Suit filed against some members of original sales panel

A fresh lawsuit has just been filed over the failed en bloc sale of Horizon Towers – and a new chapter in the long-running saga is about to begin.

It’s a suit that’s set to be a closely watched one in Singapore, seen as a litmus test for the possible legal action that can be brought to bear against those involved in this, as well as all other, en bloc sales.

A group of Horizon Towers’ minority owners – those who had originally opposed the sale of the Leonie Hill development – are now suing some members of the original sales committee for their handling of the en bloc sale.

According to documents filed with the High Court, these minority owners are looking to reclaim close to $1 million in legal and administrative costs which they say they’ve incurred during the lengthy fight to keep their homes.

The sale of Horizon Towers – first tabled for $500 million to Hotel Properties Ltd (HPL) in January 2007 – has been one of the most dramatic and long-drawn- out en bloc battles in Singapore’s history. The whole affair spanned more than two years and went back and forth between the Strata Titles Board (STB) and the High Court twice before finally being decided in the Court of Appeal.

The Court of Appeal ruled in April last year that the deal could not go through because the development’s sales committee had failed to fulfil its duty on several counts.

And now, three sets of minority owners – represented by Kannan Ramesh of Tan Kok Quan Partnership – have cited that landmark judgment, as a basis on which to seek reimbursement for the hundreds of thousands they have each spent in this battle.

They have served writs on former sales committee chairman Arjun Samtani and member Tan Kah Gee, alleging that they were ‘key players in the process leading up to the commencement, facilitation, management and finalisation of the collective sale process’.

The minorities, in their claim, allege that Mr Samtani and Mr Tan had ‘pushed for a quick sale of the property for their personal benefit’, because both had bought additional units in Horizon Towers, at the start of the collective sale process, and were keen to profit from that.

Their statement of claim frequently cites the Court of Appeal judgment which had accepted, as facts of the case, that:

# Mr Samtani and Mr Tan had bought additional units in the development;

# The sales committee had received an alternative higher offer of $510 million from Vineyard Holdings, one day before HPL verbally indicated it was willing to purchase the development for $500 million; and

# The sales committee agreed to go ahead and sell Horizon Towers to HPL, in spite of a suggestion from one committee member that it seek the approval of the other consenting owners because property prices had shot up, because it was concerned that the deal would fall through if the other owners were consulted.

Justice Rajah, in his judgment, had also ruled that HPL and the estate’s majority owners should share the legal costs for the second High Court hearing, as well as the Court of Appeal hearing – and that the majority owners should bear the costs for the second STB. He also allowed two minority objectors who did not participate in the final appeal to be given 80 per cent of the costs incurred in the second STB and High Court hearings.

The minority owners are now seeking compensation for the sums not covered by Justice Rajah’s judgment. The three sets of owners are seeking between $117,000 to $370,000 in costs – making for a total claim of more than $800,000.

In his defence, filed with the High Court, Mr Samtani states repeatedly that he was not alone in driving the sale process. He said ‘each and every member of the SC (sales committee) played an equally important role’ and that he ‘did not have any special powers’ that could influence the committee’s decisions.

Mr Samtani also claimed that the committee ‘followed up on all expressions of offer’ for Horizon Towers and that it received no offer better than HPL’s at the relevant time. He said that, on the advice of the committee’s lawyers, Drew & Napier, the committee proceeded with the HPL offer.

As for the additional unit he purchased, Mr Samtani said that it ‘was not for investment, instead it was for use by his son’. He claimed he had disclosed the purchase of an additional unit to Drew, and was not advised by Drew that he had to announce it to the other consenting owners.

Mr Tan, who is represented by TSMP Law Corporation, has requested an extension of time to file his defence. Mr Samtani is represented by N Sreenivasan from Straits Law Practice.

Source : Business Times – 26 Jan 2010

Developers have sold over 900 units this month as bullish sentiment returns

Developers have sold more than 900 private homes so far this month – based on BT’s poll of developers and property agents – and with another week to go, the tally is easily expected to cross 1,000 units by month’s end.

Besides Allgreen Properties’ Holland Residences, which will be previewed this week, Wing Tai is said to be at an advanced stage of preparation for an imminent preview for L’Viv at Newton Road. The average price is touted at about $1,900-$2,000 per square foot (psf) – significantly higher than the $1,700 psf average price at which Ho Bee is selling its Trilight condo nearby.

Wing Tai is eyeing a higher per square foot price by offering smallish units (thus keeping the absolute lump sum price per unit ‘affordable’ to potential buyers). The developer is said to be packaging its project with Deferred Payment Scheme as it had clinched approval for it before the scheme was scrapped in 2007.

L’Viv comprises a total of 147 units – 72 units have one bedroom and a study and these come in two sizes, both 600-sq ft plus; another 72 units have two bedrooms and a study (all about 1,000 sq ft); and there are three penthouses (all three bedders).

Trilight does not have any one-bedders. It has two, three and four bedders as well as penthouses. Two bedders range from 1,100 to 1,200 sq ft.

Fortune Development is also slated to begin previewing this week RV Edge in the River Valley/Shanghai Road vicinity. The 108-unit freehold project, being marketed by Huttons, comprises mostly smallish apartments ranging from one-bedders to two-bedroom with study units. The smallest unit is about 400 sq ft. Prices are expected to start from $600,000-plus per apartment.

City Developments Ltd (CDL) said yesterday evening that it has sold about 85 per cent or about 150 of the the total 177 units at its Cube 8 condo at Thomson Road, which it began previewing last week.

Singaporeans bought 75 per cent of the units sold. The other 25 per cent were picked up by permanent residents (PRs) and other foreigners – mainly from Malaysia, Indonesia, Hong Kong, Korea, India, China and Europe.

The District 11 freehold project was initially priced at $1,250 psf on average but prices were upped 2-3 per cent for subsequent releases.

CDL group general manager Chia Ngiang Hong said in a statement that the buyers were an ‘equal mix of owner-occupiers and investors’ and that this pointed to the development’s appeal to both home owners and investors.

Some market watchers suggest, however, that the project has probably also drawn a fair number of specuvestors. Slightly over half of the total 177 units comprised one and two bedders and these were the first to go, mirroring the pattern for other projects that were launched in Districts 9, 10 and 11 last year.

In addition to the buying buzz created this month from the release of new projects, some developers have been pleasantly surprised with a steady stream of activity even for existing projects that have been on the market for at least a few months. For instance, Ho Bee Investment has sold about 60 units at its Parvis condo at Holland Hill and 10 units at Trilight since the start of the year.

CDL is also understood to have sold more than 50 units at its Livia condo in Pasir Ris this month and the 724-unit project is now left with about 10 units.

‘Sentiment has picked in the mid and high-end markets because of the improvement in the economy; the imminent opening of the two integrated resorts (IRs) may also have given a psychological boost to foreign buying interest, which seems to be returning,’ says Ho Bee executive director Ong Chong Hua.

Agreeing, a fellow developer said: ‘We’re seeing a bigger variety of buyers from the region this round – including markets like Myanmar and Laos.’

UOL Group has sold this month 25 units at Double Bay Residences in Simei and 18 units at Meadows @ Peirce along Upper Thomson Road. The group plans to launch two projects in the first half of this year – a 99-year-leasehold condo with about 600-plus units at Dakota Crescent and a project with some 170 units on the Rainbow Gardens site in the Toh Tuck area. The latter will be a joint development with LaSalle Asia Opportunity II fund.

Developers’ home sales slipped below the 1,000-unit per month mark in Q4 last year as they wound down their launch activities towards year-end. Some potential buyers had also grown cautious following the government’s measures in September to cool the property fever.

However, fear of missing the boat appears to be re-igniting with strong signs of another round of price hikes this year.

‘For the economy, the worst is over and much of the physical infrastructure investment like the IRs is close to completion,’ says Knight Frank chairman Tan Tiong Cheng.

Asked if the authorities are likely to come up with fresh measures to cool the market if another wave of buying frenzy builds up, Mr Tan said: ‘Frankly, it’s very hard to deter people from buying, if you look at how strong the HDB resale market is. There’s very strong bottom-up support.’

Source : Business Times – 26 Jan 2010

A NEW survey shows that 80 per cent of all real estate transactions in Singapore are done through real estate agents and most of these end with customers encountering some sort of ‘bad service’.

Respondents disappointed with services of estate agents highlighted ‘bad or wrong advice’ as well as the failure to get favourable prices to be the key problems they had with the agents.

This was a part of the findings by final-year Diploma in Real Estate Business students of Ngee Ann Polytechnic in their recent research project on the public’s perception and expectations of property agents.

The survey covered 1,014 respondents from diverse age groups, professional and educational backgrounds.

Giving details, Nicholas Mak, real estate lecturer at the tertiary institution who helmed the survey, noted that eight out of every 10 property transactions in Singapore are done through an estate agent and 77 per cent of those who use estate agents encountered ‘bad service’ of some sort.

The survey also showed that 73 per cent of the respondents felt that accreditation of the profession is necessary with two-thirds of them expressing their satisfaction with the current accreditation scheme.

Mr Mak added that 97 per cent of those who indicated that accreditation is necessary for every agent also wanted some form of government intervention.

He felt that the findings are well timed with the new regulatory framework for estate agents, which the government is planning to put in place soon.

‘This survey was initiated with the objectives of finding out consumer opinion of real estate agents and improving the existing accreditation system,’ Mr Mak noted.

The lecturer noted that those disappointed with services of estate agents had highlighted ‘bad or wrong advice’ as well as the failure to obtain favourable prices to be the key problems they had with the estate agents.

‘Some of them also felt that their real estate agents neglected their opinions or suggestions,’ he added.

The survey also covered the public’s views on the following issues:

# What ought to be the minimum qualification of estate agents and if that affects their competency

# Consumers’ expectations of services from property agents

# Whether experience and qualification equally matter in the choice of an estate agent

# Suggestions for government action.

Source : Business Times – 25 Jan 2010

I REFER to last Thursday’s Forum Online letter by Mr Paul Chan, ‘New rules on property funds not safe enough’. Mr Chan’s main concern is the role of stakeholder that lawyers play, which allows them to hold conveyancing money pending completion.

The proposed regime of measures offers alternatives for consumers who hold the same view as Mr Chan. In situations where the conveyancing process requires a third party to hold money for the buyer and seller, the Singapore Academy of Law (SAL) will offer a stakeholding service. Buyers may also choose to make payment of transaction proceeds directly to sellers.

Escrow arrangements, where a bank holds money on behalf of both parties, will also be available where it is commercially feasible for the bank to offer the service.

Those who wish to be assisted by their lawyers for commercial convenience can do so using the conveyancing accounts of the law firms under the proposed arrangement. Lawyers will not have unilateral control over the release of money held in the conveyancing accounts. Both sets of lawyers will have to sign off before payment can be made from these accounts.

We are working with lawyers, banks, SAL and other stakeholders to ensure that the new system will not be more time-consuming nor cumbersome for the consumer.

We thank Mr Chan for his feedback, and welcome further views which will help us refine the proposed measures. The public consultation materials are at the Ministry of Law’s website (www.minlaw.gov.sg) and the Reach portal (www.reach.gov.sg).

Chong Wan Yieng (Ms)
Head, Corporate Communications
Ministry of Law

Source : Straits Times – 25 Jan 2010

ARTS studios and sports facilities will occupy three buildings at the site next to the workers’ dormitory in Serangoon Gardens.

The blocks were originally meant to form a buffer zone between the dormitory and the estate’s residential areas, to ease residents’ concerns about the workers living there.

The buildings are part of the former Serangoon Gardens Technical School along Burghley Drive.

Now, the Singapore Land Authority is tendering the blocks out on its website for use as arts, dance or drama studios and schools, or interim facilities for sports such as tennis, squash or badminton.

The blocks, with a gross floor area of 1,935 sq m, will be rented out at $14,500 a month for two years.

The website of Aljunied GRC, which administers the estate, also carried an announcement about the upcoming tender, which is expected to open later this month or next.

The tender results will be announced by April or May, according to the website.

Aljunied GRC MP Lim Hwee Hua said on Saturday that the area had already been zoned for use as a school, so it was feasible to use the site as an arts and drama studio or sports facility.

She made the remarks on the sidelines of a community programme to encourage more women to go for breast cancer screening.

Estate residents welcomed the prospective use of the buildings.

Mr John Leow, 69, who chaired a residents’ committee on the dormitory issue, said he was not worried about the buildings’ proximity to the dormitory because they could not be accessed from the dormitory.

‘Arts or sports facilities will enrich the community,’ he said.

When the workers’ dormitory, now called the Central Staff Apartments, was proposed in 2008, upset residents voiced concerns about security, safety and traffic congestion.

The dormitory now houses more than 100 workers from China, India, Malaysia and Bangladesh. The number will rise to 600 by mid-year.

Mrs Lim noted there had been no issues with the workers since they moved into the buildings last month.

Source : Straits Times – 25 Jan 2010

A survey has found that almost eight in 10 people who used housing agents here encountered “bad service” of some sort.

The survey by Ngee Ann Polytechnic found that 77 per cent of respondents said they met with bad service from their agents.

Some of the respondents’ top grouses were that their agents failed to negotiate a good price, that they gave the wrong advice and that they were late for appointments.

Other less common bad service include aggressive property agents, negligent agents and agents who were dishonest or unfamiliar with the transaction procedures.

Generally, however, respondents were content their agents’ services, with 65 per cent being either satisfied or very satisfied.

At the same time, 73 per cent of those surveyed felt that accreditation of the profession is necessary.

In addition, 97 per cent of those who indicated that accreditation is necessary for every agent also wanted some form of government intervention.

1,041 people took part in the survey.

Source : Channel NewsAsia – 25 Jan 2010

Frasers Centrepoint Trust (FCT) on Monday said that its distribution to unitholders for its first quarter ended Dec 31, 2009 rose 15 per cent to $12 million (US$8.5 million) from $10.4 million a year ago.

Distribution per unit (DPU) rose to 1.91 cent from 1.67 cents.

Net income for the quarter rose 20 per cent to $10.1 million from $8.4 million. The increase is partly due to the improvement in revenue generated from Northpoint upon the completion of its addition and alteration works in August 2009.

FCT’s property portfolio continued to achieve positive rental reversions during the quarter ended Dec 31, 2009, the trust said.

Source : Business Times – 25 Jan 2010

Nomura Singapore has inked a lease for 102,000 sq ft at Marina Bay Financial Centre (MBFC), Raffles Quay Asset Management (RQAM) announced on Monday.

The space is spread across levels 34 to 37 of MBFC’s 50-storey Tower Two. ‘The leading financial securities company in Japan, Nomura has signed a 12-year lease and will take occupancy of the space in 2011.

‘The latest tenant brings the total pre-commitment of MBFC Tower Two to approximately 66 per cent, with overall pre-leasing figures for MBFC Towers One and Two at approximately 79 per cent,’ said RQAM, the asset manager for MBFC.

The development’s Towers 1 and 2 are slated for completion this year.

MBFC is being developed by a consortium comprising Hongkong Land, Cheung Kong (Holdings) Ltd / Hutchison Whampoa and Keppel Land.

Source : Business Times – 25 Jan 2010

City Developments (CDL) said it has sold 85 per cent of the units in its Cube 8 development, located at the former Albany and Thomson Mansion site along Thomson Road.

Private previews for the former sites’ owners, directors and staff of CDL started last Thursday and the public preview began on Friday.

Over the weekend, all the one- and two-bedroom apartments have been sold.

Singaporeans made up the majority of buyers. Permanent residents and foreigners mainly from the region, India and Europe bought 25 per cent of the units.

The 36-storey freehold development comprises 177 units of one- to four-bedroom apartments and sky villas, ranging from 560 square feet to 3,229 square feet in size.

The launch was at an average price of S$1,250 per square foot, with a marginal increase of two to three per cent for subsequent release.

Source : Channel NewsAsia – 25 Jan 2010