A country, a city, a garden or a hotel?

Things are getting "curiouser and curiouser", as Alice said in The Land of Oz ...

But it may go some way to explain why we are "Hotel Singapore Inc" (no longer "Singapore Inc") ...

• why homes are commoditized for en bloc flipping ...



• why the law technically provides for en bloc sale immediately upon issuance of Temporary Occupation Permit (viz, when owners take possession of their spanking new condominium/apartment unit) ...



• why condos of 15-25 years of age are pulverized under a wrecker's ball despite flavour-of-the-day hype about Sustainable Development, bearing in mind that some of these condos were designed by renowned architects and some with still-stunning aesthetics as part of post-independent Singapore's modern architectural legacy ...



• why our collective sense of community, of rootedess, of time and of space in our nascent nationhood are yanked out thoughtlessly and almost zealously ...



• why ownership of a refrigerator made in Malaysia outlasts ownership of a condo unit built on Singapore island ...

In August 2009 around the time of our National Day celebration, we learned from Minister Mentor Lee Kuan Yew's response to NMP Viswa Sadasivan's high-falutin' maiden speech in Parliament that our National Pledge enshrines mere "aspirations". Uh-oh ...

Less than three months later, our Law Minister Mr K Shanmugam affirmed at the Q&A session of the New York State Bar Association (NYSBA) Rule of Law Plenary Session on 28 Oct 2009 that in fact "We are a city. We are not a country". Voila!

Oi, before you can finish uttering "Majullah Singapura", the powers-that-be may well say that we are possibly only a garden, and not even a city (much less the oft-touted "City In A Garden")!

Now, on a more serious note (ie, not so tongue-in-cheek, although I have absolutely no idea where else to store my tongue these days in the face of recent ministerial pronouncements), it was indeed thought-provoking to read Singapore Chief Justice Chan Sek Keong's keynote address at NYSBA's Annual Fall Meeting on 27 Oct 2009 that:

-- "rule of law simply means the supremacy of the law, without reference to whether the law is just or unjust";

-- "the Constitution declares that any law inconsistent with the Constitution is null and void but it does not expressly provide for a procedure for nullifying and voiding such law. But because the judicial power of Singapore is vested in the judiciary, the legislature and the executive have accepted the legitimacy of the courts to exercise this power";

-- "the courts have the power to review legislation and executive acts to determine whether they are unconstitutional. They also have the power to review executive acts to determine whether they are contrary to law. So long as the power of judicial review exists, the rule of law exists".

The speeches and events arising from NYSBA's Annual Fall Meeting have indeed made me "curiouser and curiouser" as to when has the Singapore Judiciary exercised its review powers, if at all? Surely, in our 44 years of nationhood, there would have been occasions, even if rare, on the assumption (and presumption) that we have the best of men and women with the kindest of intentions amongst the powers-that-be?

Now, we all know what curiosity eventually did to the cat! But do indulge me with some vocal room for plaintive meowing:
Who checks the checker when checker doesn't check?

Or maybe there is nothing to check? Or maybe the checks affirmed that everything was 100% A-OK at all times? Or maybe if something was a little askew at one time, the checker just had a quiet word with the checked and everything was straightened out pronto without we suckers being made any wiser. As the old sayings go: "Silence is golden"; "Ignorance is bliss"; "What you don't know won't hurt". Who am I to doubt such ancient wisdom, eh?

But, but, but ... now that we know our independent Judiciary has "the power to review legislation and executive acts to determine whether they are unconstitutional ... the power to review executive acts to determine whether they are contrary to law", perhaps they should exercise such judicial independence and their powers to review the Land Titles (Strata) Act, especially within the present context of "our own political, social and cultural values", as our Honourable Chief Justice puts it.

The proof of the pudding is in the eating. Such review would showcase the judicial independence that Singapore is trying so darn hard to convince all and sundry, especially after the International Bar Association Human Rights Institute Report of July 2008 entitled "Prosperity versus individual rights - Human rights, democracy and the rule of law in Singapore". http://www.ibanet.org/Human_Rights_Institute/Work_by_regions/Asia_Pacific/Singapore.aspxore.aspx

Perhaps, initiating a judicial review to "make an unjust law just" and also "do right by the people" may go some way to lend greater credence to Singapore's assertion of judicial independence. In other words, a whiter-than-white exercise - without any punning intention on my part with the People's Action Party all-white party dress colour!

Over our 44 years of nationhood with 2nd and 3rd generational Singaporeans as present condo owners, how many more times are Singaporeans expected to sacrifice yet again in the name of our country (... errrr, city) (... ooops, garden) (... I mean, hotel)? [Whew, the cat nearly got my tongue!] This was the poser in para 6 of my previous blog entitled "A horse dumbstruck by a mutant 3-hump camel" dated 7 Oct 2009: http://singaporeenbloc.blogspot.com/2009/10/horse-dumbstruck-by-mutant-three-hump.htmlhump.html

QUESTION - Is this en bloc law:

(a) still "consistent with our Constitution", and [L'est we forget - Do bear in mind that we are no longer demolishing slums nor building infrastructural/community facilities over the demolished condos under police powers for public safety or eminent domain powers for larger communal good.]

(b) not "contrary to law", and [Undoubtedly, an unjust law is still law. Ordinarily, the courts will justly dispense justice under unjust law. Now, would that make it "Just Injustice" or "Unjust Justice"??? Kind of comparable to the innocence of "1 + 1 makes 11", eh??? Ahhh ... but one should take heart from what the Chief Justice also said in the same NYSBA keynote address: "Justice and fair play according to predetermined rules of law can be achieved within our situation if there is integrity of purpose and an intelligent search for forms which will work and which will meet the needs of our society".]

(c) "just and fair" within our present context of "political, social and cultural values"? [Context: This law impinges on strata-title private property rights in a land where (i) Singapore is the world's most densely populated city at 6,814 persons per sq km (Singapore surpassed Hongkong in 2009) and (ii) Singapore has the 3rd highest GDP at PPP per capita in the world at 49,288 international dollars (Singapore ranks after Luxembourg and Norway but ahead of the USA, Hongkong and even Switzerland according to World Bank 2008 data).] http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita#cite_note-1-1

On the one hand, the majoritianism powers invoked by this law are draconian. Yet on the other hand, the purported collectivism which birthed the majoritianism is thinly veiled and brazenly (purportedly legally) undermined from what I could piece together from the numerous en bloc battles fought in court (viz, some Majority Consenters and/or some Minority Dissenters could be paid more under separate private treaties with gag orders). Scant regard is paid to minority rights even where it affects something so basic as a ceiling over one's family that one has bought with 100% personal savings and provident funds!

As a classic Homer Simpson quote goes: "Never under-estimate the power of stupid people in large groups". Majoritianism is cleverly capitalized upon to unlock land value primarily for corporate developers because - in my opinion - the law is skewed and calibrated (not unwittingly, if you know our Gahmen) against extant individual homeowners. My opinion is buttressed by the stark and harsh reality invariably faced by nearly all homeowners of "twice the price, half the size, quarter the value" post-en bloc, as reflected in numerous press reports and even a mini-survey done by The Straits Times. That's why I reckoned the South Korean model of urban rejuvenation under their Hapdong Redevelopment laws mandating one-for-one (1-4-1) exchange is more just and equitable, being the lesser of two evils when majoritianism is allowed to prevail over private property rights (Gahmen has been made aware of South Korea's Hapdong Redevelopment laws since Aug 2007).

Other than occasionally fighting over Hello Kitty toys at McDonald's, petrol discounts and talking on handphones during cinematic screenings, Singaporeans generally are a law-abiding lot. However, to wit:

- The overwhelming caseload of the Strata Titles Boards resulted in a significant and hurried expansion of the tribunal in 2008 to cope with the backlog of en bloc battles, escalating into protracted en bloc legal battles at High and Appellate Court levels;

- The widely reported criminal acts committed by ordinary folks in various condo estates (so much for gracious living of the upper-middle and upper social class who could afford private property prices in Singapore);

- The neighbourhood and even matrimonial acrimony hearsay one encounters not infrequently over the past couple of years (and still persisting after the 2007 legislative amendments);

- The tribunal of their own accord even poked its fingers in an attempt to stop the collective sale of one controversial condo estate (viz, Regent Garden) for valuation reasons;

- The tax authorities (again, of their own accord) stepped in to claim their share of the spoils by way of overdue stamp duties that - according to en bloc market practice until the case of another condo estate (viz, Regent Court) - are paid only if the tribunal issues collective sale order; and

- The public disagreement (rare but distinct - thankfully healthy for being both rare but distinct) between the judicial courts and the tribunal over some landmark en bloc legal battles (viz, Horizon Towers, Regent Garden).

Perhaps (or surely?), the above symptons are a litmus indicator of the injustice and unjustness of this law. The aforementioned state of affairs already and unequivocably FAILS the Chief Justice's stand that "the acid test of any legal system is not the greatness nor the grandeur of its ideal concepts, but whether in fact it is able to produce order and justice in the relationships between man and man and between man and the State". And if I may add, "between one state organ and another state organ".

The Chief Justice's equanimity worries me when he said that "the very fact that we still debate this sort of question shows that the rule of law is very much alive and well in Singapore". Wah lau, surely the crux of the matter lies NOT in the "debate" but in the "execution"!

I am sufficiently perturbed as a Singaporean that Singapore seems to apply either the thick or the thin versions of the rule of law as it suits the powers-that-are according to each circumstance. Broadly, as the Chief Justice pointed out, "the thick describes the rule of law in liberal democracies". According to The Economist (15 Mar 2008), "the thick definitions treat the rule of law as the core of a just society" and "the 'declaration of Delhi' drawn up by the International Commission of Jurists in that city in 1959 followed this line in saying that the rule of law 'should be employed to safeguard and advance the civil and political rights of the individual' and create 'conditions under which his legitimate aspirations and dignity can be realised'."

As Singapore clearly does not fall into the above description and cannot be classified as a "liberal democracy" by any stretch of imagination, that must mean Singapore applies the thin version of the rule of law. However, Singapore traces her legal tradition back to common law (similar to the U.S. and the U.K. versus civil-law countries such as France and the Scandanavian bloc). Yet "common-law countries have more secure property rights, better protection of shareholders and creditors, more diversified share ownership, and tougher disclosure and liability laws" (The Economist, 15 Mar 2008). This en bloc law does anything but provides "secure property rights"!

Grrrr ... things just don't add up in this little red dot! So what else is new, eh? Such shilly-shally pattern in the legal arena is only consistent with Singapore's Prices and Earnings trends captured in UBS' 30 July 2009 report. Namely, on the one hand, Singapore rivals First World Countries in the areas of GDP, COL, Price Level but on the other hand, we rival Third World/Emerging Countries in terms of Wage Index, Domestic Purchasing Power, Purchasing Power of Wages (Big Mac/iPod), Working Hours - please double-click on the table in para 9 of my previous blog at: http://singaporeenbloc.blogspot.com/2009/10/horse-dumbstruck-by-mutant-three-hump.html

The Chief Justice with more hair than Yul Brynner but somewhat less dashing as Chow Yun Fatt drew a succinct analogy with the musical 'The King and I' where "the King is puzzled by the changes his kingdom has undergone. He sings a song which ends with these words:
When I was a boy
World was better spot
What was so, was so
What was not, was not
Now I am a man
World have changed a lot
Some things nearly so
Others nearly not.
Singapore has changed a lot in 50 years, some things nearly so, others nearly not".

Well, will the en bloc law change a lot next year, nearly so or nearly not?

They say: "Talk is cheap". In fast-paced Singapore in a fast-forward world, a decade from 1999 when the en bloc law first came into effect is nearly long. It's time to walk the talk! Otherwise, my movable refrigerator made-in-Malaysia will outlast my immovable real estate built-in-Singapore as I get "furiouser and furiouser" ...

A horse dumbstruck by a mutant three-hump camel

1. Mutant three-hump camel. On 12 Sep 2009, the following Forum Letter was published in The Straits Times about a mutant three-hump camel:
http://lushhomemedia.com/2009/09/12/property-index-and-saga-of-the-three-hump-camel/camel/camel/camel/camel/

QUOTE: Singapore‘s Private Property Market Index looks like a mutant three-hump camel, registering a 45 per cent bust from the second quarter of 1996, a 40 per cent boom from the fourth quarter of 1998, a 20 per cent bust from the second quarter of 2000 and a 58 per cent rise from the first quarter of 2004, with the latest figures in the second quarter of this year dropping back to below the second hump.

Yet National Development Minister Mah Bow Tan said on Sept 2 that ‘as far as (private home) prices are concerned, we want to make sure… there is no excessive speculation’.

With a three-hump camel of boom-busts in 13 years, at what point is speculation deemed ‘excessive’? When a slew of sub-sale advertisements appear on soft launch and when kettles are owned for more than five years, yet property ownership of less than five years may not be ‘property trading’, it makes a mockery of tax laws.

Currently in land-scarce Singapore, we have 4.84 million residents (6,814 people per sq km), with a 6.5 million target population in 40 years. As Central Provident Fund savings are largely locked in home ownership, residential real estate goes beyond Mr Market’s wheeling and dealing. To draw a parallel, it is equivalent to rice harvests in Vietnam as an agro-economy – except we are in perpetual drought.

Mr Mah urges Three Thinks – ‘think carefully, think long term, think about the unexpected’ – before we buy property.

I did Three Thinks before buying a condominium unit. Now I cannot do even One Thing when my neighbours sell the roof over my head.

Property is all about location and timing. Retirement wealth is at stake. Can Mr Mah follow South Korean laws and do One Thing for Singaporeans: ‘Sell one, return one’ instead of ‘Double the price or half the size’ in collective property sales? END QUOTE.

2. Horse kept mum. As pointed out in the Straits Times Forum Letter, most bona fide home owners and prudent investors (as opposed to speculative flippers) would have done the Three Thinks (viz, “Think carefully; Think long term; Think about the unexpected”) before committing to buy a private condo which is generally considered to be a significant purchase in expensive land-scarce Singapore.

To date, National Development Minister Mah seems to be dumbstruck as to what is the One Thing that private condo owners could do when the only roof over their heads is sold by courtesy of their neighbours. Is that why Mr Mah is keeping mum? Perhaps in a more sensitive and sensible frame of mind, Mr Mah is not parroting what he spouted and blurted out in Jun 2007 during an interview about en bloc sales (please scroll down to para 8 below). However, Mr Mah's silence probably means that what he spouted in Jun 2007 is the One Thing private condo owners could do -
DOWNGRADE!

3. Behind the curve (yet again). Almost two years ago, I posted a blog entry that drew an analogy between (a) the then withdrawn Deferred Payment Scheme and (b) the morphed Interest Absorption Scheme as being the equivalent of "half cati, six taels” in para 4 of my 2007 Christmas Eve blog entry entitled "In the coming year of 2008": http://singaporeenbloc.blogspot.com/2007_12_01_archive.html

It took the Gahmen almost two years to ban Interest Absorption Scheme on 14 Sep 2009 after it withdrew the Deferred Payment Scheme on 26 Oct 2007! Tsk, tsk, a bit slow in trotting out the ban, eh?

4. One-for-one exchange in enforced en bloc sale. In Aug 2007, MinLaw was alerted about South Korea’s mandatory one-for-one exchange scheme under the Hapdong Redevelopment Scheme. How long will the Gahmen take to study the South Korean urban renewal model and re-calibrate a similar model to suit Singapore’s context? Isn't it high time that the amended en bloc legislation be substantively revamped (not just tinkered with peripherally)? All the more so in the light of the typical Gillman Heights en bloc experience set out below.

5. Face-off between Gillman Heights and The Interlace. There were media reports about shouting by Gillman Heights en bloc sellers who were invited to a preview of The Interlace condo that will be built on their land after Gillman Heights is demolished. Putting aside issues about limited choices or dumpy-looking building model, the dollar numbers were totally stark!

- Gillman Heights en bloc sellers were paid about $498 psf.
- The Interlace prices ranged from $850 - $1,150 psf during soft launch.

Another classic case of “twice the price, half the size, quarter the value” as land use efficiency would be fully maximized in the redevelopment of Gillman Heights into The Interlace. Yet once again, my last year’s National Day trilogy blog entry rang true on “Why en blocs are NOT right for Majority Consenters nor Minority Dissenters”: http://singaporeenbloc.blogspot.com/2008/08/en-bloc-why-it-is-not-right-for.html

This typical post-en bloc experience of Gillman Heights owners makes for a highly cogent argument and justifies a mandated and managed one-for-one exchange in an enforced en bloc sale, as discussed in my previous National Day trilogy blog entry entitled "So what's the alternative in the end": http://singaporeenbloc.blogspot.com/2008/08/so-whats-alternative-in-end.html

6. Multi-generational “sacrifice”. Putting the typical Gillman Heights en bloc experience into context, it was exceedingly perturbing to read MinLaw’s account of the history and impact of land acquisition in Singapore (Straits Times, 4 Sep 2009): “The Government's land acquisition schemes have mostly affected land owners. The general public, on the other hand, have been the primary beneficiaries of such acquisitions, through public housing, building of infrastructure for public benefit and various other developments, including the building of condominiums - the latter allowed condominium owners to enjoy the land which was originally enjoyed by land owners.”

How many generations of Singaporeans must sacrifice in the Making (and Re-Making) of Singapore?

(a) My grandparents’ residence was acquired by Gahmen for historic conservation.

(b) My parents’ residence was acquired by Gahmen for infrastructural development.

(c) My residence could be force-sold by my neighbours due to a law passed by Gahmen and we would end up as Squatters, Refugees, Downgraders or Downsizers post-en bloc.

And the next generation too? Is Singapore a circus of clowns or what??? Not funny, eh?

Whilst I won’t and can’t quarrel with MinLaw’s assertion in the same article that “we also need to take into account the need for modernisation, rejuvenation of estates and optimisation of land use”, it makes me wonder wherein does the Gahmen find “the appropriate balance” in the uniformly stark post-en bloc spectre of “twice the price, half the price, quarter the value” (ie, the typical Gillman Heights en bloc experience) in possibly ALL en bloc estates to date??? As a citizen, I just pray that the oft-touted "appropriate balance" is not just hot air and we do NOT wait for yet another decade before the en bloc law is next meaningfully re-calibrated and re-balanced to finally "do right" by the people!

7. Democracy vs Collectivism. Even after the Horizon Towers en bloc saga and especially after the Regent Garden fiasco, slimy things are probably slithering stealthily around in Golden Mile Complex as smart alecks try to do an en bloc via the back-door (The Straits Times, 19 Sep 2009).

Over time, I have blogged intermittently about how the "collectivism" element in en bloc sales has been effectively and legally undermined (eg, para 5 of my 2008 National Day trilogy blog entitled “Greek mythology: The Source and Themis”): http://singaporeenbloc.blogspot.com/2008/08/greek-mythology-themis-and-source.html

The slimy slitherings in Golden Mile Complex are yet another manifestation of this shenanigan. It makes a mockery out of the collectivism element of “collective” sales! If the authorities continue to sit on their hands, the market will render en bloc sales to be "fait accompli" exercises because the law can (and will) be legitimately twisted by the market to allow the consortium of Developer-buyers to force the hand of the Minority by (i) timing the market and (ii) buying low for the last 20% to average-down the consortium's lock-in of upfront purchases.

It goes back to the fundamental question as to whether in land-scarce Singapore with a high target population for the coming decades and home ownership as one of our core socio-political factors, property speculation is to be facilitated as opposed to genuine home ownership. As a general rule of thumb, will a bona fide homeowner or real estate investor expect to sell a property within five years of purchase?

Hence, it was facetious to read a Business Times article (24 Sep 2009) by a specialist en bloc marketing agent positing that: “There is no way that any rule can please everyone. Democracy goes by majority rule.” That is equivalent to saying if majority of the whites think lynching of the blacks is acceptable, then we should pass a law to that effect and all the whites can merrily (and legally) lynch the blacks! That’s “democracy”, eh?

8. The Cockerel and the Horse. It amazes me to no end as to how politicians either shoot off their mouth or shoot themselves in the foot!

More than two years ago, when en bloc fever was at its height, Sunday Times (17 June 2007) reported that when interviewed about en bloc sales, National Development Minister Mah advocated that Singaporeans should downgrade and said: "If you can't buy an executive flat, buy a 5-room. If you can't afford central area, go to the suburbs. If you can't afford Tampines, go to Woodlands or Yishun.”

Fast-forward two years later, with growing public criticism over HDB (public housing) price affordability, the Straits Times (2 Oct 2009) reported that Minister Mah asserted that comparing the prices of public flats today with those of 20 years ago is “not meaningful”. Mr Mah went on: “If we did that, we’d be comparing many things that we did 20 years ago, do we want to go back 20 years?”

So it begs the question: Say, 20 years ago, you bought a condo at $1mn. Now you sell it on en bloc basis at $2mn (the so-called "en bloc windfall" hype). Yet the $2mn en bloc pay-out would only buy you half the size of your en bloc condo in the same neighbourhood. Or you would have to move way out into the suburbs since you would not be able to “afford central area” (as Minister Mah squarely puts it). So is it “meaningful”??? Do we have a cockerel talking out there somewhere? Do we have many chickens running around sans their bird-brained heads as they die-die-must-sell-en-bloc?

To add salt to wound, Minister Mah goes on to talk about monetizing the real estate asset for income later in life which – in the case of HDB flats – involves selling the flat or participating in HDB Lease Buyback Scheme. Likewise for private condo owners who may similarly need to sell the condo in their twilight years as part of asset monetization, these condo owners will end up with a half-size condo or an outlying condo or a HDB flat to monetize eventually.

9. Singapore out-of-whack. With 44 years of nationhood under our belt, our people have toiled and competed and today Singapore has achieved a high GDP per capita, much to the envy and marvel of many other countries, I dare say.

Hence, it made me wonder why there seems to be a certain pervasive quiet desperation for (a) private condo owners to die-die-must-sell-en bloc and (b) HDB (public housing) owners to participate in Lease Buyback Scheme. It was interesting to read that there were 409 Lease Buyback applications to HDB but only 80 qualified and HDB may expand the target group for this scheme.

Then it all made sense when I read a UBS report (30 Jul 2009) covering 73 international cities entitled “Prices and Earnings (a comparison of purchasing power around the globe”.


Just for the heck of it all, I did the above table (please double-click on the table for legible viewing) to compare Singapore with:

(i) Zurich (since the 1980s, Singapore aspired to be “Switzerland of the East”),

(ii) Tokyo, Hongkong, Taipei and Seoul (the other Asian dragons),

(iii) Next rival city (for statistical proximity), and

(iv) Kuala Lumpur (for geographical proximity).

Compared against the above cities, Singapore’s pattern was interestingly parodoxical.

(A) In the areas of:
- GDP at PPP per capita (nearest rival: USA)
- Cost of Living (nearest rival: France)
- Price level incl rent/energy (nearest rival: Germany)

Singapore scored well and our nearest rivals are from First World countries! Ahhhh ...

(B) In the areas of:
- Wage Index (nearest rival: Russia)
- Domestic Purchasing Power (nearest rival: Malaysia)
- Purchasing Power of Wages for a Big Mac (nearest rival: Czech Republic)
- Purchasing Power of Wages for an iPod nano 8 GB (nearest rival: Slovenia)
- Average working hours/year (nearest rival: Turkey)

Singapore scored poorly and our nearest rivals are from Third World countries! Sheesh!!!

The picture is pretty telling, eh? But it is NOT a pretty picture at all for Singapore! In contrast, the scores are tightly correlated for all of the other abovementioned cities. In other words, where Zurich, Tokyo, Hongkong scored high in GDP/COL, they similarly scored high in Wage Index/Purchasing Power. Likewise, as Kuala Lumpur scored low in GDP/COL, they also scored low in Wage Index/Purchasing Power.

So the pattern matches for all of the abovementioned cities EXCEPT Singapore! In all the other cities, Life makes Sense (you are rich and so you live well; OR you are poor and so you live not so well) ... but here in this little red dot called Singapore, we are ensnared both at the wrong ends of the spectrum where we are so-called rich but we live poor!

Something is so out-of-sync in Singapore!!!

No wonder after working our whole life to buy a roof over our heads and despite home ownership being a cornerstone of the Gahmen’s political and social platform, most of us are now caught in a quiet desperation to monetize our family home (ie, HDB owners via Lease Buyback Scheme and private condo owners via die-die-must-go-en bloc even when faced with the guaranteed prospect of “twice-the-price, half-the-size, quarter-the-value” post-en bloc)! Are we a pathetic lot or what???

Have we failed in a way, dare I ask rhetorically?

Who else is coming to the en bloc block party?

Update following PM Lee Hsien Loong's National Day Rally Speech on 16 Aug 2009: PM Lee said: "... it’s not just the hardware, but also the heartware, the memories which we are creating, which is what makes Singapore tick”. With such en bloc laws in place - what "heartware" is PM yabbing about when the "memories" are of neighbours forcing you to sell the roof over your head without your consent, throwing acid over your family car, super-glueing your main door to the door-frame, giving you a dirty look within the confines of the lift or taking you to court many times over??? Fostered by the type of laws, policies and practices in our country, "what makes Singapore tick" at the bottomline is the base value of "what's in it for me"! Is that what you, you and you want for our young nation? Sigh ... tragic ...
_____________________________

Hmmm ... now that IRAS is NOT dancing until the music stops, I wonder who else is coming to the en bloc block party this National Day?
http://singaporeenbloc.blogspot.com/2009/07/iras-is-not-dancing-until-music-stops.html

Will the Ministry of Law (MinLaw) step up to the plate soon? Or is MinLaw still jiggling on the dance floor, eyes glazed-over ... in a daze after the 2006/07 kinetic en bloc frenzy and now bobbing mindlessly in a stupor, waiting for the en bloc tempo to pick up?

We waited for nearly a decade before the Land Titles (Strata) Act was amended in Oct 2007 - mostly in form but not much in substance. The Horizon Towers' en bloc saga exposed and settled so many fundamental issues and is a landmark court case for en bloc sales. The Appellate Court judges too did NOT dance until the music stopped. So how long do we have to wait with bated breath for MinLaw to stop pussying around?

It is noteworthy that the en bloc law was promulgated because of urban renewal and higher land-use intensity considerations. These considerations are manifestly under the purview of the Ministry of National Development (MND). Yet MND is NOT the primary driver for this en bloc law! Instead, it is MinLaw who in turn take on various passengers on this merry en bloc joy ride ... from MND, Urban Redevelopment Authority (URA), Building & Construction Authority (BCA), Singapore Land Authority (SLA), the Attorney General's Chambers (AGC), etc.

I probed and prodded about this curious state of affairs as to why MinLaw is the key "driver" (as opposed to being the dutiful "scribe" in crafting the legislation). Not surprisingly, I never got the answer. Hence, I mulled and mused as to whether it arose from a governance perspective (bearing in mind the overwhelming 80:2 composition of our Parliament and the application of party whip in parliamentary vote) - perhaps a need to instill institutional check-and-balance in the en bloc equation ... discreetly distancing MND from the key beneficiaries of this piece of legislation (viz, the Developer-buyers) because of the way Singapore's en bloc laws are skewed under Progressive Corporatism?

Personally, I do not doubt the wisdom of urban rejuvenation and I (grudgingly) accept the necessary evil of higher land-use intensity in teeny Singapore. Hence, these national needs are - to me - valid and, as a citizen, I support the "What" portions (viz, urban renewal and higher land-use intensity) but NOT the "How" bits (viz, the laws/policies as they presently stand). There are times when I ask what can I do for my country, just as there are times when I ask what is my country doing for me!!! Give-and-take, lol!

To achieve a national agenda item, there are many roads to go up this mountain, one of which is to use the engine of PPP (Public-Private Partnership). As PPP is used in many of Singapore's endeavours (locally, regionally or globally as we spread our wings to Suzhou and other parts of China, Indonesia's Batam, Malaysia's Johore Iskandar, etc), working relationships are naturally forged through the years under such PPPs. Whilst there is probably mutual appreciation of each other's desires and limits, I have no doubt that there is at ALL times a clear line dividing the PPP conjugal bed that is NEVER crossed. But that dividing line may well shift more to the left at certain times of the night or on certain days of the month or for certain seasons of the year, eh? After all, there are times to give and there are times to take - part of Life, eh? Whilst PPP is clearly NOT applicable to en bloc initiatives, can we deny that en bloc legislation promulgated by the PUBLIC sector is the very engine oil that directly lubricates PRIVATE sector Developer-buyers' smooth entry into existing sweet spots of prime/popular residential land? Whaddayou think???

In last year's 2008 National Day trilogy, I posited that - at a minimum - en bloc purchases meant "Buy one; Get one free" for Developer-buyers (if both could be sold at double price, then it would be 1-4-4 effectively). In case you are exclaiming "Oh" on a high note as you read this, here are 4 Os for you - Obviously Obscene Orgiastic Orifice for successful en bloc purchases! http://singaporeenbloc.blogspot.com/2008/08/en-bloc-why-it-is-not-right-for.html

If you are not breathless by now, you will appreciate why I concluded that en bloc sales are neither "right" for Majority Consenters (except en bloc flippers and serial condo raiders) nor Minority Dissenters!!! Rightfully, en blocs should PULL UP everybody (NOT just selected parties of Gahmen, Developer-buyers and en bloc flippers)! Instead, en blocs now PUSH DOWN existing owners who find themselves in a "Lose-Lose" situation (especially Owner-occupiers who heeded Gahmen exhortations to be prudent in using Central Provident Fund (CPF) savings to buy only one residential property as the roof over their heads)! The spiel of legal wrangles in Strata Titles Board, High Court and Appeal Court buttress my conclusion as we witness Minority sue Majority and vice versa, Majority sue Developer, and Developer threatens to sue Minority ... even the Strata Titles Boards joined the brawl but they lost!
For 2009, my National Day mullings and musings are provoked by the Straits Times article (10 Aug 2009) entitled "En bloc debate, HK style - Territory's debate holds up a useful mirror to practices in Singapore".

First off, Hongkong's existing en bloc legislation is much tighter and finely calibrated to:

(A) be more respectful of private property rights (90% collective consent),

(B) ensure sustainable redevelopment (property must be at least 40 years' old, taking into account the state of repair), and

(C) empower the tribunal to apply their mind and a more even hand - not just from a silo financial perspective but also from the multi-faceted social, historical, community and environmental perspectives.

Even then, Hongkong's proposed relaxation to 80% collective consent comes loaded with additional conditions where all but one unit has been acquired and the property is at least 50 years' old. The Straits Times reported: "And yet. the opposition to the proposed change in some quarters in Hongkong has been fierce. The change, they say, is tantamount to a subsidy for developers as it would mean that they would not need to entice as many homeowners with a good sale price".

Hongkong already has inherently tighter en bloc legislation even IF the proposed relaxation is passed, bearing in mind that (i) Hongkong severed her colonial ties only in 1997 (merely 12 years ago) compared to Singapore's 44 years of nationhood and (ii) Hongkong is reputedly sharper and nimbler when it comes to wheeling-and-dealing.

South Korea mandates "one-for-one" exchange in en bloc redevelopment to unlock the land value for existing owners even as their country achieves urban renewal and higher land-use intensity.

Singapore has an en bloc framework where there are only two certainties:

(1) Developer-buyer "buys one, gets one free" at a minimum because land value is primarily unlocked for the developer in an en bloc (NOT the existing owners) and the Gahmen takes a cut through development charges, differential premiums and stamp duties; and

(2) Owner-occupiers are guaranteed NOT being able to replace their homes sold by courtesy of their neighbours unless they are prepared to be a Squatter, Refugee, Downgrader or Downsizer - instead of the Utopia promised during the en bloc process, owners (especially owner-occupiers) find themselves in Ethiopia in the en bloc aftermath as they face-up to the harsh reality of "double the price, half the size, quarter the value"!

It almost borders on being a "legalized scam" (a classic oxymoron) conveniently brought to glorious fruition by Homer Simpson's home-truth of "never under-estimate the power of stupid people in large groups"! In "Hotel Singapore Inc" (sigh ... we have since graduated from "Singapore Inc"), I don't know about Majullah Singapura anymore! It is more a case of Merdeka Singapura, eh?

Incidentally, more than two years ago, I posted a blog entry suggesting a minimum 30-year timeframe before an estate could be considered for en bloc sale:
http://singaporeenbloc.blogspot.com/2007/03/en-bloc-knowledge-ten-year-timeframe.html
On the one hand, Gahmen has over the years raised the minimum standard of concrete quality in response to changes in design trends and building technologies. Thus, compared to buildings built in the 1960s-70s, the newer buildings are built with concrete with a higher deterioration tolerance. But on the other hand, Gahmen passed laws that have apparently resulted in the ignominious "youngest en bloc" record of a 4-year old building (Portofino at Sarkies Road) being demolished pursuant to an en bloc sale!

Interestingly, The Straits Times (28 Feb 2009) carried an article by the National University of Singapore (NUS) Civil Engineering Deputy Head who wrote about Design for Disassembly (DfD) process. This involves "the management of resources throughout the life cycle of a building - from extraction of raw materials, through manufacturing, design, construction and operation, to the eventual demolition ... the next generation of buildings constructed in Singapore can be viewed as store houses of future building materials". Whilst DfD is made out to be an environment preservation effort, I have niggling suspicions that it will likely fuel the current "throw-away" consumerism in much the same way that it is now cheaper to discard refrigerators, cookers and air-conditioners than to repair them.

Even more interestingly, there is now a trend toward Biomimicry where future buildings will hopefully be designed and built to mimic Mother Nature's symbiotic "waste-not-want-not" value system. Hopefully, biomimicry technology will be priced at a high enough level to deter "throw-away" consumer behaviour and force our urban planners to be more visionary and proact ahead of the curve (instead of react behind the curve).

Under our present en bloc legislation, we have this 10-year estate age distinction. But, technically, we could go en bloc one day after the Temporary Occupation Permit (TOP) is issued if 90% (by share value and strata title area) agree within this 10-year period (majority consent level drops down to 80% once estate hits 10 years in age). Tracing back to the old parliamentary and Select Committee records, this bizarre "10-year estate age" legislative provision came about because the Gahmen was ostensibly concerned about the possibility of say, a small but new development sandwiched between two small/mid-size but very old estates, thus hampering optimal redevelopment of the two adjoining estates.

However, instead of taking the lead from Hongkong where the tribunal would be given the responsibility and discretion of evaluating the circumstances on a case-to-case basis (perhaps in consultation with urban planning authorities) for such OCCASIONAL EXCEPTIONS, Singapore took what I consider to be the easy and lazy way-out, viz, by applying the law carte blanche but with a higher consent level set at 90% (instead of the usual 80%). Hence, whenever I read press reports of Singapore's Sustainable Development initiatives, I'd take it with a huge dollop of salt and let out a snorting laugh from one end (adoi ... no need to ask what emanates from the other end lol!).

In Life, one can't get too serious, eh? And they say that "Laughter is the best medicine" too!

IRAS is not dancing until the music stops

1. Ambulance chasers, en bloc chasers. In my previous blogs (Aug 2008 and Feb 2009), I commented that whilst we - as a society - have rejected ambulance-chasing lawyers, we have conveniently turned a blind eye to "no sale, no fee" structure in en bloc sales where marketing agents and lawyers would incur out-of-pocket costs and intense efforts for up to 12+12 = 24 months to collect signatures for the Collective Sale Agreement, source/negotiate/commit a Developer-buyer to a Sale and Purchase Agreement and apply to the Strata Titles Boards for a collective sale order. Thus, the marketing agent and lawyer have a lot to lose if the en bloc sale fails. With so much at stake, Behaviourial Economics would likely kick-in. Marketing agents and lawyers are also human beings with frailties and weaknesses ... they may be induced to sail very close to the wind or possibly even over-step the fine line.

In the murky waters of the en bloc pool and the dark alleys of such en bloc estates, the burden of proof is onerous, even for Majority Consenters and much worse for Minority Dissenters.
http://singaporeenbloc.blogspot.com/2008/08/greek-mythology-themis-and-source.html
http://singaporeenbloc.blogspot.com/2009/02/7-purgative-sense-of-deja-vue.html

2. IRAS is not dancing until the music stops. Up till Feb 2009, this "no sale, no fee" connivance apparently extends to stamp duties on en bloc Sale and Purchase Agreements except that the Inland Revenue Authority of Singapore (IRAS) has now stepped up to the plate and (finally) refused to dance to the tune of "no sale, no tax".

On 6 Feb 2009, the Strata Titles Boards (STB) issued Circular No 1/2009 requiring the law firm submitting the application for collective sale order to (i) certify that all documents have been stamped and (ii) provide evidence of such stamping for inspection by the Registrar.

3. The music plays on ... or does it? Under the Stamp Duties Act, Cap 312. stamp duty is payable by the Developer-buyer BEFORE the Sale and Purchase Agreement is being executed. Otherwise, there is a grace period of 14 days from the date of execution to pay stamp duty, failing which it would attract a penalty of double or four times the original stamp duty if stamped within/after 3 months from execution, respectively.

If stamp duty is not paid, the document would not be admissible as evidence.

All this while, the industry practice in individual property transactions is to pay stamp duty on the Sale and Purchase Agreement within 14 days from date of execution (ie, way before the usual 3-month period for legal completion).

However, for en bloc sales, it would appear that the prevalent practice is to stamp the Sale and Purchase Agreement and pay the quadrupled penalty upon legal completion AFTER the collective sale order is issued by STB. Depending on the speed/efficacy of the whole process for each en bloc estate (eg, applying to STB, going through mediation rounds, getting STB tribunal or High/Appeal Court hearing dates, waiting for judgements, etc), legal completion may well be 12-18 months after date of execution of the Sale and Purchase Agreement. Nonetheless, everything is still hunky-dory if STB issues the collective sale order. The Developer-buyer happily pays the stamp duty penalty even though it is quadrupled. At such a steep penalty rate of 4 times, IRAS also has its own version of "en bloc windfall", if I may say so with an impish grin, eh?

4. IRAS getting irate. Now that the music has come to a screeching halt and the pick-up in tempo is likely to take some time ... what with Resilience Package pay-outs, Budget deficits, fall in tax revenues as jobs are lost, salaries are cut and businesses are either being propped up and chalking up losses or are folding-up/re-locating ... with all these weighing us down, IRAS needs to get cracking. Time to top-up public coffers, I suppose.

Interesting questions:

(a) On what basis did the Registrars of STB and High Court admit the unstamped Sale and Purchase Agreements as evidence in tribunal and court hearings for the various estates embroiled in en bloc battles over the past several years? Shouldn't the unstamped document be impounded by the Registrars at the time as they are empowered to do so?

(b) Didn't the Developer-buyer's lawyer advise their client to stamp the Sale and Purchase Agreement within the 14-day grace period? Or did the Developer-buyer as client choose to ignore such legal advice? Was it sheer coincidence during the last en bloc frenzy that so many Developer-buyers of different shapes and sizes consistently ignored such advice of various law firms (assuming prudent legal advice on stamping was dispensed)? If not, then it would mean that the Developer-buyers as clients were ill-advised, in which case IRAS and Law Society could perhaps get their act together and knock some uncommon common sense into the brains of legal eagles (oops ... they are not bird-brained by any stretch of imagination)!

(c) Since the Developer-buyer has the obligation to stamp the Sale and Purchase Agreement, could such Developer-buyer turn around to require the Sale Committee to apply the en bloc deposit towards payment of such stamp duty/penalty in order to admit such document in STB tribunal hearings?

The issue may be twisted into a chicken-and-egg situation because - under the Stamp Duties Act - there is provision for the ad valorem stamp duty (but not the penalty) to be refunded if the Sale and Purchase Agreement were to be rescinded or annulled due to STB's "refusal" of the application for a collective sale order.

(d) Where STB dismisses the collective sale application or declines to issue the collective sale order for whatever reason, would the Developer-buyer now cough up the stamp duty and quadrupled penalty since the en bloc sale now cannot proceed or is aborted? Assuming that the criterion of STB's "refusal" is met under the Stamp Duties Act, it may be time-consuming to get a subsequent stamp duty refund, bearing in mind that there is no refund for the quadrupled penalty!

Since the Developer-buyer is now deprived of the juicy en bloc cherry, would the Commissioner of Stamp Duties be sent on a merry goose chase? For the Developer-buyer, since there is no cherry to make sauce, why be a goose now and lump the quadrupled penalty, eh? For IRAS, sauce for the gander is also sauce for the goose and quadrupled penalty is not to be sneezed (or quacked) at, especially when the pickings are lean.

NOTE: By way of digression, it should be noted that a lot is at stake in an attempted en bloc sale for both the Developer-buyer and the owners (whether as Majority Consenters or Minority Dissenters). The owners would be obliged to sell their homes if STB issues the collective sale order - against their will in the case of Minority Dissenters. Conversely, if STB does not issue the collective sale order, shouldn't the Developer-buyer have something at stake that is commensurate with the risks/benefits of the en bloc transaction?

Suggestion: Forfeiture of Developer-Buyer's en bloc deposit but with refund of stamp duty (but not the penalty) unless non-issuance of the collective sale order is due to misconduct of the Sale Committee, Consenting Majority, marketing agent or lawyer. Otherwise, there is no inherent check-and-balance to deter Developer-buyer from less-than-scrupulous conduct, covertly or overtly, directly or indirectly through proxies or nominees. After all, if STB does not approve the collective sale application due to, say, lack of good faith arising from any relationship between the Developer-buyer and the owners (ie, one of the grounds provided under the Land Titles (Strata) Act), then there is no skin off the Developer-buyer's nose because both the en bloc deposit and stamp duty (if paid) would be refunded!!!

Yet another classic case of having your cake and eating it too, eh? Reminiscent of the typical Wall Street culture of "Heads, I Win; Tails, You Lose", correct? With the authorities persisting in hands-off approach and without legislative protection, Sale and Purchase Agreements would naturally be drafted to skew towards the Developer-buyer's advantage. The "no sale, no fee" stake is probably too high for the en bloc lawyers to object violently to such skewed drafting, especially when their clients (viz, typically pro en bloc Sale Committee members, clueless Majority Consenters and stonewalled Minority Dissenters) won't or can't know any better.

5. IRAS playing catch-up with Cha-Cha-Cha. Under the current Public Consultation for the upcoming Income Tax (Amendment) Bill 2009 that will close on 14 July 2009, a new policy concession is being proposed, viz, the profit from the sale of only one property on or after 1 Jan 2010 will not be taxed if the individual owner has not disposed of any other property within 4 years prior to such sale.

With this 4-year look-back window, the Gahmen will share in the spoils of the serial en bloc raiders and the sub-sale flippers!!! As the last en bloc frenzy started in 2006/2007 and the Property Market Index hit a new peak by 1H2007, there is a clever twist in crafting this amendment. Applause for IRAS ingenuity! Ooops, not so fast ... because the flippers are more zany and nimble than IRAS - they are now offloading all their units (some even at a loss) before ringing in New Year's Day on 1 Jan 2010!!! As these flippers sip their champagne and eggnog on the New Year's Eve on 31 Dec 2009 with colourful fireworks booming off against the backlit sky, they would drink to the health of the IRAS tax snoops no doubt! Who wants to bet that the flippers will outwit IRAS?

Putting aside any gaps in this proposed amendment, does this 4-year window send a message that it's perfectly kosher to flip and artificially jack-up real estate demand from either sub-sale or en bloc flips so long as you carefully time your flips once-in-every-fourth year. Hmmm ... is there some "full moon effect" on our policy makers in introducing such "leap year" element?

Given the nature of real estate purchases, a typical home-buyer or genuine investor is likely to hold the property for at least ten or five years, respectively. As an owner-occupier, how many of us would move house every 4 years? As an investor-occupier, would it take us less than 4 years to fully amortize renovation or furniture/fittings expenses, bearing in mind financing costs and rental/tenancy fluctuations?

Since the present law already provides for gains from property sales to be taxed as "trading gains" or “gains or profits of an income nature”, is this yet another case of a law not enforced and closing one eye or looking the other way when people have been merrily flipping in sub-sales and en bloc sales? Similar to non-enforcement of stamping legislation for En Bloc Sale and Purchase Agreements under the Stamp Duties Act prior to Feb 2009? Why???

Hmmmm ... and I thought that Singapore is known for its rule of law (and enforcement of laws). Sigh ... so much for Home Ownership policy as a cornerstone of the Gahmen's political/social platform that consequently sanctions use of nest-egg savings from Central Provident Fund to buy residential properties. Another sigh ... so much for the official economic spiel about clampdown on artificial (speculative) demand exacerbating asset bubble boom-bust risks. A bigger sigh ... the fact that "en bloc potential" is already an entrenched investment criterion in the real estate market puts lie to parliamentary speeches about "urban rejuvenation", "higher land use intensity" and "creating more housing units for Singaporeans" when this unjust law was promulgated. Well, Cha-Cha-Cha - one step forward and two steps back? Or more like a salacious La Bamba grind-gyrate with Eyes Wide Shut?

Executive, Legislative, Judiciary, sans The Fourth Estate of Mass Media

Update 2: Get this ... it turns out that Obama is an acronym for Originally Born in Africa to Manage America!

"Born" is used under the purposive approach. Being mindful that we should NOT carry purposive interpretation too far, "born" should be technically "birthright" under the 1948 British Nationality Act and the 1963 Constitution of Kenya! http://www.factcheck.org/askfactcheck/does_barack_obama_have_kenyan_citizenship.html

Update 1: On the right-hand column of this blog, read about the acronym "AIG" and what President Barack Obama said about AIG bonuses in The Tonight Show with Jay Leno on 19 Mar 2009. Read it verbatim in this blog. Compare it with the following summarized version in The Straits Times (21 Mar 2009 edition): "Mr Obama reacted coolly when asked about the AIG controversy on the Jay Leno show, describing it as part of the culture of greed and entitlement on Wall Street that must be checked." After the comparison, I leave it to you to draw your own conclusion!

Why does en bloc law matter?

It matters ... in a civilised society (even if we do not have much of a civil society) ... in our system of parliamentary democracy with separation of powers between the Executive, the Legislative and the Judiciary ... more so in the face of our legacy of single-party parliamentary dominance (currently 82:2) ... especially when our elected representatives of the people are expected to uphold their parliamentary honour of "Dictum meum pactum" ("My word is my bond") ... particularly as we globally suffer today's consequences from yesterday's failure of checks-and-balances at multiple levels (ranging from the regulators to the regulated, from the industry to the market to the end-buyer).

What do others say???? The Intelligentsia/Academia. The Judiciary. The Civil Service. The Legislative. The Executive. The Industry Player (legal profession). What do they say? Let's read on ...

1. THE INTELLIGENTSIA/ACADEMIA. NUS Business School Associate Professor Ter Kah Leng published an article in the Mar 2008 edition of the Singapore Academy of Law Journal entitled "A man's home is [not] his castle - En bloc collective sales in Singapore". In this insightful commentary, she listed the following as one of the implications of recent developments:

QUOTE [Capitalization emphasis is by The Pariah]:
136 The 2007 Amendments introduced more than 30 amendments after extensive industry and public consultation and feedback. While the 1999 Amendments facilitated en bloc sales, the recent amendments seek to regulate the market more and to “minimise complaints of harassment, unfairness and lack of transparency”. This was reiterated by the LAW MINISTER in the Second Reading of the Amendment Bill 2007 when he said that the NEW LAWS are intended to provide ADDITIONAL SAFEGUARDS RATHER THAN TO FACILITATE EN BLOC SALES. Recent HIGH COURT DECISIONS appear to be AT VARIANCE WITH THIS STATEMENT. WHILE PURPOSIVE STATUTORY CONSTRUCTION IS THE PREFERRED MODERN APPROACH, IT IS TIMELY TO HEED JUDICIAL WARNINGS THAT THIS SHOULD NOT IGNORE THE SCOPE AND INTENT OF THE GOVERNING STATUTORY PROVISION NOR AMOUNT TO A JUDICIAL REWRITING OF LEGISLATION. PURPOSIVE STATUTORY INTERPRETATION SHOULD NOT BE CARRIED TOO FAR.

2. THE JUDICIARY. High Court written judgement dated 3 Mar 2009 for the Regent Court en bloc case heard on 30 Oct 2008:

QUOTE [Capitalization emphasis is by The Pariah]:
21 At the Second Reading of the Bill containing the provisions for collective sales at Singapore Parliamentary Debates, Official Report (31 July 1998), vol 69 at cols 601-607, the Minister of State for Law said: "I had informed this House on 19th November last year that Government would be amending the law to make it easier for en-bloc sales to take place. The current position is that a single owner, for whatever reason, can oppose and thwart the sale. Government has received many appeals and feedback from frustrated owners whose desires to sell their flats or condominiums en-bloc have been so thwarted. As a result, these buildings cannot take advantage of enhanced plot ratios to realise their full development potential, which would have created many more housing units in PRIME 999-year leasehold or freehold AREAS FOR SINGAPOREANS. A SECONDARY BENEFIT is that these developments, especially the older ones, could have been REJUVENATED through the en-bloc process."

It was clear from this speech and others made in Parliament that the MAIN PURPOSE of the provisions relating to collective sale in the Act was to make it easier for collective sales to go through in order to promote BETTER UTILISATION of scarce land resources in Singapore and also URBAN REDEVELOPMENT.
END QUOTE.

Ugh, since when did a "SECONDARY benefit of rejuvenation" propounded in Parliament become the "MAIN purpose of promoting better utilisation of land and urban redevelopment" in our hallowed halls of justice??? This is but one example of many preceding judgements. As the courts sombrely dish-out obiter dicta and set crushing precedents, the already uphill en bloc legal battles are made even more tortuous when the "purposive statutory interpretation" is "carried too far", as forewarned by Associate Professor Ter Kah Leng in the quote in para 1.

To me, this is evident when a "secondary benefit" becomes the "main purpose". The PRIMARY BENEFIT of "creating more housing units in prime areas for Singaporeans" is all but forgotten. Talk about selective amnesia!!! Nobody invokes this primary benefit of en bloc as part of the purposive approach. Why??? The authorities with whom I have engaged maintain a sheepish silence - probably too embarrassed and/or dumbstruck.

3. THE CIVIL SERVICE (URA/SLA). As mentioned in earlier blog entries, the statistics from the Urban Redevelopment Authority (URA) published in Business Times (27 Mar 2008) showed the percentage of foreigners’ non-landed private residential purchases SHOT UP from 16% in 2000 to 29.1% in 2007 – more than 80% increase in 7 years!

Another chart showed that – within the same 2000-2007 time span – Singaporeans’ share of non-landed private residential purchases consistently DECLINED IN ALL GEOGRAPHIC REGIONS. In contrast, foreigners’ share DOUBLED OR TREBLED in the range of 114%-200%. If PRs are aggregated with foreigners, the NON-Singaporean share also increased substantially from 61% (Rest of Central Region) to 95% (Core Central Region). As the prime/popular residential districts are already built-up (except for the new residential enclaves in Marina Bay/Sentosa), this STATISTICAL PURCHASE DISPLACEMENT by foreigners is likely a direct consequence of en bloc sales facilitated by en bloc law. Whilst condo purchases by Singaporeans will likely exceed those by foreigners in the coming months as the economic picture becomes definitively grim, it would be more honest if the authorities could dissect the upcoming statistics more meaningfully to distinguish the new purchases by HDB upgraders from those by en bloc sellers.

These URA statistics from Year 2000 are very telling. Why? Because it was only in Oct 1999 that the Land Titles (Strata) Amendment Act introduced the concept of 80% (90%) Majority Consent where the private property rights of Minority Dissenters are abrogated by law. Thus, with this law, the Gahmen wedged its big foot into the natural interplay of market forces.
These statistics provide yet one more piece of damning evidence that the PRIMARY BENEFIT envisaged by our Legislators in pushing through this en bloc law (ie, "creating more housing units in PRIME AREAS FOR SINGAPOREANS") has totally flown out of the window! Indeed, more housing units have been created in PRIME AREAS - but for the FOREIGNERS! Even more ironically, it was AT THE EXPENSE OF SINGAPOREANS because the locals were already plonked in these prime areas before they were rudely yanked out a la en bloc! What else is new, eh?

In the midst of the 2006/07 frenzy, the media also went on an initial spin and hyped about "en bloc windfall" amidst yelps of mass hysteria "Wow, I bought my condo for $1mn and now I will be getting $2mn from en bloc, 100% profit, sell-sell" or "Cool, man, I get $1.5mn by selling my unit individually but I get $2mn by selling en bloc, $500k premium". When you bought a gold bar for US$10k and now you are getting US$20k whilst the bullion market is quoting US$30k, don't you think you'd look pretty silly even with your 100% profit?

Even as swathes of private residential properties went en bloc and as the Strata Titles Boards got buried under a growing mound of en bloc disputes, the Singapore Land Authority (SLA) kept a deliberate silence and did NOT take a PROACTIVE STANCE to educate the public about land valuation methodologies (eg, Residual Land Valuation, Comparative New Unit Replacement Market Valuation, implications of Development Baseline computation, Outline Planning Permit findings, etc). For most owners who probably buy one or two condos in their entire lifetime, how many of us know there is such a thing called Residual Land Valuation?

The authorities' convenient silence probably dovetails with the national vision that the Re-making of Singapore would be completed in a decade or two, as expressed by MM Lee Kuan Yew during his visit to Mumbai (Straits Times, 31 Oct 2007).

Blog Amendment, 5 April 2009:
Interestingly, in 2007, there was a little blurp about an en bloc sale in the Rangoon/Moulmein Road area involving 5 smallish condos (viz, Norfolk Court, Northern Mansion, Mergui Court, Mergui Lodge and The Mergui) that nearly unravelled because SLA whacked in an astronomical asking price for the 1000 sq m strip of road section that the Developer-buyer needed to buy from SLA to amalgamate the five en bloc plots into a single plot. SLA is not known to be frivolous in stating their opening price - very unlike opportunistic durian vendors, right? So the Developer-buyer then went into a tizzy to lobby and appeal to SLA. The appeal worked! SLA slashed the land premium by 50% from $16.74 mn to $8.37 mn! Even durian vendors don't give 50% discount unless they reckon that the fruit section they split for your inspection belies the duds in other compartments. Whether this is thorny or fishy, let's follow the press commentary trail ... and, assuming the press reports are accurate (since there is no subsequent correction, to my knowledge) you can then draw your own conclusion:

Straits Times, 22 Nov 2007: “... if the small pieces of state land in between are thrown in, the developer will have a site of 87,092 sq ft … in any case, three of the developments could not have otherwise been redeveloped on their own. ‘They need each other because there’s a 30m buffer requirement from the expressway,’ said Mrs Yong.” – Blog note: Mrs Yong is the en bloc marketing agent. SLA would have these land/planning facts at hand when they quoted their original asking price of $16.74 mn.

Straits Times, 5 Aug 2008: “… sources said that the deal hit problems when the firm tried to buy a 1,000 sq m section of a road from the SLA. … Industry sources told The Straits Times that the SLA had priced the land at $16mn – double what KSH and the industry experts expected. – Blog note: KSH is the Developer-buyer. This means that the Developer-buyer and industry expert (eg, the en bloc marketing agent) in making the en bloc offer to owners had priced the road section at $8mn. At $120mn en bloc price for the five pieces of condo land of 74,355 sq ft, it works out to be $1,614 psf. As the industry experts expected to pay half the SLA asking price for the 1,000 sq m (10,764 sq ft), that would mean the adjoining road section would be priced at $778 psf (48% of market rate).

Business Times, 30 Sep 2008: “KSH project manager ... said that SLA’s revised offer was more in line with the price ‘initially expected’. The buyers were caught off guard by the initial $16.74 million land premium. ... The SLA said that it had originally priced the land ‘similar to that offered by the developer to the existing land owners along Mergui Road’. However, on review, it noted the land had some development constraints and considered the revised price ‘in order to facilitate the development proposal’.” – Blog note: As stated above, SLA would have at hand all land/planning facts at the time of quoting the original asking price for road section. By selling state land at half the market price of the adjoining condo land, was it effectively giving a 50% discount? As the road section's sale proceeds go towards government coffers, is it in order for a state agency to do so "in order to facilitate the development proposal" of a commercial enterprise?

4. THE LEGISLATIVE. As amply quoted in paras 1 and 2 above, I will not repeat ad nauseum what was said in Parliament by (i) the then Minister of State for National Development during the Second Reading of the Bill introducing Majority Consent under the en bloc law (1998) and (ii) the then Minister for Law during the Second Reading of the Amendment Bill reviewing various aspects of the en bloc process (2007). Nonetheless, it is noteworthy to make the point that during the 1998 Second Reading , the words "for Singaporeans" were even repeated: first, in moving the Bill for the Reading (Hansard, vol 69 at cols 601-607) and second, in the reply after various MPs/NMPs voiced their concerns (Hansard, vol 69, cols 632-634). Alas, these words have since been forgotten ... or so it would appear ...

Interestingly - outside of the en bloc context - during the Feb 2009 Budget Debate for Ministry of National Development, NMP Eunice Olsen asked who we were building or creating this global city for. In Minister Mah Bow Tan's speech, he replied: "This is a very relevant question. We are striving to be a global city of distinction ... but above all, we want to build a city that ALL SINGAPOREANS CAN BE PROUD TO CALL HOME".

In the following para 5, we will see what Minister Mah means. After all, "home" in Leonie Hill is also "home" in Rivervale! You just go from Hill to Vale, from District 9 to District 19, from Orchard Road to Sengkang. What's the problem with you people, eh?

In the face of (a) the ferocity of the en bloc frenzy in 2006/07 which will likely repeat in the next wave, (b) the unrelenting zeal in purposive judicial approach, (c) the way the en bloc law remains - in my opinion - unjustly skewed for the last 10 years even after the last legislative review in 2007 and (d) the untenable en bloc business modality for extant home owners as a direct operation of such law, I honestly do NOT know what to make of MND's tag line of "ENDEARING HOME"! Every time I come across that tag line, it seems to mock at me! Endearing??? http://singaporeenbloc.blogspot.com/2008/08/greek-mythology-themis-and-source.html

5. THE EXECUTIVE. In the midst of the 2007 en bloc frenzy, the Minister for National Development, Mah Bow Tan, was interviewed and he gave this off-the-cuff answer (Sunday Times, 17 Jun 2007): “If you can’t buy an executive flat, buy a 5-room. If you can’t afford central area, go to the suburbs. If you can’t afford Tampines, go to Woodlands or Yishun.”

Minister Mah then went on to spout: "The FUNDAMENTAL REASON behind an en bloc redevelopment is really to make sure that older parts of Singapore have a chance to be rejuvenated and redevelop themselves" and "if we don't have this, we are going to have a static situation where things are going to run down and there is no opportunity for PEOPLE TO NATURALLY REDEVELOP".

Huh??? The rejuvenation and redevelopment are "SECONDARY BENEFITS", if we still remember what Minister of State for Law said in Parliament in 1998? Now in 2007, the Minister for National Development says rejuvenation is the "FUNDAMENTAL REASON". "SECONDARY BENEFITS" now became "FUNDAMENTAL REASON"??? Pray, who are these "PEOPLE" that Minister Mah referred to within this context of REdevelopment? It is likely that he meant the Corporate Developers because the abovementioned statistics from URA (URA is under MND's umbrella) unequivocally confirmed that the percentage of Citizen Purchasers of condos declined whilst the Foreign Purchasers spiked AFTER the en bloc law was introduced. Errr ... I thought "people" should mean "citizens who voted for their Member of Parliament to represent them"?

Compounding it perhaps, this kind of ministerial doublespeak was dutifully parroted in press reports (instead of being intelligently correlated back to 1998 parliamentary speech and contextually queried in incisive journalistic tradition). Thus, it may have confused our Judiciary and may have misled them to stray so far out into the "purposive" zeal and thus misinterpret it as the "MAIN PURPOSE" of the law? Nah ... this cannot be because we do have the finest of pre-eminent minds honed to the highest degree in our Judiciary most certainly! Such ministerial doublespeak is not helpful, to say the least.

Perhaps - as in a drunken stupor or in a realm of the sub-conscience - what was said when drunk or when dreaming may be more reflective of the truth, you think??? What was said by Ministers and Ministers of State in Parliament in 1998. 1999 and 2007 were well-considered, prepared in advance and probably rehearsed. Whatever these parliamentarians said have all been (i) diametrically CONTRASTED by post-en bloc ground realities of being Squatters, Refugees, Downgraders and Downsizers (even for those "lucky" en bloc'cers who "SELL HIGH pre-2H 2007 and BUY LOW post-2H 2008"), (ii) duly NULLIFIED by official statistics and (iii) roundly CONTRADICTED by guttural press comments! So what are our parliamentarians and ministers doing about it??? Any accountability?

In view of the foregoing PROVEN predicaments, WITHOUT AN ADDITIONAL MANDATORY OPTION OF 1-4-1 EXCHANGE - how can the parliamentarians HONOUR THEIR WORD when they passed the en bloc law in 1999, believing that it would result in the creation of "many more housing units in PRIME AREAS FOR SINGAPOREANS"? Pray ... tell me how??? Is their word their bond? We are a House of Cards (don't even breathe "A Man's Home Is His Castle")! How much longer do we have to wait since the law was first passed in 1999 and amended in 2007 before the Gahmen will "DO RIGHT" FOR SINGAPOREANS and apply the true spirit of TRI-PARTITISM in the Re-Making of Singapore (instead of the present business model where it is at the expense of existing owners who "SACRIFICE" their homes for the national agenda of urban redevelopment and higher land-use intensity)? En blocs must pull up EVERYBODY (NOT just selected people - ie, flippers and corporate developers). Surely, we must NOT leave our own people behind as we re-make Singapore?

6. ONE INDUSTRY PLAYER (legal profession). In this arena of en blocs, there are many industry players: Gahmen, Developer-buyers, property marketing agents, lawyers. Lawyer Philip Fong of Harry Elias Partnership verbalized the need for a Best Practices Code for En Bloc Sales during an interview with Channel News Asia sometime in May 2007. Whilst MinLaw appeared receptive to this idea at the time, nearly two years on ... nothing was codified. Whilst our society has rejected ambulance-chasing lawyers, we have opted to look the other way when "no sale, no fee" is the en bloc industry standard that bred a sub-species of die-die-must-sell lawyers! Bearing in mind the Torquevillean propensities, such Best Practices Code should not be limited to the "do's" but also include the "don'ts".

Another lawyer who specialises in en bloc sales, Dr S.K. Phang of Phang & Co, was quoted in Weekend Today (14 April 2007): "A bona fide home owner should be offered an exchange ...". Quite evidently, Developer-buyers have NO SENSE OF CORPORATE SOCIAL RESPONSIBILITY despite being accorded the PRIVILEGE of GAHMEN-PRIVATE SECTOR DIALOGUE AND CONSULTATION. This dialogue has resulted in a piece of en bloc legislation largely calibrated to facilitate corporate developers' exploitation of the law to its fullest potential - viz, unlocking the value of prime/popular residential land which would otherwise NOT be easily available for redevelopment, harvesting almost double/triple "net saleable area" and selling the doubled/tripled space inventory at nearly double/triple the en bloc psf purchase price. Numerous Minority Dissenters during en bloc sale process right up to mediation level at Strata Titles Boards' tribunals have asked (and pleaded) for 1-4-1 exchange on same-size, same-level, same-orientation basis - ALL TO NO AVAIL.

When the playing field is so GROSSLY UNLEVEL, without the protection of carefully calibrated laws and regulations, 1-4-1 exchange could be a minefield! One mis-step in the commercial negotiation could result in such contractual exchange blowing up in your face. En blocs cut across an array of expertise in law, finance, behavioural science, construction, urban planning, economics and commerce - do the authorities seriously expect residential property owners to have such expertise to effectively negotiate one-on-one with corporate developer-buyers when both the en bloc marketing agent and the en bloc lawyer operate under a "no sale, no fee" basis? Whilst Paterson Lodge offers one exemplary example of a 1-4-1 exchange, we should be mindful that the Paterson Lodge en bloc was based on 100% consent. If 100% consent was so reasonably achievable, then MinLaw wouldn't need to push so hard over 1.5 years to introduce the en bloc law, correct??? It is facetious for MinLaw to uphold Paterson Lodge as an example that 1-4-1 exchange would be best left to market forces, especially when LTSA directly impinged on market forces epitomized by 100% consent!

For most Singaporeans, a condo is the most SUBSTANTIVE asset in their investment portfolio and is INTEGRAL to their retirement financial planning. By choosing to buy a condo, they paid a huge PREMIUM (especially for freehold tenure and choice location in land-scarce and densely populated Singapore). These owners ploughed in substantial PRIVATE savings and provident funds (i) at a PRICE LEVEL, (ii) for a LOCATION and (iii) at a TIME that they consider APPROPRIATE TO THEM.

The en bloc law forces the Minority Dissenters to liquidate this substantive asset against their will at a price/time unacceptable to them which would NOT enable them to buy a replacement unit in the same vicinity. This liquidation is at the behest of 80% (90%) of their neighbours who want to exit from this asset class for up to 80 (90) reasons unique to each of them.

This enforced liquidation is even more dire for those who used their CPF provident funds and bought/refinanced their housing loan after Sep 2002 because CPF charge would be robotically 2nd-ranking for such cases. Under this 2nd ranking, any shortfall to the CPF principal withdrawn for such property purchase and/or CPF interest that would otherwise have accrued would NOT qualify as "Shortfall" to prevent redemption of CPF charge which is one of the few grounds enshrined in LTSA to defeat the en bloc sale (assuming that it is not "re-interpreted" under a purposive approach). I have suggested that for Minority Dissenters with 2nd ranking CPF charge, their CPF principal and accrued interest should be deemed as 1st ranking for purposes of computing "Shortfall" in an enforced en bloc sale. As asset disposal is NOT at will for Minority Dissenters, this "deeming as 1st charge" would lend credence to CPF Board's underpinning mission "to enable Singaporeans to have a secure retirement” without straying from the other cornerstone value of personal accountability for one's investment decision.

But then CPF Board probably wants to have its cake and eat it too! On the one hand, the CPF Board reckons that you are still NOT fit to manage your own provident savings even at age 65 (yeh, that's how old you must be before the Board would allow you to draw a monthly pittance from your annuity). On the other hand, the CPF Board does NOT see it fit to protect your provident savings despite knowing that such sale of a residential property asset bought with CPF funds was FORCED upon you as Minority Dissenter in an en bloc!
Sigh ... whilst some of us may go dotty from age 65, the CPF Board appears to have been acting daft at a tender age of 32 (CPF Board was born in 1955; with effect from 1 Jan 1987, Minimum Sum was introduced with drawdown set at age 60 which has since been pushed back to age 62 and then graduated from 2005 to a range of ages 63-65). Perhaps, the Board is not as daft because CPF withdrawal age is tied-up to larger national issues of exchange rate and monetary management when Singapore's current net CPF contributions morph into net CPF withdrawals within the next two decades!!! I reckon the Gahmen is probably telling us less than what they have already projected whilst they focus their zoom on future inflationary pressures and increased life expectancies and the blah. They tell you some BUT they don't tell you all!

In my efforts at active citizenry on this en bloc issue, I encounter a range of responses from well-meaning souls:

- why bother because whatever the public says will just go into the Big Black Hole;

- why would Gahmen care when it affects less than 12% Singaporeans even if ALL condos are en bloc'ced tomorrow (12% is an approximation after excluding (i) landed properties and (ii) condos owned by foreigners/PRs who have no voting power at General Elections);

- why would anyone care when they are (i) HDB public housing heartlanders, (ii) landed property owners, (iii) condo owners who were already en bloc'ced out in the 1999 and 2006/07 frenzies, (iv) condo owners who have already "escaped" en bloc (eg, after winning their en bloc legal battles, or failed to garner the Majority Consent tipping point, or failed to find Developer-buyer, etc) or (v) condo owners who are too new to be en bloc'ced (eg, Temporary Occupation Permit was issued within the last few years);

- why worry when the next en bloc frenzy probably will be 5-10 years after the 2007 peak (the lower range is estimated by the school of thought of "Third Millennium=Short Cycles"; the higher range is from the school of thought of "2009=1929 L-shape economic recovery");

- why fret now when the authorities are open to further review as they wait-and-see ... except that when the next frenzy does come, it will likely be fast and furious because that is the inherent nature of all frenzies and legislative responses are anything but fast! In a frenzy, there is usually more heat than light, man! In today's environment, all over the world - from the USA to China - captains of governments and industries are shifting gear to "Head in, Hands on" approach, no more the old school of "Hands off" approach ... Get it? Then get moving, man!

I do take their points. These well-meaning souls are just being pragmatic, realistic. For that matter, why would anyone care about a sterilization cash grant pegged to the mother's age/education level and the family size/household income because that too does NOT impact the majority of our population? Why would CPF 2nd ranking matter to me when it is not even relevant for my own case?

But to me, it matters! There is a thread common to all these - whether it is about en blocs, euthanasia, police powers, environment degradation, HDB public housing lift upgrading programme, healthcare policies, school admission criteria, barrier-free access building standards, and whatever else that may pop-up tomorrow.

If it matters only when it concerns you, then very little would matter if you were Bill Gates or Jigme Khesar Namgyel! Then, we would all be the poorer for it even if we are the most wealthy nation one degree north of the Equator!

Yes We Can Too!

From adversity, comes opportunity – an opportunity to “do right” by the people, to re-balance. Here's a 9-part sojourn to reflect and inflect ...

1. TEASER: What is the point of Urban Renewal?
2. MOCKTAIL (non-alcoholic cocktail): Have we left our people behind?
3. APPETIZER: How to bring our people along in Singapore’s Re-Making?
4. NUGGET: Why en bloc law was (and still is) needed?
5. POSERS: What is today? What will be likely tomorrow?
6. DIGESTIVE: Why skew the law?
7. PURGATIVE: A sense of déjà vue!
8. NUTTY PEANUTS: Myths debunked!
9. CROWN JEWEL: 80% to en bloc The Istana?

Seized by the tumultuous collapses of this period – from East to West, spanning the spectrum from communist regime to celebratory capitalism …

– China is ramping up Social Welfare to assure her people of national safety nets in order to boost domestic consumption;

– the United States of America is re-inventing herself towards Activist Government to reverse the flow of “trickle down” to “trickle up” effects in order to make the rich contribute more to society and thus build-up the middle class.

From the footpaths in rural China ... to the supermarket alleys in Germany ... to Main Street in the US with much less buzz these days, there is a distinct dissonance with the past excesses leading to the present mess! Dismay when a surgeon refused to operate unless the fees are paid upfront. Disbelief when a cashier was sacked over a 1 euro refund coupon in stark contrast to CEOs who flew in on private jets to ask for hand-outs. Disgust when the board of directors approved executive bonus pay-out even as the company crumbled. Distrust when those who are supposed to govern, regulate and/or protect chose to break faith with the People and instead crossed over to join hands with the Corporates in the name of "Progressive Corporatism".


In the midst of this generational wave change, where does Singapore stand? “Social welfare” is unspeakable? “Activist Government” is unthinkable? “Trickle up” is untimely? Where do we re-balance ourselves (if at all)?

En blocs have a significant wealth effect on private residential owners who are (or were?) largely middle to upper-middle income Singaporeans (other than at the super-luxury condo category which is dominated by foreigners anyway). So???

At the 20 Sep 2007 parliamentary debate of the en bloc law, the then Minister for Law, Prof S Jayakumar put on record in his closing remarks that "the position I take is that this is an ongoing process ... my ministry, together with the other agencies, will monitor very closely the operation of these new provisions ... but if it is necessary to make further amendments, then we have no hesitation to do so".

"Change" is possible??? Will Singaporeans say "Yes We Can Too"???

1. TEASER: What is the point of Urban Renewal?

In this new year of 2009, I would like to re-frame the question to ask: “What is the point of our Singapore laws to facilitate the national agenda of urban renewal and higher land-use intensity?”

Just so as to have a brand new, gleaming all-glass 36-storey apartment block on Holland Road (instead of a 15-storey block that grossly under-utilized the existing plot ratio)???

What is the point of having shiny new buildings if we don’t BRING OUR PEOPLE ALONG WITH US in our quest of Re-making Singapore???

A country is NOT made up of a collection of swanky buildings but of the citizens who live, breathe and dream in these buildings (even as we are labelled as “lesser mortals” at best and ungrateful domestic riff-raff at worst).

More elaboration is in my blog entry dated 9 Feb 2009 entitled “Purpose of ‘purposive’ – Gillman Heights verdict”. http://singaporeenbloc.blogspot.com/2009/02/purpose-of-purposive.html

2. MOCKTAIL: Have we left our people behind?

We are NOT bringing our people along with us in this quest of Re-making Singapore - NOT on this Trojan Horse of en blocs! Words and numbers say it all.

2.1 Words from the horse’s mouth – When interviewed about en bloc sales, Minister for National Development, Mr Mah Bow Tan, was quoted in Sunday Times of 17 Jun 2007: “If you can’t buy an executive flat, buy a 5-room. If you can’t afford central area, go to the suburbs. If you can’t afford Tampines, go to Woodlands or Yishun.” (please refer to my blog entry dated 29 May 2007 entitled “In between … evolving a ‘Bagel Class’ of Singaporeans”). http://singaporeenbloc.blogspot.com/2007/05/in-between-evolving-bagel-class-of.html

In the same vein about land use/supply forces that drive en bloc law: Three years ago, Minister for Health, Mr Khaw Boon Wan, first mooted the idea of retirement villages in Johor, Batam and Bintan (Channel News Asia, 17 Apr 2006). Recently, The Straits Times and Today newspapers reported on 10 Feb 2009 that Minister Khaw visited a Johor Bahru site with an investor-developer who is planning to build a nursing home there for elderly Singaporeans. Reason: Land and labour are cheaper across the Causeway. Amidst the public hue and cry that followed, replete with comic spoof and many who froth and foam about the raison d'être of our Health Ministry, these were my wry observations:

– We sent our kids to Western universities and they will send us to JB nursing homes!

– In JB: Nurseries for our babies; nursing homes for our oldies! Because looking after babies and oldies are equally time- and labour-intensive. Kids need lots of space to run around. Exponentially growing number of chronic oldies take up precious space in land-scarce Singapore.

Have we forgotten our people, the human touch, the essence of public service? It would cleanse our hearts and minds to heed the words of Mr Barack Hussein Obama who addressed his White House staff and Cabinet on the next day after his 20 Jan 2009 inauguration as the 44th President of the United States of America: “We are here as public servants, and public service is a privilege. It’s not about advancing yourself or your corporate clients.” Hear, hear!

2.2 Numbers from the stables – The stables of “URA/Jones Lang LaSalle Research” provided the statistics that were reported in Business Times on 27 Mar 2008, nine months after the words from the horse’s mouth. Sadly, these statistics confirmed my projection of a Bagel Class of Singaporeans (please refer to my blog entries dated 29 May 2007 entitled “In between … evolving a Bagel Class of Singaporeans” and reiterated on 7 Aug 2008 entitled “So what’s the alternative in the END”).

Yeeha … I blogged about this Bagel Class projection in May 2007, a fortnight before hearing the words from the horse’s mouth in Jun 2007! I betted on the wrong horse, eh? The numbers are STARTLING - just over a 7-year time span!!!

One URA chart in the Business Times showed the percentage of foreigners’ non-landed private residential purchases went up from 16% in 2000 to 29.1% in 2007 – more than 80% increase in 7 years!

Another URA chart in the Business Times showed that – within the same 2000-2007 time span – Singaporeans’ share of non-landed private residential purchases consistently DECLINED IN ALL GEOGRAPHIC REGIONS. In contrast, foreigners’ share DOUBLED OR TREBLED in the range of 114%-200%. If PRs are aggregated with foreigners, the NON-Singaporean share also increased substantially from 61% to 95%.

Whoa ... these 2008 statistics NULLIFIED what was said nearly a decade ago in 1999 by the then Minister of State for Law, Ass Prof Ho Peng Kee, when he moved the Second Reading of the en bloc law in Parliament about creating “MANY MORE HOUSING UNITS IN PRIME 999-YEAR LEASEHOLD OR FREEHOLD AREAS FOR SINGAPOREANS”. [Capitalization emphasis is by The Pariah.] Looks like the additional housing units, especially in prime areas, went to the FOREIGNERS! Did the horse bolt from the barn and then got lost in the prime areas?

3. APPETIZER: How to bring our people along in Singapore's Re-making?

In my earlier blog entries, I have whined and harped ad nauseum about bringing our people along in the Re-making of Singapore. How? By adding one more settlement option for en bloc sales, viz, 1-4-1 exchange.

Hence, as early as 1 Mar 2007 (two days before the then Minister for Law, Prof S Jayakumar’s parliamentary speech was reported in the press about upcoming legislative review of the Land Titles (Strata) Act), I submitted a paper to the then Law Reform and Revision Division of the Attorney General’s Chambers on this principle of equity in offering “exchange” option to owners ensnared in en bloc sales. My first “exchange” blog entry was on 26 Mar 2007, as further refined with the passage of time and repeated in numerous subsequent blog entries in Apr, Nov, Dec 2007 and culminating in my last National Day blog entry of 7 Aug 2008. http://singaporeenbloc.blogspot.com/2008/08/so-whats-alternative-in-end.html

In fact, my proposed solution is more than 1-4-1 exchange. It encompasses about a HOLISTIC APPROACH to "manage" the en bloc beast instead of letting the crazed bull run helter-skelter in an en bloc frenzy. How?

One suggestion: By developing an en bloc quota system by (a) geographic regions, (b) estate type and (c) estate age - in much the same way that Singapore "manages" (i) land allocation for our transportation network on one level (roads, rail tracks, cycle paths, walkways) and (ii) time/distance demand by different vehicles on our road network on another level (Certificate of Entitlements, Electronic Road Pricing).

From a macro-economic perspective, an en bloc quota system would also be healthy to minimize asset bubbles and regulate redevelopment land reserves. Lessons that should have been learned from the 2006-07 en bloc frenzy that created the TRIPLE WHAMMY EFFECT: (1) supply contraction with demolition of estates sold en bloc, (2) immediately matching demand spike for replacement units (both purchase/rental) and (3) increased competition for construction resources/labour, thus fuelling price spirals on ALL fronts. Various government agencies were caught on their back foot, scrambling for sand, granite chips, foreign workers and housing for these workers that in turn spun-off into another barrage of complaints about increased sleaze in residential areas and new dumps in countryside areas.

Greater diversity in urban landscape and architectural legacy would result from en bloc quotas because redevelopment land would be made available at different points in time to capitalize on evolving building technologies/efficiencies and new design trends. As it is, the whole stretch of condos along Paterson Road will have the sameness of all-glass facades with disproportionate emphasis on bay windows, planter boxes and balconies brazenly exploited under the building regulations prevailing at that time.

Another suggestion: By calibrating incentives for plot amalgamation to create the spatial vista for better light and improved ventilation and also minimise the wastage of set-back boundaries in-between many small land plots where the apartment blocks jostle neck-by-jowl with each other (eg, with sub-tiered Development Charges for different ranges of land plot sizes).

Just as the legislative review was being prepped for parliamentary debate in Sep 2007, I specifically pointed the Ministry of Law official in late Aug 2007 to South Korea’s urban renewal model of “Hapdong Re-development” that mandates 1-4-1 exchange.
[Interesting trivia: The etymology of “Hapdong” in the Korean Hangul language traces back to its roots of the Chinese word for “Cooperation”.] To me, the South Korean urban renewal model is more neo-communitarian in approach. Isn't time to curb the Excesses, the Unsustainability, the Imbalance? Isn't it time to "manage" en bloc urban renewal?

4. NUGGET: Why en bloc law was (and still is) needed?

The introduction of the concept of “majority consent” to sell other people’s homes was seminal in abrogating private property rights of Minority Dissenters. It was NOT introduced lightly – it went through Select Committee review and parliamentary debates. It took more than a year before it became law. However, in my opinion, the law regrettably carried (and still carries) too light a touch – having interfered with market forces by introducing legislation that effectively wedged a big foot into other people’s main door, you don’t just lightly dip your finger of law in the pie and blithely shrug: “C’est la vie – let’s leave it to market forces”. as said in many more words and different ways during the Sep 2007 parliamentary review of the Land Titles (Strata) Act and in the responses to the May 2007 Public Consultation exercise.

Now, let’s go back in time ... back to a decade ago.

At the Second Reading of the Land Titles (Strata) (Amendment) Bill in 1999, the then Minister of State for Law, Ass Prof Ho Peng Kee, said: “The current position is that a single owner, for whatever reason, can oppose and thwart the [collective] sale. ... As a result, these buildings cannot take advantage of enhanced plot ratios to realise their full development potential, which would have CREATED MANY MORE HOUSING UNITS IN PRIME 999-YEAR LEASEHOLD OR FREEHOLD AREAS FOR SINGAPOREANS. A secondary benefit is that these developments, especially THE OLDER ONES COULD HAVE BEEN REJUVENATED through the en-bloc process.” [Capitalization emphasis is by The Pariah.] NOTE: This 1999 parliamentary promise of “for Singaporeans” has been embarrassingly nullified by ministerial comment in 2007 and housing statistics in 2008, as substantiated in the above blog entry entitled "MOCKTAIL: Have we left our people behind?"!

At the Third Reading of the Bill, the then Minister for Law, Prof S Jayakumar, in discussing the change to include (instead of exclude) small strata title developments (ie, 10 units or less) into the fold of en bloc law reeled off these cogent statistics: “Many of these developments which have 10 or fewer units are old or have large areas which are underutilised, thus rendering them suitable for redevelopment. In fact, as at September 1998, developments with 10 or fewer units account for NEARLY HALF OF ALL STRATA DEVELOPMENTS in Singapore. Of the 2,272 strata developments which are freehold or close to 999 years, 47% are developments with 10 or fewer units. These developments ACCOUNT FOR 7% OF THE TOTAL NUMBER OF UNITS and ABOUT 80 HECTARES (10%) OF THE LAND AREA. Requiring unanimous decision will frustrate en-bloc redevelopment of these developments.” [Capitalization emphasis is by The Pariah.]

Sobering statistics, indeed! If we were to cast the net wider in 1998 to ALL strata title developments (ie, those larger than 10 units and/or those of 99-year leasehold) that have NOT fully utilized the plot ratio, we can understand and accept (even though some will still disagree with) the need for en bloc law in teeny Singapore from a national perspective.

5. POSERS: What is today? What will be likely tomorrow?

What I have cited in the above blog entry entitled “NUGGET: Why en bloc law was (and still is) needed?” was in 1998. With the en bloc frenzy in 2006-7, large swathes have since gone en bloc. Coming to the 10th anniversary, it would be timely to get a statistical update in 2009 of what’s left standing (viz, ALL strata title developments that have NOT fully utilized current plot ratios).

On top of that, in the interest of transparency and accountability, more statistics are needed and more questions need to be asked. With the law’s unyielding purposiveness and the two rounds of market frenzies in 1999 (39 sites of $2.5bn en bloc value) and 2006-07 (188 sites of $21.5bn en bloc value), have we achieved our national agenda of HIGHER LAND-USE INTENSITY now that the STATISTICS ALSO CONFIRMED THAT WE HAVE INDEED WILLY-NILLY LEFT OUR OWN PEOPLE BEHIND??? Example: Based on the 2006-07 en bloc frenzy with lag effects of completion into 2009, from 1 Jan 2006 up to a cut-off date (say, 1 Jul 2009):

(a) What is the number of estates that were (i) issued with Strata Titles Boards’ collective sale orders and/or (ii) registered with Singapore Land Authority for collective sale?

(b) Based on (a), what are the estate numbers by en bloc age-bands after taking away the youngest 10% and the oldest 10% of such estates?

(c) What is the aggregate number of units that (i) have been or (ii) will be demolished after sale?

(d) What is the aggregate strata title area that (i) have been or (ii) will be demolished after sale?

(e) Out of (c)(i) - Regardless of application/construction/completion stage, what is the aggregate number of units that (i) have been or (ii) will likely be made available upon redevelopment? [Also, what are the aggregate number of sites and aggregate number of old units where demolition has been completed but there are no plans to redevelop (ie, vacant land will be held in developer-buyer’s land bank)?]

(f) Out of (d)(i) - Regardless of application/construction/completion stage, what is the aggregate strata title area that (i) have been or (ii) will likely be made available upon redevelopment?

(g) Out of (d)(i) - Regardless of application/construction/completion stage, what is the aggregate net saleable area that (i) have been or (ii) will likely be made available upon redevelopment?

(h) Could land-use intensity be even higher and at the same time improving spatial, light and ventilation factors if more thought and calibration went into “managing” this once-in-a-long-while Singapore Make-over opportunity? How? Perhaps, by incentivising plot amalgamations and thus avoid an explosion of cheek-by-jowl redevelopments with wastage of peripheral set-back boundaries?

(i) Could asset bubbles in property market be minimized if more imagination and creativity were injected into “managing” the triple-whammy impact of en blocs (viz, sudden contraction of housing supply with immediately matching spike in housing demand, exacerbated by keener competition for construction resources with consequent price spiral on all fronts)? How? Maybe, by taking a leaf from “management of road usage through COE (Certificate of Entitlement) quotas and bids” and introducing equivalent en bloc quota/bidding by geographic region and housing type? Minimizing asset bubbles would entail some back-tracking from pro-cyclical government policies to date in the push towards a World Class Global City!

Sorry if I'm giving some government agency a Bad Hair Day!!!

6. DIGESTIVE: Why skew the law?

Despite understanding and agreeing (YES, "agreeing"!!!) with why en bloc law was (and still is) needed, my resentment simmers over the light touch of the finger of law in the pie AFTER the Gahmen interfered with market forces by introducing legislation that effectively wedged a big foot into other people’s main door. And I remain perturbed about the way the present law continues to be skewed AGAINST owners (except en bloc flippers). Otherwise, how else could the Gahmen ensure that built-up prime/popular residential land would be easily available for RE-development through the incidental interplay of market forces? How else could corporate developers be highly successful predators of such choice bites?

Most of us were (and some are still) barking up the wrong tree … cursing our neighbours, condemning the Sale Committee members, shouting at marketing agents, sneering at lawyers, smearing corporate developer-buyers, some even resorting to criminal acts! Sure, these people are not totally blameless. Naturally, behavioural science and econophysics came into play! But the source (and therefore underlying primary cause) of en bloc disputes is the Almighty Law itself! The disputes are merely the symptons and side effects. That was why I sliced-and-diced-and-spliced the en bloc legalese in my last National Day’s blog entry of 6 Aug 2008 entitled “Greek mythodology: The SOURCE and Themis”. http://singaporeenbloc.blogspot.com/2008/08/so-whats-alternative-in-end.html

I don’t know about the Law gazing “on the horse as it does the horseman”, as Justice Choo Han Teck said in his first Horizon Towers en bloc judgement when he threw the case back to Strata Titles Boards for yet another round. But there is something Trojan about this horse because reality stares us in the face (not just gazing!) – the number of en bloc battle wins by desperate yet determined Minority Dissenters could be counted on less than five fingers of one hand! This is despite the phenomenon of everybody suing every one – Minority sues Majority, and vice versa. Developer-buyer sues some Majority or threatens to sue all Majority. Majority sues Developer-buyer. Majority even challenged the Strata Titles Boards!

When Singaporeans who, by-and-large are not particularly litigious as a people, start suing each other – left, right and centre – it is yet one more litmus indicator that something is fundamentally out-of-sync at its core! Since the source can be traced back to the Almighty Law itself, then it follows to a logical point that the law is at the core of this hullabaloo.

Hey, when you are promised Utopia during en bloc and end up in Ethiopia after en bloc – what do you expect??? When you realize that en bloc "windfall” is "shortfall” hype – what then? When it is at “double the price; half the size; quarter the value” post-en bloc, how does it all add-up? This topic was delved into in my last National Day blog entry dated 6 Aug 2008 entitled “IN-BETWEEN: Why en blocs are NOT right for Majority Consenters nor Minority Dissenters?” http://singaporeenbloc.blogspot.com/2008/08/en-bloc-why-it-is-not-right-for.html

7. PURGATIVE: A sense of déjà vue!

When mulling over en bloc issues vis-à-vis the current credit crisis, I get this sense of déjà vu. Failure by regulators. Failure by industry players. Failure by end-customers. Failure of the entire financial market! Sounds familiar, eh? How damning can it get, I ask you?

Let’s draw just one parallel here, using the example of en bloc legal fees.

Where Singapore has rejected ambulance-chasing lawyers who are paid a certain percentage of the judgement award to accident victims, we have conveniently closed one eye to the en bloc industry standard of “no sale, no fee” for lawyers (and marketing agents).

On the one hand, if an ordinary person appoints a law firm to issue a Letter of Demand for some minor dispute, it is standard practice to require an upfront retainer of a few hundred bucks.

On the other hand, if a motley bunch of ordinary persons in a Sale Committee appoint a law firm in an en bloc sale running into hundreds of millions of dollars (if not a billion), not a single cent is paid upfront.

Worse still, after doing all the work throughout the 12+12 = 24-month window period for en bloc sale, if the deal falls through, the lawyer (and the marketing agent) gets nothing!

Having introduced legislation to deliberately let loose market forces from so many angles to facilitate en bloc sales in the name of urban renewal, a lot of us are in connivance by NOT counter-balancing the relentless ferocity of those same market forces.

In reviewing the legislation, the Ministry for Law did not see it fit to provide for a legal retainer fee of even 0.1% of the expected apportionment amount based on the stated Reserve Price to be paid upfront by each Sale Committee member and each signatory of the Collective Sale Agreement. Failure by regulator?

The legal fraternity did not step up to preempt the market’s exploitation of their own kind. Lawyers are consensual in such exploitation. Their self-preservation and survival instincts naturally kick-in and they resort to embedding and burying all kinds of latent cluster bomblets in the Collective Sale Agreement to trip up even Majority Consenters or conveniently omitting key verbal representations made in their presence to induce signature of such Collective Sale Agreement. Lawyers do collective sale tie-ups with marketing agents to offer a package deal and there is precious little transparency and open competition to enable owners to make an informed decision and exercise freedom of choice between different law firms. Even for a modest $15mn loan syndication, agent banks typically get three competitive legal fee quotations. Yet for a $500mn en bloc sale, no competitive quotes are obtained with any seriousness (although there are occasional cases with some semblance of multiple quotes helpfully "sourced" by the marketing agents who themselves float-or-drown together with the lawyers in the same "no sale, no fee" yacht). Failure by industry players?

Property owners bargain for the cheapest possible legal package, get “clever” (so they thought) by making the Developer-buyer pay the marketing agent’s commission, delay or default in paying whatever nominal fees are stated in the Collective Sale Agreement. Whatever these property owners can get away with, they will. “They want it cheap; they want it fresh/beautiful!” – depending on the dialectic Chinese version you choose! Often times, property owners forget the cardinal rule that “if it sounds too good to be true, it probably is”. Failure by end-customers?

The ugly spectre of “serial condo raiders” or “en bloc flippers” is slyly covert in some estates and brazenly overt in other estates! Yet our Ministry of Law has a hands-off approach to this destructive and disruptive element. I do not know enough of the intricacies of the American housing market and how President Barack Obama’s efforts will pan-out in unravelling the present mess by means of the upcoming Housing Mortgage Program.

But I'd like to draw a parallel between our Gahmen’s hands-off attitude towards en bloc flippers and that of President Obama’s guiding principles as encapsulated in his 18 Feb 2009 speech:
"But I also want to be very clear about what this plan will not do: It will not rescue the UNSCRUPULOUS or IRRESPONSIBLE by throwing good taxpayer money after bad loans. It will not help SPECULATORS who took risky bets on a rising market and bought homes not to live in but to sell. It will not help dishonest lenders who acted irresponsibility, distorting the facts and dismissing the fine print at the expense of buyers who didn't know better. And it will not reward folks who bought homes they knew from the beginning they would never be able to afford. In short, this plan will not save every home.” In concluding his above speech, President Obama said: "It will not be easy. But IF WE MOVE FORWARD WITH PURPOSE AND RESOLVE – with a deepened appreciation for how fundamental the American Dream is and HOW FRAGILE IT CAN BE WHEN WE FAIL IN OUR COLLECTIVE RESPONSIBILITIES – then I am confident we will overcome this crisis and once again secure that dream for ourselves and for generations to come.” [Capitalization emphasis is by The Pariah. And don't you just luv Straits Times Graphics' clever caricature of Obama???]

President Barack Obama repeated the SAME THRUST in his first address on 24 Feb 2009 to the joint session of the House of Congress since taking office: “It is time to put in place TOUGH, NEW COMMON-SENSE RULES of the road so that our financial market rewards drive and innovation, and PUNISHES SHORT-CUTS AND ABUSE.” [Capitalization emphasis is by The Pariah.]

Wow! How Obama's Neo-Communitarianism and Progressive Government (NOT Progressive Corporatism) resonates in our soul! It is about “Doing Right”, man!

8. NUTTY PEANUTS: Myths debunked!

Gillman Heights en bloc offers a classic example of purportedly “selling high and buying low”. It also summarily debunked myths of “en bloc windfall” and “monetization of asset at a premium”! If “WINDFALL” and “PREMIUM” are defined along the lines of how “SEX” is defined by former President Bill Clinton in the Monica Lewinsky saga, then I am chokingly gagged!

Carrot or lemon? You figure it out ...

Gillman Heights timeline:

18 Feb 2006 – First signatory of Collective Sale Agreement based on the Reserve Price set [property market was on the upturn].

23 Jun 2006 – Last signatory of Collective Sale Agreement (having crossed the tipping point of 80% majority consent).

5 Feb 2007 – Sold en bloc at $548mn (even slightly ABOVE Reserve Price) to Developer-buyer under Sale and Purchase Agreement [property market was nearing peak – using one Minority Dissenter’s pay-out figures, she would be getting $498 psf from en bloc pay-out].

3 May 2007 – Designated representatives applied to Strata Titles Board for collective sale order [property market at peak – the same Minority Dissenter checked the asking price of a 5-room HDB flat in Mei Ling Street - $746 psf (exceeding en bloc pay-out by $248 psf after DOWNGRADING from privatized condo to public housing)].

21 Dec 2007 – A few days before Christmas, Strata Titles Board ruled against Minority Dissenters [property market started softening].

25 Jun 2008 – High Court ruled against Minority Dissenters [property market slump].

9 Feb 2009 – On Yuan Xiao Jie, Appellate Court ruled against Minority Dissenters [property market depressed – the same Minority Dissenter checked the asking price of a 5-room HDB flat in Bukit Merah - $600 psf (exceeding en bloc pay-out by $102 psf after DOWNGRADING from privatized condo to public housing)]. http://singaporeenbloc.blogspot.com/2009/02/purpose-of-purposive.html

* May/Jun 2009 – Likely legal completion and pay-out of the bulk of en bloc sale proceeds.

Nov/Dec 2009 – Likely vacant possession date and pay-out of the remainder of en bloc sale proceeds.

* If all goes according to plan in Gillman Heights case, it would take about 3¼ years from the point of decision to sell en bloc to the point of collection of $$$ to buy another place by DOWNGRADING or DOWNSIZING! At Gillman Heights’ $498 psf en bloc pay-out, equivalent replacement of private condo in the neighbourhood vicinity is IMPOSSIBLE even after the property market crash! Business Times of 11 Feb 2009 quoted property analysts’ opinions that even in the current market slump for “condos in OUTLYING areas near MRT stations, the price resistance for a new launch in today's market would probably be in the $600-650 psf range on average. Another analyst puts a price resistance in a higher band of $750-$850 psf for condos in MATURE HDB ESTATES such as Toa Payoh and Ang Mo Kio”.

As shown above, even a 5-room HDB public housing flat ($746 in Mei Ling Street at market peak and $600 in Bukit Merah in market doldrums) is priced HIGHER than Gillman Heights’ privatized condo en bloc pay-out of $498 on a normalized psf basis. Whatever hype is made out of “en bloc windfall” and “asset monetization premium”, the effects of morphing into a Squatter, Refugee, Downgrader or Downsizer under the present en bloc framework are painfully real – even with the present-day bursting of the real estate bubble. Should you be dragged into this “Game of Timing the Market” because 80% of your neighbours decided to sell your home for you???

It is a free country (relatively speaking)! If you want to time the property market, kindly do it on your own account with your own home – NOT on a collective basis with other people's homes! And if you can reap a huge windfall by trading on your own account, that’s great. I’d be most happy for you because I am not a “lesser mortal” and won’t begrudge your wealth deservingly blown on a Cordon Bleu cooking class in Paris (particularly since it is NOT some ill-gotten en bloc gain at other people's expense)! Gahmen would also thank you for the stamp duty on each flip that you do – the more, the merrier, man! But it becomes nutty for our laws to facilitate collective flipping! Are we a nation of flippin’ flippers playing this "Game of Timing the Market" without an investment time horizon of 30 years (exemplary example: GIC/Temasek benchmark)???

9. CROWN JEWEL: 80% to en bloc The Istana?

[This is the concluding section of my 9-part series for Feb 2009.]

The refrain of one of the hits of ABBA, a Swedish pop group, goes like this:

“Money, money, money
Must be funny
In the rich man's world.

Money, money, money
Always sunny
In the rich man's world.

Aha-ahaaa-aaa
All the things I could do
If I had a little money
It's a rich man's world.”


If economics is the be-all and end-all in this game,
then why don’t we en bloc The Istana? Does it have to be in busy, crowded Orchard Road where official motorcades would exacerbate the traffic jams now and then (time is money in our frenetic lifestyle)? Do we need all that sprawling grounds? Ever noticed that most of the buildings along our prime shopping belt are under 20 storeys? Probably for aviation clearance path in the event of escape evacuation. Or that the apartment blocks in the bordering residential district of Cavenagh Road are mostly low-rise? Again, for obvious security reasons. Imagine how much economic value would be unlocked in such prime commercial and residential districts if the storey height restrictions were lifted and as Development Charge levies once again swell our government coffers, especially in the aftermath of the 2008 global financial/economic crisis that significantly depleted our reserves.

But, I, for one will say a resounding “no” – The Istana MUST stay where it is. That is one of our last few national icons left whole and intact. There is a sense of time and place in The Istana – despite today’s building technology that would enable The Istana to be identically re-constructed brick-by-brick on cheap land somewhere else! The grounds where Queen Elizabeth may have strolled by. The steps where Chairman Deng Xiao Peng may have climbed. The hall where President Nelson Mandela dined. The spot where our Founding Father Lee Kuan Yew stood on as he took his oath of office. For all of this and more, money cannot buy.

Our national iconography, our country’s history ... forever priceless! But that’s only me and maybe 19% of you out there!

Often times, our Gahmen waves the flag of “Majority”, “80% Consent”, “Collective Will” of condo owners. So, what’s wrong since so many want to en bloc??? They don’t get it? Or we don’t get it?

Yeh, what’s wrong? Let’s grab this raging bull by the horns! This calls to mind the distinction between the two schools of governance (note: this is a deliberately over-simplistic comparison to draw out the point):

(a) “Democracy” – If all 35 people in a mob agree to kill the target victim, the lynching will go ahead.

(b) “Republic” – Even if all 35 people in a mob agree to kill the target victim, the law prohibits lynching. So lynching is stopped. But if it is effected, the lynchers will be punished. NOTE: This assumes that the law is “just” to start with. As reminded by Dr Martin Luther King, Jr: “There are two types of laws: Just and Unjust.”

In the harsh reality of the world, there are Black Swans. There is the non-equilibrium economic theory of Econophysics. There is 80-20 Pareto Distribution. So many factors, correlation ranges from 0-100%, they are dynamic and of varying weight under different sensitivities!!! Small changes can have exponentially exaggerated effect. Human beings are not 100% rational. Herd behaviour. Fear. Greed. Exuberance. Knowledge is not equal. Markets are not perfect. The end results are more random than we think. So “Majority”, “80% Consent”, “Collective Will” and the blah may well belie the needs and desires of owners (excluding speculators and flippers).

If I may dredge up the slouchy Homer Simpson in all his slothful glory: “Never under-estimate the power of stupid people in large groups!” Please excuse my irreverence ...

Purpose of "purposive" - Gillman Heights verdict

On this Yuan Xiao Jie (first full moon of the first lunar month) of this Chinese New Year of the Ox, the Appellate Court ruled against the Minority Dissenters of Gillman Heights with Appellate Court costs borne by the respective litigants and 50% of the High Court costs borne by the Minority Dissenters.

This group of Minority Dissenters stood united in their valiant bid to save their homes as they dug into their pockets which are not deep by general standards to challenge the very law itself, pitting themselves against the big-boy developer-buyers and the all-mighty lawmaking food chain in this David versus Goliath clash. In the end, the Minority Dissenters lost. Another estate bites the dust.

1. Background. Gillman Heights was completed in 1984 - that was when the first occupants moved in. It was a HUDC estate at that time and was governed by rules and regulations akin to that of public housing administered by the Housing & Development Board (HDB). Gillman Heights - together with another HUDC estate known as Pine Grove - were the pioneers in privatizing their estate in 1995/96. In the process of privatization, Gillman Heights owners carried out some essential works to fall within the qualifying criteria and also some upgrading works a few years later. The CSC for Gillman Heights was issued only in 2002. In the en bloc process, Gillman Heights achieved about 87% majority consent, contracted to sell to a developer-buyer at $548mn and applied to the Strata Titles Boards (STB) for a collective sale order in 2007.

2. Points of contention and ruling at Appellate Court level. The Gillman Heights Minority Dissenters challenged:

(a) Whether the 1999 Land Titles (Strata) Act (LTSA) (ie, prior to the specific amendments in 2007 relating to privatised ex-HUDC estates) applied to Gillman Heights which was a HUDC estate before it was privatised; and

(b) If the 1999 LTSA applied, then whether the date of issuance of Temporary Occupation Permit (TOP) or Certificate of Statutory Completion (CSC) would apply to Gillman Heights who obtained their CSC only in 2002 (although physical completion of this estate was in 1984) and therefore would require 90% consent level for an estate of less than the 10-year-old cut-off point (instead of 80% consent level for an estate that is 10 years or more in age).

Three years (!!!) after the Collective Sale Agreement was signed by the first of the Majority Consenters on 18 Feb 2006, the Appellate Court ruled on 9 Feb 2009 that the "purposive" element of LTSA prevailed in terms of the estate's physical age and the availability-for-en-bloc clock started ticking from the date of completion of Gillman Heights in 1984. In fairness, the Appellate Court acknowledged that Minority Dissenters' points about the 1999 LTSA and the 2007 amendments with specific provisions for ex-HUDC developments but the Appellate Court attributed these to "faulty or inappropriate drafting" in the 1999 LTSA. Hence, the parliamentary intention underpinning this piece of legislation could not be frustrated by a literal interpretation of the law.

3. "Purposive" purpose. Laws are in black-and-white. Every word, every comma counts. Or does it?

In this connection, let me share a little New Zealand joke. New Zealand's national symbol is the Kiwi bird. Hence, New Zealanders are also called Kiwis. Through the ages, the Kiwi bird has evolved to its present-day flightless state. This bird eats ground vegetation (eg, underground roots, little plant shoots, fallen leaves) and it also predates on worms, eels, amphibians, crayfishes, etc.

In New Zealand, they say the following:

(a) About the bird -
A Kiwi eats shoots and leaves.

(b) About some New Zealander men -
A Kiwi eats, shoots and leaves.

Add a comma between "eats" and "shoots" and the sentence transforms into a manifestation of the Darwinian Theory of Evolution:

- of self-preservation (eg, by eating),

- of procreation (ie, by seminal shooting), and

- of survival of the fittest (viz, by beating a quick exit and leaving to find another lady bird for more seminal shots to increase their gene pool)!

What is the purpose of eating shoots and leaves? We need not fly to New Zealand to ask this flightless bird as it could be found on the tin cover of a popular shoe polish brand.

What is the purpose of putting a comma between "eats" and "shoots"? We could ask a teacher of English language. Or we could ask Singapore legal practitioners who usually have a mastery over the English language on how they would interpret this comma - whether as a lawyer in explaining these words, or as a draftsman in drafting the sentence or as a judicial member in reading the final sentence. But, of course, there is this thing about being "purposive", eh?

4. Purpose of "purposive". I am probably getting my left foot entangled with my right hand by flipping "purpose" and "purposive" from the previous paragraph sub-heading. But I would like to put into context the purpose of being "purposive".

From parliamentary debates and public comments by ministers and civil servants in enacting LTSA, the purpose of en blocs is for urban renewal and higher land-use intensity in respect of private strata-title developments. Singapore is so teeny. We have stacked upwards, tunnelled downwards, filled-up and topped-up to the north, south, east and west. With the latest population target of 6.5mn people on 700-odd sq km, what more could we do to create space for all of us to work, play, live and shit in inverse order of priority?

In the process of achieving our national agenda of urban renewal and increasing land-use intensity, the land value of these strata-title developments would be unlocked as a natural consequence. Here's a thorny question - UNLOCKED FOR WHOM???

4.1 Unlocking land value for corporate developer-buyers. Was it our Gahmen's intention to unlock land value for the corporate developer-buyers?

So that corporate developers could demolish a 15-storey block to build 36-storeys in prime and/or popular residential districts which would NOT otherwise be so easily available for redevelopment??? So that corporate developers could replace 200,000 sq ft of aggregate "strata-title area" with 600,000 sq ft of "net saleable area" - out of which 100,000 sq ft is for the air-space in your double-storey living/dining room, balconies in every bedroom, bay windows on three sides of your bathroom, and planter boxes in every conceivable nook which spun-off an entire sub-industry of planter-box converter specialists??? [Home-buyers - beware of this thingee called "net saleable area" as this definition morphs over time in true Darwinian spirit by courtesy of our statutory boards/government agencies!] Isn't a doubling of storey height or a tripling of net saleable area more than enough to ensure commercial viability of en bloc redevelopment for corporate developers? Bear in mind that the prime/popular locations of en bloc sites already significantly increase the marketability of the redevelopment - try peddling an en bloc redevelopment in the Katong area versus a new project in Sengkang district built on land bought under the Government Land Sale!

If the answer to Q4.1 (unlocking land value for corporate developer-buyers) is "yes", I'd say that it is a naughty (if not nutty) answer to this knotty question. Why? Because it is the citizens with Identity Cards (not the corporations with Business Registration Certificates) who voted in these Members of Parliament to form a Government - dare I even breathe - "of the people, by the people and for the people". Ooops, sorry, we are Singapore, on the other side of Planet Earth - what am I thinking about?

4.2 Unlocking land value for existing owners (predominantly Singaporeans). Or should there be a purpose of "purposiveness" in devising this en bloc legislation such that our Gahmen should re-calibrate this law to unlock land value for existing subsidiary proprietors? Let's not forget that these were the owners who (i) had the acumen to buy into such prime/popular locations years ago, (ii) used their hard-earned private savings and Central Provident Fund balances for the purchase and paid a huge premium over public housing rates in the process and (iii) prudently applied inflation-hedging as part of their retirement financial planning in the hope of indexing their likely capital gains to inflation over a reasonable time horizon at the point of actualization (ie, upon their retirement or when they really need to monetize their property asset in future to send their children for overseas education, to pay for a major surgery, to embark on a new enterpreneurial venture, etc).

This is just talking the language of our hard-nosed and hard-headed Gahmen about urban renewal and higher land-use intensity which naturally unlocks land value! This does NOT address the realm of community ties, or our sense of time and place, or our nascent rootedness, or our basic right to reside where we choose, or the sanctity of private property rights - and NOT be forced by our neighbours to sell our homes and NOT giving our neighbours to sell what doesn't belong to them in the first place ... even within the context of communal sharing of air-space and common facilities in strata-title developments! Not that any of the aforementioned are any less important to us as human beings!

Has our model of Progressive Corporatism gone too far for far too long? Is it time to go back to the basics of Neo-Communitarianism - of Doing Right, in Serving the People (not just the Corporates), and to Seek Balance and Curb Excesses. Is the answer to Q4.2 (unlocking land value for existing owners) a "yes" possibly? Or have we missed the forest for the trees?
How to unlock land value for existing owners? By following South Korea's urban renewal model with some modifications (viz, by mandating an ADDITIONAL OPTION for 1-4-1 EN BLOC EXCHANGE based on factual SAME size, SAME floor level and SAME orientation considerations within a narrow band of pre-defined alternatives and variances in order to give some wriggle room to developer-buyer and existing owners in the redevelopment). For more elaboration, please refer to my 5 blog entries dated:

- 26 Mar 2007 (One-for-one "exchange"),

- 2 Apr 2007 (Ministry of Law Public Consultation),

- 19 Nov 2007 (After the 2007 law, what's next),

- 24 Dec 2007 (In the coming year of 2008), and

- 7 Aug 2008 (So what's the alternative in the END).

5. Market's ups and downs; Life's twists and turns. Let's bear in mind that the Gillman Heights en bloc sale was crystallized PRIOR to the property prices softening in 3Q 2007 and the market's initial meltdown in 2008.

After the Appellate Court delivered this verdict against the Minority Dissenters, one of them very astutely put her finger on a very pertinent point - She said that she will be getting $498 psf from this en bloc sale. In the mid-2007 frenzy, she recounted that a 5-room HDB flat in Mei Ling Street was going for $746 psf in the resale market. Even in today's market nose-dive, a 5-room HDB flat in Bukit Merah is selling at $600 psf as per her most recent check of the HDB web-site for resale flats.

The conventional wisdom is that there is a so-called "en bloc windfall", thus enabling home owners to monetize their property asset at a premium! Well, it all depends on how one defines "premium", eh? It looks like a rose, it pricks like a stalk of rose but does it smell like a rose? Amazing that even ministers sing this monetization tune! These ministers are so out-of-touch with ground realities that they even sing off-key with such gusto - it's really mind-blowing!

"What en bloc windfall?" she hooted. "I still lose money even after I downgrade from a privatized condo to public housing!" she lamented.

Effectively, this Minority Dissenter will be paid $498 psf from the en bloc sale that was ostensibly transacted at a market peak by the Sale Committee who sold the family home for her. In view of the Appellate Court verdict and assuming that legal completion of the en bloc sale goes through eventually, she would need a replacement roof for her family.

Scenario 1: If this Minority Dissenter had bought a replacement unit when the en bloc sale was crystallized for fear of the market ramping even higher (because en bloc activity usually takes place only when the property market is hot), she'd have paid $746 psf (ie, $248 extra for each sq ft) even AFTER downgrading from a privatized estate at Gillman Heights to public housing in Mei Ling Street.

Scenario 2: But this Minority Dissenter decided to take a market risk and NOT buy a replacement unit in the mid-2007 frenzy for fear that the en bloc sale may get scuttled/aborted (eg, if STB or the Courts ruled in favour of the Minority Dissenters or if the developer-buyer backs out of the transaction in the end by paying a forfeiture penalty). If the en bloc sale was scuttled/aborted, she could potentially end up with the unintended financial burden of owning two properties. But as events transpired for Gillman Heights en bloc, she got "lucky" in a way in taking this risk because the property market had crashed since then. Who would have known during the mid-2007 frenzy whether the property market was going up or down??? But even in today's downward market spiral, she'd still have to fork-out $600 psf (ie, $102 extra for each sq ft) for downgrading to public housing in Bukit Merah.

She continued to rant: "Like this, how to do retirement financial planning? You tell me lah?"

Who can give her an answer? Even with her "good luck" of selling high and buying low, she is still losing money in the immediate term! She will also be downgrading her property asset from a privatised condo in a choice location to a public housing flat in a less prime vicinity. Real estate is the most valuable and most substantive asset in her family's entire portfolio. Hence, over the long term, she and her husband will lose the multiplier benefit of a better-classed real estate asset for actualization in the future when her husband eventually retires!

What can I say? I can only agree with the assessment of this Gillman Heights Minority Dissenter that she is essentially "cooked" by this court verdict. Her sentiments were echoed by her co-litigants. Indeed, they have lost more than the court battle. My heart goes out to the Minority Dissenters ... some put up a brave front and psyched themselves to make the best out of the worst, some felt a sense of vindication that the highest court on our land acknowledged that there was "faulty or inappropriate drafting" of the law even as it ruled against them, some walked away with a dull ache of loss with tears welling up, some struggled to come to terms with the harsh reality - there was a mix of varying degrees of resentment, anxiety, resignation to fate, fear, sadness, disgust, anger. For many of us, en blocs affect our family homes and - by extension - our memories, our hopes, our dreams and our aspirations. So, you bet, it is EMOTIVE. As it should! For we are human beings after all. But, hey, one never knows, eh? Life's twists and turns are such that maybe, maybe, maybe ... "Man Proposes, God Disposes", as they say ... God may not necessarily heed what the three good Judges Proposed!

So what's the alternative in the END?

This 7 Aug 2008 blog entry is the third part, continuing from the earlier two parts, both dated 6 Aug 2008, viz:

- The SOURCE and Themis

- IN-BETWEEN: Why en blocs are not right for Majority Consenters nor Minority Dissenters?

- So what's the alternative in the END?

ANSWER to Q: So what’s the alternative in the END?
[Hint ... look to South Korea! The South Korean model even offers relief to Developer-buyers if problems (eg, liquidity crunch, weakened demand) should surface.]

How we answer the above question will be very telling on us as a society. Do we "care about the beans or the beings"? This was the poser in The Economist (2-8 Aug 2008) regarding the breakdown in the latest round of Doha talks on world trade.

From the Gahmen's perspective: There is a spectrum of possibilities. The pendulum could swing all the way back by repealing the en bloc law and we go back to 100% consent. OR it could swing all the way to the other side by reducing the requisite majority from the present 80% (90%) level to more than 50%. OR it could tinker and tweak ... make a hole here by relaxing the substance of this provision ... and patch there by tightening the form of that clause. You fix one crack and another leak springs elsewhere.

OR those who govern could do a paradigm shift of the mindset to ensure at least equivalent REPLACEMENT for existing qualifying Owners and revamp the en bloc business model. This would arise only IF those in the relevant ministries, government agencies and statutory boards step up to it and make an essential difference in the spirit described in Dr Cherian George's Straits Times commentary (10 Aug 2008): "No other organization has the resources and powers of the state, and individuals who step forward to help the state use that power for SOCIETY'S BENEFIT deserve our support, not our contempt". [Capitalization emphasis is by The Pariah.] Any takers?

As a pithy saying goes: "If you don't stand for anything, you'll fall for anything".

From the Owners' perspective: ONE size cannot fit ALL.

Sub-group 1 of owners: They want cash. Within this sub-group, some just want a quick flip, others demand a huge premium, yet others just want more than everybody else, some face the frightful prospect of just covering their original purchase price and outstandings under bank mortgages and/or Central Provident Fund charges, some are holding multiple investment properties, a fair number merely want to ride on the collective sale premium and are prepared to downgrade/downsize because of their changed accommodation needs/financial circumstances (some are truly desperate for immediate cashflow due to inadequate retirement planning, speculative investments gone awry or failed business ventures - whilst I empathise with their desperation, does it justify their attempts to drag others down with them as they sink in their abject failures???).

Sub-group 2 of owners: They want replacement units. Within this sub-group, some need a roof over their heads, some need a replacement asset either for short-term resale or long-term retention as part of their portfolio. The existing location matters either because of (i) the asset premium attached to such prime/popular location or (ii) the familial and social ties (short travelling distance to school/work or childcare/daycare centres, childhood fondness for the area as part of their families' inter-generational link, parents or siblings living nearby, long-time neighbours who provide a support network to each other in their twilight years and who therefore intend to re-congregate, etc).

Sub-group 3 of owners: They want to keep their present apartments for a variety of reasons and personal preferences. For this sub-group, their salvation is repeal of the en bloc law OR steadfast Minority Dissent at the legislated cut-off point. The former (ie, law repeal) is highly unlikely in my opinion but others may hold different views. The latter (ie, steadfast core dissent) is too fraught with unknowns and uncertainties. The stakes are high, with no room for compromise and the determinant factor of "core dissent" is totally beyond one's control. At an emotive (heart) level, I do identify with this sub-group (Home Sweet Home, as we fully understand). But at a cognitive (head) level, I reckon a middle path needs to be trodden. Whilst nobody can make everybody happy all of the time, we can try to make MORE people happy for MOST of the time!

And try we must. So how do we achieve (1) urban renewal/higher land use efficiency as envisaged by Gahmen and (2) yet ensure commercial viability for developers and (3) still preserve sense of time/place and community for en bloc owners? A Win-Win-Win!

As mentioned in para C-4.3 of my mega 4-part Nov 2007 blog entry ("After the 2007 law, what's next???") -
Proposed Solution: Two options –
(a) Cash or
(b) 1-4-1 Exchange (sell one; get one back)
= Doing right (owner’s choice: cash-out now/in future OR keep rebuilt home)
South Korea’s en bloc laws

mandate 1-4-1 exchange

and it works!
MinLaw knows about the South Korean model. Can our Singapore Government follow South Korea’s lead? South Korea's model is different due to their legacy and scale issues. Singapore is much more compact, with little legacy issues. We could piggy-back on the best elements in the South Korean model and customize them for Singapore's context, eh?

Horror stories of exchange seemingly haunt MinLaw. Have they been misled into believing that exchange is fraught with difficul­ties, delays, added costs and lower sales pro­ceeds? As explained in my 6 Aug 2008 blog entry ("IN-BETWEEN: Why en blocs are not right for Majority Consenters nor Minority Dissenters") - With the evidential trend of “Developers getting 1-4-2 or 1-4-4” versus “Owners getting 1-4-½ divided by 2”, can exchange negotiations be left to the market? Is the playing field level when Disparity (disparate Owners with 101 reasons for/against en bloc sale) faces Singularity (Developer-buyer’s single-minded profit focus)? Isn't the stage set for exchange to be exploited by Developer-buyers on discounted basis (instead of 1-4-1)?

In the current legislative VACUUM, corporate greed breeds INERTIA towards exchange based on SAME size (eg, 1350 sq ft), SAME level (eg, 12th floor) and SAME orientation (eg, front door facing North-North East). Paterson Lodge overcame practicalities in 1-4-1 exchange. Getting a dark and dank basement unit in some nook or cranny in en bloc exchange is SCARE-MONGERING of the highest order!

In a casual conversation a few months ago, I asked the CEO of one of the Big-Boy Developers if he thought 1-4-1 exchange in en blocs would be commercially viable. His answer: Yes. This guy was unequivocal - no if's, no but's! And he belongs to the genre of CEOs who are "on the ball"! When I probed further as to whether his public-listed company would take the lead in setting an exemplary standard of corporate social responsibility in offering 1-4-1 exchange in en blocs, he was very clear that such leadership initiatives must come "from the top" as he pointed towards Heaven with a suitably beatific smile. "From the top" doesn't mean God, I reckon. He means the Gahmen! Quite naturally ... in the commercial world where profit accountability to shareholders is primary, the 100% differential between "1-4-2" versus "1-4-4" is too high a price for corporate conscience (1-4-2 and 1-4-4 are not Toto combination numbers - please read my 6 Aug 2008 blog entry "IN-BETWEEN: Why en blocs are not right for Majority Consenters nor Minority Dissenters"). Now who can blame a guy with a pleasant and beaming moon face?
Why is MinLaw so fearful about 1-4-1 exchange? Let's examine why MinLaw fervently believes 1-4-1 exchange will present a host of "practical difficulties" and "delay the process ... which could, ultimately, translate into lower sales proceeds".

When buying an apartment at a soft launch (just as in deciding whether or not to opt for 1-4-1 exchange in an en bloc sale) - other than price and location, what are the other main decision factors?
(A) unit size
(B) unit level
(C) unit orientation
(D) design lay-out
(E) quality of finishes.
Of course, there are other risks in 1-4-1 exchange and these will be addressed below.

Let's dissect it

line-by-line.

IF, IF, IF 1-4-1 exchange is mandated by law as ONE of the TWO options for en bloc settlement for qualifying Owners (barring en bloc flippers) buttressed by calibrated guidelines for Factors (A)-(E) and regulations for the other known risks ...

At the outset, Factors (A)-(C) (ie, unit size, level, orientation) are ascertainable factually from the title document and surveyor's report. Flexibility options to upsize/downsize or upgrade/downgrade within limited range could even be offered based on formulaic specifications and verifiable construction costs. Examples: (i) The owners of an existing 3000 sq ft apartment may prefer two units of 1500 sq ft in the redevelopment now that their children have grown-up and flown the coop. (ii) Another owner of 2000 sq ft unit may want to buy an extra 250 sq ft based on construction cost plus xx% premium. (iii) Yet another owner may not have enough savings to bridge the technical "sale and re-purchase" involving CPF paybacks or outstanding bank loans, in which case, the owner could trade-in 180 sq ft from the existing unit. (iv) An owner presently on the lowest floor may wish to upgrade to mid-level in the new condo by paying the floor differential premium at soft launch.

Unless the Developer-buyer is a newbie in the construction industry, these developer companies are very conversant with the latest urban planning guidelines and building requirements. Therefore, Factors (D)-(E) (ie, layout and quality of finishes) could be drawn up and warranties are committed by the Developer-buyer in a legal document. Owners could evaluate all these PRIOR to signing the Collective Sale Agreement (CSA). No doubt, urban planning guidelines and building requirements may change prior to submission of the plans for Grant of Written Permission. But if there is political sincerity in tri-partite contributions towards urban renewal, the authorities could grant exemptions based on evidence of achievement of requisite en bloc consent prior to public announcement of such planning or building changes. If there should be deviations in quality of finishes (eg, due to change of supplier source, or discontinuation of product line, etc), these are certifiable by quantity surveyors and compensations are similarly warranted in a legal document.

Depending on the deal structure (and this is where natural market forces will throw up various hybrids of risk and ownership options), title risks are capped via legal transfers/caveats. There are financial and completion risks as the Developer-buyer may go belly-up or incur delays in getting the Temporary Occupation Permit (TOP). But a bank guarantee/performance bond would mitigate delay/non-completion risks with a sufficiently high penalty built-in to deter such delay/non-completion.

Finally, 1-4-1 exchange entails temporary displacement for Owner-Occupiers or Investor-Owners who opt for a replacement unit. Relative to the scale of things, it is financially feasible for the Developer-buyer to compensate for such displacement from vacant possession to TOP issuance as reimbursement of (i) Owner-Occupiers' rental expense or (ii) Investor-Owners' rental income. In comparison, the Developer-buyer would incur substantive interest cost to pay-off the Owners who opt for upfront cash which in turn would earn interest or offer other investment opportunities for such Owners.

So nobody is gaining at the expense of anybody - the risks and opportunities are DIFFERENT for those who opt for Cash versus those who opt for 1-4-1 Exchange! Each bear their own risks and avail of their own opportunities!

Different sizes for different people, eh? 1-4-1 exchange may not be ideal ... but it is the lesser of two evils to be assured of equivalent REPLACEMENT at a minimum, instead of utter DISPLACEMENT!

Depending on risk appetite and investment horizon, Owners who opted for replacement unit could still liquidate and sell their unit in the open market (subject to minimum time constraints imposed by Developer-buyer) during/after redevelopment. Otherwise, Owner-Occupiers who chose this option could move back into the redevelopment upon completion and preserve the sense of community with some of the previous owners amidst the new owners and keep a sense of time and place in the SAME neighbourhood.

Under this proposal, Owners are well-placed to make an informed choice PRIOR to signing the CSA – Cash or Exchange. By adding just one more settlement option, the displacement impact from an en bloc would be significantly tempered for Owners. It may lessen the acrimony amongst neighbours! Even if the en bloc were to fail, it leaves a sour after-taste and an uneasy truce hangs over the entire estate for years to come, and estate fires are lit whenever maintenance/upgrading issues surface (metaphorically speaking, although it may become literal one fine day if die-die-must-sell owners decide to take matters into their own hands and scorch dissenters' front doors to coerce en bloc consent under duress)! 1-4-1 exchange may preempt hooliganism and criminal acts during the Battle of Wits and War of Wills.

It is noteworthy that MinLaw uttered NOT a squeak in the face of increased hooliganism at EOGMs and vandalism of private property AFTER the amended laws came into effect! MinLaw's legislative tweaks were intended to make the en bloc process more transparent. Did they? Or did they unwittingly make the Yes/No divide more apparent, thus facilitating easy target ID for strongarm tactics? Merely reinforcing "Tyranny by the Majority", eh? By no means am I advocating veils, curtains or transparent walls that fog-up at the flip of a switch (which is what you get in the fancy condos these days)! Increased transparency within a FLAWED LEGISLATIVE STRUCTURE coupled with an INCONGRUENT BUSINESS MODEL ain't gonna cut it! Offering exchange may reduce the incidence of expensive and time-consuming legal suits and appeals to government agencies for assistance. With everything flying helter-skelter all over town and tearing the very fabric of our society. it has become socially unacceptable and economically unproductive!!! Sure, 1-4-1 exchange may spawn unforeseen evils - but the chances are probably lower, especially if the Gahmen adopts other counter-balancing measures.

In fact, offering 1-4-1 exchange as an ADDITIONAL OPTION may shorten the en bloc process because it would be palatable to more owners. The en bloc Start Point (ie, setting Reserve Price which - by my reckoning - sparks the preliminary decision trigger, NOT the first CSA signature) to the End Point (ie, application to Strata Titles Boards for collective sale order) should be achievable within 12 months. The present legislation created an en bloc business model that is too out-of-whack as Owners may have to wait for 30 months or more to lay hands on the collective sale proceeds to buy a replacement unit (as explained in my 6 Aug 2008 blog entry "IN-BETWEEN: Why en blocs are not right for Majority Consenters nor Minority Dissenters").

Also, it would significantly reduce the market/financing risks for the Developer-buyer because (i) the 1-4-1 exchanges would constitute committed pre-sales of their new inventory and (ii) the interest cost would be significantly reduced. Both of these are very helpful in this age of shortened business cycles with increased volatility which beset not just property assets but most other asset classes too.

Volatility could be somewhat tempered if the Gahmen also imposes en bloc quotas by (a) geographic region and (b) quality type. Since our road use traffic is managed via car quota of COEs (Certificates of Entitlement) by quantity and engine capacity, surely management of en bloc pace in land-scarce Singapore is not that wacky an idea!!! To preempt urban planning mistakes of other countries (eg, Hongkong's over-congestion), plot amalgamations could be incentivised.

As the 1-4-1 exchange option may well hasten the rate of en bloc redevelopment in the current Re-making of Singapore (by MM Lee Kuan Yew's reckoning, it would "take us another one or two decades as we move into a new era" - Straits Times, 31 Oct 2007), it is only prudent to (i) introduce en bloc quotas and (ii) incentivise plot amalgamations CONJUNCTIVELY with a mandated 1-4-1 exchange to ensure a well-rounded solution. This would preempt the torrid recurrence of the 2006-07 en bloc frenzy that eroded Singapore's national competitiveness (not to mention the sense of loss and possibly regret by those who were capitulated with fateful resignation/fatigue or were misled by half-truths in signing the CSA or were forced to sell under the collective sale order)!!! Construction costs, property prices and rentals went spiralling at rocket speed as the TRIPLE-WHAMMY EFFECTS kicked in: (1) immediate DEMAND for housing, (2) inevitable laggard SUPPLY during redevelopment period and (3) exacerbated COMPETITION for construction materials/labour. From the economic perspective, the pro-cyclical effects only increase the risks of asset bubbles, market volatility and bubble bursting - not very prudent economic planning, eh?
Like a bagel with hole in the centre, Business Times (27 Mar 2008) confirmed that Singaporeans have been pushed out from the Core Central Region (CCR) as the local segmental share of private non-landed property market dropped from 54% to 47% from 2000 to 2007 whilst foreigners’ share doubled. Pan-island, our share dropped from 77% to 63% (lowest share since 1995). Certainly, it could not be due to (a) falling birth rate as demographics of private property ownership is likely above age 35 or (b) lack of upgrading aspirations from our dominant HDB heartlands. Was the Bagel Effect accentuated because Singaporeans were shortchanged from en bloc windfall? I lay no claims to prescience or clairvoyance! More than a year ago, in May 2007 blog entry ("In between ... evolving a Bagel Class of Singaporeans"), I blogged about this projected drop of Singaporean ownership of apartments in prime districts. Really, I derive no pleasure in saying "I told you so". To the contrary, I feel sad at such dire predicaments faced by fellow citizens who continue to call Singapore "home". En blocs must push everybody up,

NOT pull everybody down (or push up only selective parties, eg, flippers, marketing agents, lawyers, developers, government).

That is the surreal disjunction between en bloc sales and en bloc windfalls!

FY2007 budget planning was all happy nonsense – the projected $0.64bn deficit became an actual $6.4bn surplus (Straits Times, 16 Feb 2008). Stamp duties/property-related revenues were $3.4bn in excess – 53% of budget surplus came from realty! Realty reality, ugh???

Will Gahmen “do right” to ensure equivalent Replacement (not disconcerting Displacement) even as we sacrifice our homes for Singapore’s Re-making? ...... When? There are human lives behind every en bloc sale. Let's make en blocs humanistic!
Since urban renewal and increasing land use efficiency are part of our NATIONAL AGENDA with ramifications on the economic competitiveness and attraction of Singapore, it is High Time that TRI-PARTITE CONTRIBUTIONS be made by Gahmen, Corporate Developers and Owners (instead of just Owners as is the present situation)!

IN-BETWEEN: Why en blocs are NOT right for Majority Consenters nor Minority Dissenters?

Having focussed on the SOURCE (ie, the en bloc legislation) in the 6 Aug 2008 posting below, let's now turn the spotlight on the IN-BETWEEN. Minority sues Majority, and vice-versa. Developer-buyer sues some Majority or threatens to sue all Majority. Majority sues Developer-buyer. Sue Strata Titles Boards (STB)? Sue Singapore Land Authority? Who’s next? Sue Sale Committee? Sue marketing agent, lawyer?

Why? When Singapore is not even litigious as a society? In fact, we are reputed to be a law-abiding people! By and large, we are even a sticky bunch when it comes to contracts - nothing more, nothing less, by-the-book type. So why???

Answer:

En bloc “windfall” is

300% “shortfall”!

In a recent Straits Times Forum discussion thread, someone succinctly encapsulated it as:
They promise you Utopia during en bloc but you end up in Ethiopia after en bloc!
Yeeha, this says it all, man!

Hindsight is a precise science.

In Straits Times (16 Jun 2007) poll of 40 owners, half expected to downgrade after their estates’ en bloc in locations ranging Sophia Court, Nathanville, The Orange Grove to Minton Rise, Waterfront View because they “have to pay around twice the sum they got from their en bloc sale” for a similar size apartment.

D9: Hilton Towers redeveloped into The Lumos. Business Times (5 Jul 2007) said Developer could “recoup its entire initial investment in its exclusive The Lumos condo by selling just two pent­houses and a few mid-sized units”. En bloc owner got $1088psf but he’d pay $3000psf for comparable-size unit on 2nd floor – 176% difference in the 7 months between receipt of en bloc proceeds and earliest booking in redevelopment. By paying off owners of 72,800 sq ft aggre­gate strata area, land-value was unlocked to create 125,735 sq ft – 73% inventory windfall for Developer on top of 176% price hike!

D16: Waterfront View carved into three plots; one-third already yields 60% of en bloc strata area in new Waterfront Waves. New Paper (4 Feb 2008) recounted plight of Waterfront View en bloc owners who wanted to move back to redevelopment. One is hoping for market downturn to buy 2-bedder at half the size of his old 1,600 sq ft unit for almost $700k (en bloc price $660k). Another bit the bullet with 4-bedder of 1,600 sq ft at $1.27mn (double $630k en bloc sum).

A distinct pattern evolves in the en bloc aftermath as the mantra repeats itself ad nauseum, whether downtown or in the suburbia: From developer-buyer’s perspective:
1-4-2 (buy one; get one free);
1-4-4 effectively (if both sold at double price - as is likely because en blocs bubble only when market heats up)
From en bloc owner’s perspective:
1-4-½ divided by 2 (twice the price; half the size; quarter the value - en bloc land is shared with double the number of owners after redevelopment)
Bear in mind that construction cost is 20-25% of total cost of new development (Straits Times, 24 Mar 2008). However, Q4 construction costs have risen another 20-25% in 2007 compared with 2006 for mid-market condos targetted at HDB upgraders (Business Times, 24 Jul 2008) which in turn translates into 55% or more profit margin shrinkage for this band of developers whereas the profit margin impact is much less at 25% or so for prime market developers (Business Times, 7 Aug 2008). This ill-timed spike is not only due to the global rise in raw material costs and fall-out from regional spats on resource exports but also partly due to government policies being behind the curve. When the corporates are adversely affected, the Gahmen would respond with alacrity - that's great! It was impressive that the Gahmen reacted 3 times within 8 months (Nov 2007, Feb 2008 and Jul 2008) by deferring public sector projects aggregating S$4.7bn to 2010 to ease Developers' construction woes. In sharp contrast, it took the Gahmen nearly a decade before they responded to citizens' en bloc woes by reviewing the Land Titles (Strata) Act (the legislative hole in respect of en bloc vote for mixed residential-cum-commercial estates was extant from Day 1 and it was this hole that kick-started the amendment review) - that's dismal. How I wish the Gahmen would respond with half that alacrity to citizens' woes? Sigh ... but never mind, each of us will have a chance to tell the Gahmen what we really think at the next General Election!

Anyway, back to the point ... with Developers reaping as much as "1-4-4" whilst Owners get raped with "1-4-½ divided by 2", the obscenity is multiplied by the en bloc exponential increase in 2006/07:

Year - Sites - Value (bn)
2007 - 109 - $13.3
2006 - 79 - $ 8.2
1999 - 39 - $ 2.5 (majority consent is legislated)
1996 - 36 - $ 1.7 (total consent)

The sense of being aggrieved persists beyond one generation because property ownership is emotive and punches twice below the belt, being part of:

(a) retirement planning (real estate is a store of value/inflationary hedge);
(b) estate planning now deprived from being bequeathed.

Despite being aggrieved, most would concede that Government is “being right” in asserting the greater interest of Urban Renewal.

Is “Being Right” = “Doing Right”? Let’s dissect the “Dào Lǐ“ ( 道 理 ) ("rationale") as applied to the sense and sensibilities of en blocs. "Dào Lǐ“ is more than “rationale”! Its etymology traces back to "Dào" (denoting "the Way" under Daoism) and "Lǐ" (denoting "Logic”).

Urban Renewal (National Cause) through En Bloc/SERS
= Being right

Result of En Bloc: (Personal Sacrifice) as Squatter, Refugee, Downgrader, Downsizer
= NOT doing right

Although this distinction of "being right" versus "doing or NOT doing right" was made in my mega 4-part Nov 2007 blog posting ("After the 2007 law, what's next???"), this point merits re-emphasis. After heeding government exhortations to be prudent and not over-commit in real estate investment, an Owner-Occupier with one residential property would face a daunting prospect. In the en bloc aftermath of “twice the price; half the size; quarter the value”, you simply can’t afford a new replacement unit in same vicinity.

As a reputable property marketing agency was recently quoted in the press as saying:
Property is all about LOCATION and TIMING.

Location is turf issue because it embeds your sense of time/place and defines your community. Location also determines investment value at a first cut.

Timing inherently means that the en bloc process must be a quickie one-nite stand (decide go/no-go and if you go, then you need to get in and out quickly so as to collect the money and buy a replacement unit - whether as a roof over your head or as an asset replacement). It is madness to drag things out over a 24-42 month courtship for divorce (up to 24 months is mandated by law) which only guarantees Displacement, NOT Replacement, in a moving market!

Hence, the present en bloc business model is so, so, so out-of-whack! The current long gestation period serves the interests of everybody BUT the Owners!

Let's draw a correlation between Sovereign Wealth Funds buying into MNCs and Developers buying into en bloc land.

- It only takes about a week for Temasek Holdings and the Government of Singapore Investment Corporation to decide and plonk billions of dollars for stakes in Barclays, Citicorp, Merrill Lynch, UBS. Why? Because as potential buyers, they did their homework in advance and they kept their finger on the pulse all the time. [Whether that purchase is well-timed or not, it is another matter because the first decision hurdle is whether to buy or not to buy.]

- So it is beyond comprehension why our legislation provides for a SECOND period of up to 12 months for the Sale Committee essentially to find an en bloc Developer-buyer and finalise the deal!!! The law already provides for a FIRST period of up to 12 months for the Sale Committee to collect the requisite 80% (90%) signatures for the Collective Sale Agreement (CSA) and apply to STB for a collective sale order. Surely, as market players, potential Developer-buyers would have gotten wind of the CSA signature collection during the first time-period of up to 12 months? All pertinent facts about the present estate and the redevelopment potential are available in public records and/or ascertainable for Developer-buyers to do their homework in advance.

Maybe the en bloc window of "12+12 = 24 months" was NOT the intention of Parliament when this piece of legislation was first enacted in 1999? Maybe Order 2004 is NOT in order (elaboration is set out in my 6 Aug 2008 blog posting entitled The SOURCE and Themis)? Maybe, maybe, maybe ... as in Hans Christian Andersen's fable, we need a child to say "but he hasn't got anything on" just as the Emperor regally struts by amidst our en bloc blitz and glitz!

With legal suits flying all over town ..., with seemingly law-abiding citizens resorting to hooliganism, vandalism and criminal acts ..., “being right” is turning out all gloriously wrong!

Greek mythology: The SOURCE and Themis

Whether en bloc is a phenomenon or a disease, we need to identify the cause. Without a proper understanding of the cause, neither curative nor palliative measures would be effective. Thus far, the focus has been on consequences of en bloc. Let’s shift focus to the SOURCE of en bloc.

En bloc is created by law. Hence, the source is the law. Can the law be finetuned to minimize the degeneration and divisiveness of our society in en bloc battles? Or better yet, cement our sense of community in forging our nascent nationhood by building upon our sense of time and space? Can it be more balanced to temper the brutal after-effects? Does the law foster our collective aspirations to upgrade? Or are collective sales hastening our downward regression, particularly for privatised ex-HUDC owners who will likely revert to public housing?

The icon for Law and Justice is Themis from the Greek pantheon. You will find her at the main roof gable in the front of the Old Supreme Court Building, blindfolded, holding a sword in one hand and an equally balanced scale in the other. These are very powerful symbols. Why blindfolded? Why a sword? Why a scale? Why is the scale balanced? They speak of a sobering message. They personify a rigorous standard to be upheld.

Does this piece of legislation called the "Land Titles (Strata) Act" (LTSA) answer Themis' call? Or do we care?

LTSA was tightened in Oct 2007 after nearly a decade since Oct 1999 introduction of 80% majority consent (90% if estate is > 10 years old). For so long as Government continues regulatory forbearance in the substantive essence of this law, the disquiet will continue.
STRUCTURAL ISSUES/CURRENT PRACTICES pre-load dice against owners:

1. Price of milk. The price of milk cannot hold for 12 months. How long is Reserve Price (RP) valid for? LTSA has window of up to 12 months, starting from 1st signature of Collec­tive Sale Agreement (CSA) until application to Strata Titles Boards (STB) for collective sale order. A RP carrot, say $1bn, is dangled to induce signature. Once 80% sign, Order 2004 seemingly opens a second window of up to 12 months to find Developer-buyer and apply to STB.
12+12 = A whopping 24 months? Geez, get real, man!

Private sale at own decision takes 3 months to collect money. Collective sale with 80% agreement under full 12+12 windows could take 30 months or more to get $$$ after minimum provision for STB process/sale completion! Doesn’t time-lag increase the risk of price mismatch, making replacement an improbability? Slow-braise or fast-boil, even a 12-month window in moving-market context is untenable. 12+12 is bizarre! Is the law disproportionate and/or misinter­preted?

Sure, Sale Committee could continually up RP. Depending on its skills/desperation quotient, it may choose not to, having secured 80% consent. Is a RP increase of 10% tricky if market is already 20% higher?

2. All that froth. What is even more breathtaking is marketing agents’ rah-rah over en bloc premium. A $1bn RP carrot translates into, say, 80% premium com­pared to private sale – so they enthuse! Seduced by such “windfall” representation made in the presence of lawyers (!!!), you sign. Lo and behold, no lawyer has ever reflected this representation with a marked-to-market CSA clause! Does this pivotal omission by ethical legal professionals whip up froth only to milk owners dry?

As a society, we chose NOT to allow a structure of ambulance-chasing lawyers where lawyers are paid based on a percentage of the judgement award. Yet when this law tampers with natural market forces by (i) obliging Minority Dissenters to sell their homes against their will and (ii) allowing Majority Consenters to sell what doesn't belong to them, then why doesn't the law counter-balance the unrelenting market exploitation of "no sale, no fee" for en bloc lawyers? When a layperson appoints a lawyer to issue a Letter of Demand for a small dispute, it is common practice to require an upfront retainer fee. Yet when a bunch of laypersons appoint a lawyer under the auspices of a Sale Committee for a deal running into hundreds of millions (or billions) of dollars, not a single cent is paid by the people who are so keen to sell other people's property as each of them subsequently signs the Collective Sale Agreement to beyond the tipping point! Sheesh!!!

3. Cost of a cuppa. Before fixing the selling price of a cuppa, you need to know how much it costs to make it, right? In en bloc, how do you establish the equivalent of “how much it costs to make a cuppa”? Many components: (a) residual land value, (b) comparative values from recent private/en bloc neighbour­hood sales, (c) development baseline/ceiling, (d) storey-height limit, (e) develop­ment charges/differential premium, (f) outline planning permit, (g) infrastructural/policy announcements. Establishing these facts incurs 5-figure fees. Who pays if no 80% signature or no developer is interested?

How to overcome dilemma? Pre-Oct 2007, LTSA was STB-centric because it calls for valuation not more than 3 months before STB application. Post-Oct 2007, it is Sale Committee-centric as valuation is required upon close of public tender. When will the law become Owner-centric?

How to set RP without valuation/key facts that could significantly affect land value? When selling other people’s homes (up to 20% against their will), is it kosher to hold-up a finger in the air to set RP without (i) marking-to-market the frothy premium in legal contract and (ii) legislating a reaffirmation mecha­nism by 80% on final terms/RP fixed up to 24 months ago before awarding to Developer-buyer?

4. Dividing pie. How to divide RP in estates with varying unit sizes/share values? Based on strata area only? Share values? 50:50 or 90:10 area/share-value weightage? LTSA is silent despite double-whammy effect because penthouse/big units are usually outvoted even before voting begins!

Deafening silence continues with no sign of industry guidelines despite Sep 2007’s parliamentary comment.

Hence, the field remains clear for marketing agent to carve the pie along the line of least resistance. As the Michael Douglas character in "Wall Street" movie pronounced so definitively: "Greed is Good", the marketing agent appeals to Greed to find the Line of Least Resistance which invariably overlaps with the Line of Most Exploitation where the most number of owners would gain at the expense of the smaller number, never mind whether it is justifiable or equitable. Who cares???

Thus, it is no surprise that 50:50 weightage is commonly bandied around by marketing agent as the "industry standard recommended by the Singapore Institute of Surveyors and Valuers (SISV) and endorsed by Strata Titles Boards (STB) from past cases" (really???). This is how the marketing agent baits an apportionment method that will tempt 80% to bite without independent valuer’s apportionment advice.

To compound matters, LTSA requires valuation report only UPON tender-close (ie, AFTER RP was set, AFTER lawyer drafted CSA document, AFTER 80% (90%) owners signed CSA in the presence of lawyer, AFTER marketing agent advertised tender in a blitz). Is it reasonable to expect the lone valuer to clean-up milk (i) spilled by marketing agent and (ii) lapped-up by 80% Majority, bearing in mind the small business community in the en bloc arena? Singaporeans have fist-fights over Hello Kitty toy! What more when the diffe­rence between various apportionment methods runs into 6-figures?

If the en bloc unravels, both marketing agent and lawyer will walk away with zero fees but saddled with costs running into hundreds of thousands of dollars or more. Knowing this full well, will a lone valuer unravel the en bloc deal cooked-up and freeze-dried by the marketing agent and lawyer by changing or denouncing the apportionment method UPON close of tender? Who’s kidding whom? Anyway, the valuer has an escape valve because valuation is more an art than a science!

5. One collective pie or many individual cakes? What’s the difference when Developer buys an estate because:
(A) the law allows 80% to force 20% to sell (single collective sale) versus
(B) each owner signing separate contract (multiple private sales)?

“Collective sale” must mean identical basis of sale - yes or no? Surprise! CSA allows Majority to re-divide pie such that Owner X gets, say, 7% more to overcome LTSA’s hurdle of “financial loss”. Selective pay-outs under CSA from Developer’s contingency fund (no doubt, these will not disappear but will instead be re-calibrated to avoid latent cluster bombs after the recent Tampines Court failed en bloc). Extra payment under private treaty with gag order on recipient. All these efforts are above-board! Only imagination limits the marketing agent and concert parties, eh?

Many ways to skin a cat when marketing agent is desperate for last few signatures to cross 80% trigger. In the dark alley of en bloc shadows where faeces may be smeared on your front door if it is not already super-glued to the door frame ... and paint stripping chemicals may be sloshed on your family car, how to prove extra money was promised to tip over the cliff? How to prove private sale of #01 was for Owner to (i) get $150k above en bloc price and (ii) collect proceeds in 3 months? All under-table.

Have your cake and eat it too!!! Force 20% to sell by paying MORE to (i) SOME of the Majority Consenters OR (ii) SOME of the Minority Dissenters? Under LTSA, there are 3 main goal posts that would kill an en bloc sale: (a) Financial Loss (based on a convoluted formula far removed from economic/investment principles), (b) Shortfall that would prevent redemption of mortgage/charge and (c) Lack of Good Faith (within the narrow confines of the statutory definition to the exclusion of common law). Yet these goal posts could be removed or relocated by EXTRA payment to SOME owners!

The concept of "First Amongst Equals" applies to en bloc owners too - apparently! Should Majority Consenters get their apportionment of en bloc sales proceeds under the Collective Sale Agreement whilst (i) Minority Dissenters who suffer the convoluted definition of "Financial Loss" get EXTRA CRUMBS from the Developer-buyer to overcome that statutory hurdle and (ii) all remaining Minority Dissenters who are neither "Financial Loss"/"Shortfall" cases also negotiate individually for some ADDITIONAL PEANUTS from the Developer-buyer to cover, say, the en bloc expenses. Perhaps, these other Minority Dissenters may well have a basis because the extra payment to the "Financial Loss" Minority Dissenters would no longer bind these other Minority Dissenters to the apportionment formula in the Collective Sale Agreement???

These may be crumbs and peanuts. Some crumbs are bigger than whole cookies. Not all nuts are of the same size. Whether these crumbs and peanuts are given above-board or under-the-table, there is yet another legislative skewing under the new law! Sigh ... what else is new, eh? Even where the STB exercises its discretion to increase the en bloc pay-out for an objecting Minority Dissenter by the higher of S$2000 or 0.25% of sales proceeds (contributed by all owners), the Sale Committee could reject STB's collective sale order! If the Sale Committee is empowered by law to scuttle STB's order because one owner got extra payment of $2000 from each unit, then does it change the equation if that one owner got the same aggregate amount (or even higher amount) from the Developer-buyer instead?

Now, this monkey is scratching its head – would LTSA's limited definition of "Lack of Good Faith" be upheld if ONLY one unit in the condo was owned by the CEO of Developer-buyer? Wanna place your bet??? I'd say probably not if that unit owner-CEO didn't sit on the Sale Committee or the decision to proceed with en bloc purchase was made by the Developer-buyer's Business Development Division, etc. Sigh ... why have any goal posts in LTSA once the requisite majority consent level is hit? Why be coy, eh? At least, the law should provide clarity that we are being sold down the river! We could then drown blissfully with our Wide Eyes Shut!

Whitewash black without the slightest tinge of grey – undermine statu­tory prohibition? STB-ordered en bloc is a “statutory” sale (very POWERFUL because this law abrogates the private property rights of up to 20% Minority Dissenters) – no longer a “contractual” sale!!! Doesn't this distinction count? Can “contract” circumvent statute” without blinking? A single collective sale OR a disguised collection of individual sales? Befuddling indeed to my little limited brain!
6. One-to-Many Orgy. Agent-principal structure works best in one-to-one relation­ship, even within a multitude of exclusive agencies, where agent/expert knows principal well.

In en bloc, it is the opposite. Agent-principal structure is one-to-many relationship. Sale Committee comprises part-time volunteers who may not be experts in realty, finance, law, economics. Sale Committee cannot know 200 owners’ driving motiva­tion. Compounding it, Committee-Owner commu­nication channel is limited to 4-5 EOGMs by law. Can’t LTSA designate Sale Commit­tee as mere coordinators without all-powerful “agency” rights in CSA to bind Majority-principals?

This bunch of part-time volunteers is committing to a multi-million or billion dollar en bloc deal ON YOUR BEHALF when they don't know you from Adam and you don't know them from Eve! This reality alone should hoist Red Flags all over your estate. Doesn't it? Under the amended LTSA, there may be varying interpretations of the word "consider" that could potentially open a new can of worms if the en bloc sale is eventually via private treaty after the public tender attempt(s). Since we are onto Greek mythology with Themis and all, I hope our lawmakers have not unwittingly lined-up Pandora around the corner. Well, hope is all that I can do because Hope was the only thing left inside the box when Pandora closed it in the nick of time.

7. Yes-Yes; No-Yes. When you sign CSA, you get one-time 5-day “cooling-off period” to change your mind. It helps but precious little with above pre-loading.

After CSA signing: With 12+12 windows and contentions, it may drag past 36 months before you collect money. If you can’t wait, you must sell your apartment to pro-en bloc buyer - it's no longer free market forces at play because you now have one arm tied behind your back in trying to sell your unit. If offered different prices, you can’t sell to the higher-price bidder who will decline en bloc. Your unit is locked as “yes-vote” until CSA expiry/termination even when you/your new buyer sells. If you decline CSA, scam opportu­nities abound to twist your “no-vote” into “guaranteed-yes” by selling to flipper/nominee consenter. Is the arm of law longer on “yes” side?
Just as in Greek mythology where Themis is blindfolded as she holds an equally balanced scale, the arm of the law must not be longer on the side of en bloc consent versus en bloc dissent. Themis is blindfolded, facing straight ahead - she is not blind; nor is she turning a blind eye or turning her head more towards one direction! That much I note of Themis. As a starting point, are our laws just for justice to prevail? Otherwise, would it mean that justice would be dispensed under unjust laws?

Then what would we end up with?
Just injustice OR unjust justice???
Am I a moron? Perhaps. Or do we have systemic oxymorons?
Shouldn't and doesn't our society aspire towards
Just Justice?

Unless there are legislative provisions similar to that in Hongkong that preempts speculative/serial en bloc flipping (eg, ownership tenure of less than 5 years is deemed en bloc dissent), there should be legislative prohibition against deeming en bloc consent from the predecessor owners’ consent prior to application to STB for collective sale order. Such legislative "deeming" is unseemly lol! Real estate is long-term commitment. Despite that, MinLaw rejected parliamentary suggestion that an owner of less than two-year ownership tenure cannot be Sale Committee nominee. Hence, LTSA doesn’t preempt Sale Committee from being dominated by flippers who target estates as a loose terrorist-cell consortium to drive EOGMs in a bid to buy/sell quickly (ie, not necessarily at highest price). Adding salt to wound, LTSA skews resale market towards en bloc by contractual distortion of market forces. Willy-nilly - whatever the Gahmen exhorts on a good day - a confluence of these factors only serve to commoditize "homes" beyond financial trading and right smack into the realm of property speculation and asset bubbles! Way to go, eh?

8. After the implosion. When things go awry, you need evidence to sue. Dissenters typically suffer info black-out except mandatory EOGMs/notices. Consenters too may be misinformed. Can “qualified privi­lege” be claimed for legal advice relied upon in en bloc? LTSA is silent on whether lawyer represents Consenters, Sale Committee or all Owners. But LTSA is loud and crystal-clear in forcing Dissenters to contribute towards legal fees once STB issues order! If “qualified privilege” can be claimed – whether under substantive law or contract – doesn’t this add stinging salt to festering wound when Dissenters are obliged to pay for the very same legal advice that they are denied access to in their quest for justice?

After tightening procedures in First, Second and Third Schedules, LTSA empowers STB to disregard breaches if they don’t compromise anybody’s interests. LTSA amendments also eliminated publication of owner names, making it more difficult to prove misdemeanors now.

Why is burden of proof of “misconduct” on Dissenters? Why not shift onus of proof of “proper conduct” to beyond three Sale Committee members to include their advisors and the counter-party Developer in joint Statutory Declarations? Where such declarations and testimonies given in witness box/affidavits under oath are false, doesn’t it serve public interest to investigate possible perjury? As en bloc expropriates private property, it must not only be white but also seen to be white!
After all this Starbucks (megabucks) talk about milk, froth, pies and cakes ...
With worry lines on his face, the barista serves up a cuppa to the barrister! Kopi-O in all its ominously dark glory! Till we meet in court - so bids the barrister to the barista as he gulps down the cuppa before rushing off for the next en bloc legal battle in his 2nd Porshe!

The above is distilled from some of the points made in my mega 4-part Nov 2007 blog entry ("After the 2007 law, what's next???") under Part D - Tips on what to do and what NOT to do in a new en bloc sale. "Problems" - there always will be. What's more constructive would be "Solutions" - part of my proposals are re-summarized in my 7 Aug 2008 blog entry entitled "So, what's the alternative in the END?"
http://singaporeenbloc.blogspot.com/2008/08/so-whats-alternative-in-end.html

En bloc topics

The en bloc topics are categorized according to "subject matter" which you can find on the right-hand column of this blog. Scroll down ... past the cartoon of a "wailing house" and you will see them.

In the Straits Times Inactive Forum Page of 8 Jan 2008, reference was made to this blog in the discussion of "apportionment" or "distribution" of collective sales proceeds.
http://www.straitstimes.com/ST%2BForum/Online%2BStory/STIStory_193746.html

To get more details about this and other related topics, click on the following subject heading in the right-hand column:
"Sales proceeds formula; Distribution" and
"Share values; Sales Committee".

The tide is up ... happy surfing!