportionment method and the CSA:
Proposed Apportionment Method
1. I am unclear on how some of the figures were obtained in the powerpoint slides printout provided by Credo. For example, on the slide titled “Apportionment Method – A Comparison” which compares between the 70/30 method (Credo) and the 1/3+1/3+1/3 method offered by CBRE, the values for the latter method are dissimilar to my own calculations. Using CBRE’s apportionment method (which is stated at 1/3 Valuation, 1/3 Strata Area, 1/3 Share Value), these should be:
[Table inserted here has been removed due to its sensitive content.]
Firstly, the values on the powerpoint slides for the 1/3 CBRE method shows deceptively similar values to the 70/30 Credo method. Owners might think that there is not much of a difference between the two methods when for owners of 117sqm units, the difference is substantial at over -$114,405 if we compared CBRE values against Credo values (see pdf file with calculations). I would like to know how Credo derived their 1/3 method apportionment of proceeds, which is quite different from those calculated using CBRE’s apportionment values.
Secondly, using the argument of narrowing the variation between upper and lower bands of premium over valuation is incorrect. In the example of 1/2SA+1/2SV used in the letter dated 12 Sep 2008, a 1% premium increase for a 117sqm unit size amounts to $29,756, whereas a 1% premium increase for a 163sqm unit size is $46,097. In other words, a 2% increase in the smallest unit is almost equivalent to a 1% increase for the largest unit. So, saying that the smallest unit gains 135% premium compared to the largest unit’s 103% premium is deceptive when looking purely at the percentage increases, as it might look to the reader that the smallest units gain proportionately more relative to the biggest units, when that simply isn’t accurate.
The better approach is to look at the apportioned amounts offered by Credo (70/30) and by CBRE (1/3 method) and consider the differences between the two methods. When viewed this way, the 38 units that are 150sqm and above have a positive difference, whereas over 108 units have a negative difference ranging from from -$82,231 to -$114,405. In other words, 108 units will stand to lose the equivalent cost of buying a car if they go with the Credo method. This is untenable and unfair. Given that the argument of using variation is questionable, I would like to see further justification of why the 70/30 method is a ‘fairer’ option for all owners. I would like to see evidence that other estates of similar configuration as BGV have adopted the 70/30 method, or failing that, why this estate is more suited to the 70/30 method over all other methods, without using the variation argument.
Lower Reserve Price Amendments
2. What are the detailed procedures on the dissemination of information on the lower reserve price and the process of the “signing of a supplemental agreement”?
a. This is not clearly defined and stated in the CSA, and needs to be done in as explicit a manner. I fail to see why such procedures are not explicitly described in a legal document such as the CSA when procedural matters are clearly explicated in the Land Titles (Strata) Act’s First to Third Schedules. For example, the LTSA requires that a general meeting be held “to provide information on the number of offers received for the collective sale and the respective amounts” (Third Schedule, 7.1.f, LTSA). By law, therefore, the CSC is required to hold at least one EGM to inform all owners of offers received, and subsequently, if they wish to accept a lower sale price. It is unclear, however, how and when will owners be notified of the opportunity to sign any supplemental agreement. Neither does it provide any information on how long will this process of signing the agreement take.
b. The revised Clause 4.1.4.a where “if the proposed sale price is lower than the Reserve Price, the Seller’s Approval shall be required (by way of signing of a supplemental agreement) before accepting such lower sale price” must be taken to read that not less than 80% share values in the Management Corporation and with not less than 80% of the total strata title area of all Units (excluding area of any accessory lot), ie the “Seller’s Approval”, must sign the supplemental agreement. Is this the case – that should a lower sale price be proposed, the CSC must obtain the signatures of owners that would constitute the Seller’s Approval in the supplemental agreement, before such a sale price can be accepted?
c. If (b) above is correct, then it should be included within the CSA, that the signing of the supplemental agreement must begin at the same EGM to inform owners of the offers received. A deadline must also be stipulated on how long could this collection of signatures for the supplemental agreement take. Otherwise, this supplemental signature collection can in theory last a year from the first signature on it. A reasonable length of time to collect the required Seller’s Approval signatures for a lower sale price, should be not more than 1 month, given that all owners would be aware and the CSC is able to keep everyone informed. This will set owners at ease that there is a reasonable and tangible outcome to this round of collective sale at a lower sale price, whether it is successful or not. Likewise, developers will also be assured that their offer will be taken seriously and not be dragged out for a lengthy period of time while the CSC collects the required signatures. A short and practical deadline will ensure that any change in market circumstances will not affect the proposed lower sale price. Any lengthier period of time will only complicate matters and any argument not to include a deadline needs to be justified to all owners.
3. Does the supplemental agreement required for a lower sale price supercede the signatures on the original CSA, as signed by Sellers? How does this have bearing on the Notice of Rescission fully entitled to Sellers by law which states that all Sellers are only allowed to rescind once from the CSA (also in Clause 6.1.37). So, if a Seller rescind once in the original CSA, signs back on the CSA, finds out the sale price is lower than the RP, can he rescind again? It should be clearly specified in the CSA that in such a situation, the Seller is entitled to his right of rescission.
4. Why is there Clause 4.1.4.b that effectively prevents any owner who previously agreed to the sale (at the expected RP) but decides against accepting a lower sale price, from taking action against any of the Sellers who signed on the supplemental agreement? By law, if a subsidiary proprietor (SP) has not agreed in writing to the sale, he or she may file an objection with the STB. Is a SP who has decided against a lower sale price still entitled to file an objection with the STB? It should certainly be the case, at the very least. I fail to see why such SPs are not entitled to any action against any Sellers who have agreed to the lower sale price, and I would like to know the rationale for this.
5. Again, I fail to see why the clause for lower sale price (4.1.4) is included in the amended CSA by Credo/Rodyk when it was clearly absent in the CBRE CSA. As Mr John Lee’s letter dated 18 October has clearly cited “positive outlook” where the “high-end market (which is where we are) will likewise improve”, and given the recent push again for the collective sale, the CSC must be seen to be confident enough in achieving the reserve price that there should be no need for clauses for a lower sale price. This clause reflects a certain lack of confidence in achieving what is maximally possible for the estate, and an ambivalence in the collective sale. Given its highly problematic nature and the lack of procedural explicitness, I would strongly argue for the complete removal of Clause 4.1.4 from the CSA. This was also the view of others who spoke up at the EGM.
Seller’s Approval
6. Clause 11.2 allows for sellers to “appoint a representative to attend and vote at a Sellers’ meeting and in respect of His Unit, that representative shall attend and vote at the Sellers’ meetings for and on behalf of that Seller”. I note that the second mention of meeting is in the plural. I hope this is a typographical error and would like to point out that the appointment of a representative is valid for only one meeting and not for any subsequent meetings thereafter. This is to prevent any representative from continuing to exercise their voting power beyond the meeting that they are explicitly entitled to do so.
I thank the CSC for allowing me the opportunity to provide further written feedback, although I must admit that most of these are already voiced to the CSC during the 23 August 2008 EGM. I had assumed, given that the EGM was completely audio recorded and minuted, that issues raised then would be addressed in any future revisions to the CSA or apportionment method. I am disappointed that this was not the case. I can only hope that this formal written feedback will make the CSC consider, very seriously, what has been said both at the EGM and now in this letter. Repeating these objections again will only serve to reflect poorly on the CSC’s claims that they seek to be a reasonable and fair group of owners to represent the estate.
Yours sincerely,
Owner
Blk 1 Taman Serasi
Botanic Gardens View
31 Dec 2009
To the Collective Sale Committee and Credo Real Estate:
Dear Sirs/Madams,
I am writing on behalf of owner of Blk 1 of Botanic Gardens View, who has appointed me as representative on the matter of the collective sale of Botanic Gardens View (BGV).
During the Extra-ordinary General Meeting (EGM) dated 23 August 2008, I and others, have raised a number of critical issues that are seen to be highly problematic both in the collective sale process, and in the Collective Sale Agreement (CSA). Since then, an amended CSA had been sent out to all owners dated 18 October 2009. In the letter from the Mr John Lee, Chairman of the Collective Sale Committee (CSC), it was stated that:
"After deliberations and taking into account the various proposals raised by a few owners at the EGM, the Collective Sale Committee (CSC) agreed with the amendments as proposed by Mr. Norman Ho. A set of the amended pages of the CSA is enclosed for your reference."
I note that the amended CSA included several changes made to Clause 4.1.4 (on the matter of the lower reserve price), with minor changes elsewhere. While this appears to indicate that the CSC may have taken into consideration the “various proposals”, upon closer reading of the amended Clause 4.1.4, I am very disappointed that majority of the issues raised on the 23 August 2008 EGM were not addressed. In fact, my reading of Clause 4.1.4 is that the revision serves to tighten a possible loophole to prevent Sellers who withdraws from the CSA because of the lower sale price from seeking legal action against the CSC and other Sellers.
I wish to reiterate the issues that I raised during the 23 August 2008 EGM, and which is still relevant now, on the following points of the apportionment method and the CSA:
Proposed Apportionment Method
1. I am unclear on how some of the figures were obtained in the powerpoint slides printout provided by Credo. For example, on the slide titled “Apportionment Method – A Comparison” which compares between the 70/30 method (Credo) and the 1/3+1/3+1/3 method offered by CBRE, the values for the latter method are dissimilar to my own calculations. Using CBRE’s apportionment method (which is stated at 1/3 Valuation, 1/3 Strata Area, 1/3 Share Value), these should be:
[Table inserted here has been removed due to its sensitive content.]
Firstly, the values on the powerpoint slides for the 1/3 CBRE method shows deceptively similar values to the 70/30 Credo method. Owners might think that there is not much of a difference between the two methods when for owners of 117sqm units, the difference is substantial at over -$114,405 if we compared CBRE values against Credo values (see pdf file with calculations). I would like to know how Credo derived their 1/3 method apportionment of proceeds, which is quite different from those calculated using CBRE’s apportionment values.
Secondly, using the argument of narrowing the variation between upper and lower bands of premium over valuation is incorrect. In the example of 1/2SA+1/2SV used in the letter dated 12 Sep 2008, a 1% premium increase for a 117sqm unit size amounts to $29,756, whereas a 1% premium increase for a 163sqm unit size is $46,097. In other words, a 2% increase in the smallest unit is almost equivalent to a 1% increase for the largest unit. So, saying that the smallest unit gains 135% premium compared to the largest unit’s 103% premium is deceptive when looking purely at the percentage increases, as it might look to the reader that the smallest units gain proportionately more relative to the biggest units, when that simply isn’t accurate.
The better approach is to look at the apportioned amounts offered by Credo (70/30) and by CBRE (1/3 method) and consider the differences between the two methods. When viewed this way, the 38 units that are 150sqm and above have a positive difference, whereas over 108 units have a negative difference ranging from from -$82,231 to -$114,405. In other words, 108 units will stand to lose the equivalent cost of buying a car if they go with the Credo method. This is untenable and unfair. Given that the argument of using variation is questionable, I would like to see further justification of why the 70/30 method is a ‘fairer’ option for all owners. I would like to see evidence that other estates of similar configuration as BGV have adopted the 70/30 method, or failing that, why this estate is more suited to the 70/30 method over all other methods, without using the variation argument.
Lower Reserve Price Amendments
2. What are the detailed procedures on the dissemination of information on the lower reserve price and the process of the “signing of a supplemental agreement”?
a. This is not clearly defined and stated in the CSA, and needs to be done in as explicit a manner. I fail to see why such procedures are not explicitly described in a legal document such as the CSA when procedural matters are clearly explicated in the Land Titles (Strata) Act’s First to Third Schedules. For example, the LTSA requires that a general meeting be held “to provide information on the number of offers received for the collective sale and the respective amounts” (Third Schedule, 7.1.f, LTSA). By law, therefore, the CSC is required to hold at least one EGM to inform all owners of offers received, and subsequently, if they wish to accept a lower sale price. It is unclear, however, how and when will owners be notified of the opportunity to sign any supplemental agreement. Neither does it provide any information on how long will this process of signing the agreement take.
b. The revised Clause 4.1.4.a where “if the proposed sale price is lower than the Reserve Price, the Seller’s Approval shall be required (by way of signing of a supplemental agreement) before accepting such lower sale price” must be taken to read that not less than 80% share values in the Management Corporation and with not less than 80% of the total strata title area of all Units (excluding area of any accessory lot), ie the “Seller’s Approval”, must sign the supplemental agreement. Is this the case – that should a lower sale price be proposed, the CSC must obtain the signatures of owners that would constitute the Seller’s Approval in the supplemental agreement, before such a sale price can be accepted?
c. If (b) above is correct, then it should be included within the CSA, that the signing of the supplemental agreement must begin at the same EGM to inform owners of the offers received. A deadline must also be stipulated on how long could this collection of signatures for the supplemental agreement take. Otherwise, this supplemental signature collection can in theory last a year from the first signature on it. A reasonable length of time to collect the required Seller’s Approval signatures for a lower sale price, should be not more than 1 month, given that all owners would be aware and the CSC is able to keep everyone informed. This will set owners at ease that there is a reasonable and tangible outcome to this round of collective sale at a lower sale price, whether it is successful or not. Likewise, developers will also be assured that their offer will be taken seriously and not be dragged out for a lengthy period of time while the CSC collects the required signatures. A short and practical deadline will ensure that any change in market circumstances will not affect the proposed lower sale price. Any lengthier period of time will only complicate matters and any argument not to include a deadline needs to be justified to all owners.
3. Does the supplemental agreement required for a lower sale price supercede the signatures on the original CSA, as signed by Sellers? How does this have bearing on the Notice of Rescission fully entitled to Sellers by law which states that all Sellers are only allowed to rescind once from the CSA (also in Clause 6.1.37). So, if a Seller rescind once in the original CSA, signs back on the CSA, finds out the sale price is lower than the RP, can he rescind again? It should be clearly specified in the CSA that in such a situation, the Seller is entitled to his right of rescission.
4. Why is there Clause 4.1.4.b that effectively prevents any owner who previously agreed to the sale (at the expected RP) but decides against accepting a lower sale price, from taking action against any of the Sellers who signed on the supplemental agreement? By law, if a subsidiary proprietor (SP) has not agreed in writing to the sale, he or she may file an objection with the STB. Is a SP who has decided against a lower sale price still entitled to file an objection with the STB? It should certainly be the case, at the very least. I fail to see why such SPs are not entitled to any action against any Sellers who have agreed to the lower sale price, and I would like to know the rationale for this.
5. Again, I fail to see why the clause for lower sale price (4.1.4) is included in the amended CSA by Credo/Rodyk when it was clearly absent in the CBRE CSA. As Mr John Lee’s letter dated 18 October has clearly cited “positive outlook” where the “high-end market (which is where we are) will likewise improve”, and given the recent push again for the collective sale, the CSC must be seen to be confident enough in achieving the reserve price that there should be no need for clauses for a lower sale price. This clause reflects a certain lack of confidence in achieving what is maximally possible for the estate, and an ambivalence in the collective sale. Given its highly problematic nature and the lack of procedural explicitness, I would strongly argue for the complete removal of Clause 4.1.4 from the CSA. This was also the view of others who spoke up at the EGM.
Seller’s Approval
6. Clause 11.2 allows for sellers to “appoint a representative to attend and vote at a Sellers’ meeting and in respect of His Unit, that representative shall attend and vote at the Sellers’ meetings for and on behalf of that Seller”. I note that the second mention of meeting is in the plural. I hope this is a typographical error and would like to point out that the appointment of a representative is valid for only one meeting and not for any subsequent meetings thereafter. This is to prevent any representative from continuing to exercise their voting power beyond the meeting that they are explicitly entitled to do so.
I thank the CSC for allowing me the opportunity to provide further written feedback, although I must admit that most of these are already voiced to the CSC during the 23 August 2008 EGM. I had assumed, given that the EGM was completely audio recorded and minuted, that issues raised then would be addressed in any future revisions to the CSA or apportionment method. I am disappointed that this was not the case. I can only hope that this formal written feedback will make the CSC consider, very seriously, what has been said both at the EGM and now in this letter. Repeating these objections again will only serve to reflect poorly on the CSC’s claims that they seek to be a reasonable and fair group of owners to represent the estate.
Yours sincerely,
Owner
Blk 1 Taman Serasi
Botanic Gardens View
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