Complete Property Market Updates of Singapore

February 28, 2008

Penalise those who break en-bloc contracts

Filed under: Collective Sale, Developer News, Legal Ground — Propertymarketupdates @ 4:02 pm

I REFER to the report, ‘CapitaLand tells Gillman Heights owners to honour sale’ (ST, Feb 2). The news, like that of Horizon Towers and Regent Garden, bears similar learning lessons. They concern sellers in a collective property sale who refuse to accede to the terms of the contract they signed with the buyers. The lessons we can draw from these three examples are:

Collective sellers can disregard the terms of a signed contract by simply challenging the rules and rescinding it;

If enough sellers withdraw from a signed contract, the law may not be swift enough to give the buyers due protection as a result of the broken promise made by the sellers; and

Lawyers are the only clear winners in the arena of failed agreements between willing sellers and buyers.

A contract, in the simplest definition, is a promise enforceable by law. In the recent cases, it is crystal clear the sellers went back on their word because the agreed sale price was ‘too low’. I feel the courts should have just enforced penalties here, rather than let the subsequent chain of events run.

So the buyers had to threaten these sellers with lawsuits. The latter responded with a host of ‘reasons’ why the sale agreement should be cancelled. Yet the courts are obliged to hear out both plaintiffs and defendants. Lawyers are hired to represent their respective clients.

All these legal disputes are counter productive, especially for the aggrieved buyers who have the commercial right to proceed with their legal suits against the sellers. Time, money and tears are shed over something that could have been easily resolved by the courts.

An agreement, commercial or social, remains an agreement. If the irresponsible party defaults on the terms of the contract so the aggrieved party takes the issue to court, the court should immediately arrive at a verdict. Penalties should be meted out swiftly against the wrongdoer.

Our society needs to be confident in carrying out the terms of commercial and social contracts. Our children and the next generation are watching us closely in the way we make just decisions. Foreign businesses and enterprises are watching us to see how we deal with simple issues such as breaking a basic contractual agreement.

In this regard, I suggest the Ministry of Education introduce a basic civics education module for students on ‘Keeping one’s word’. Schools should emphasise time-honoured values such as ‘Integrity at all costs’ to children.

Source : Straits Times - 5 Feb 2008

February 27, 2008

CapitaLand tells Gillman Heights owners to honour sale

Filed under: Collective Sale, Developer News, Legal Ground, Regulators — Propertymarketupdates @ 11:38 pm

Resident circulates letter to stop deal; developer warns of breach of contract.

ANOTHER collective sale dispute is brewing between the majority sellers of a condominium and its buyer.

This time, it is the owners of Gillman Heights in Alexandra Road that are locking horns with property developer CapitaLand, which agreed to buy the sprawling 607-unit estate in February last year.

The condo’s minority owners are already filing an appeal against the $548 million deal, which got the green light in December from the Strata Titles Board (STB), the body that governs collective sales.

But even some Gillman Heights majority owners, who originally agreed to sell, are not all happy about the sale.

At least one home owner has circulated letters to his neighbours, calling for a concerted application to the High Court to invalidate the collective sale agreement.

The letters, distributed at the beginning of last month to residents’ mail boxes, prompted a quick response from CapitaLand after they were brought to its attention.

It sent out at least two lawyers’ letters addressed to all Gillman Heights majority owners, warning them ‘not to do anything…that may hinder or prevent’ the sale.

These strongly worded letters, sent through law firm Rajah & Tann, identified the dissenting majority owner as Mr Jerry Lum.

Rajah & Tann also sent a six-page letter addressed specifically to Mr Lum, urging him to ‘take notice’ - in full capital letters - that CapitaLand ‘may have no option’ but to take legal action against him unless he stopped circulating the letters and organising any similar activities.

The letters stressed the sale agreement is ‘binding’ on all who have signed it and any attempt to block the sale could be viewed as a breach of contract.

A copy of the letters was obtained by The Straits Times this week. When contacted, Mr Lum confirmed he had distributed letters and had received the lawyers’ letters, but declined to comment further.

Among other things, Mr Lum argued in his original letters that the sale should require consent from 90 per cent of owners, rather than the usual 80 per cent. This is due to a dispute over Gillman Heights’ completion date.

He was also unhappy with the sale price, which he said ‘many neighbours’ feel is ’so, so cheap’. Each owner can expect to receive about $890,000 to $950,000 from the collective sale.

Although Mr Lum was the only one who signed off on his letters, the liberal use of the pronoun ‘we’ in the letters suggests he may have been writing on behalf of other like-minded, but unidentified, owners.

However, the Gillman Heights sales committee has claimed no knowledge of any activities aimed at obstructing the collective sale. It responded to CapitaLand’s letters with a letter of its own, sent through its lawyers Lee & Lee. In its letter, it said it ‘has every intention to and will carry out’ its obligations under the sale agreement.

Meanwhile, a group of 22 minority owners at Gillman Heights are appealing to the High Court to overturn STB’s approval of the sale. They filed it on Jan 16 and are awaiting the hearing. They are appealing on the grounds that the sale price is too low, and that more owners’ consent is required.

The Gillman Heights brouhaha is the latest in a series of unusual conflicts between an estate’s majority owners and its buyer. Historically, the quarrels have involved minority owners instead, who are unwilling to sell their homes.

But recent cases such as Horizon Towers in Leonie Hill and Regent Garden in West Coast Road have thrown up examples of majority owners who signed on the dotted line but later wanted to back out.

The Horizon Towers owners ended up being sued by the buyer - the suit is now on hold. The Regent Garden owners managed to get the sale dismissed earlier this week.

Letters making their rounds

THE letter-writing saga at Gillman Heights was kicked off by home owner Jerry Lum, who distributed two letters to his neighbours dated Jan 1 and Jan 3.

Mr Lum called into question the estate’s sale price and the level of consent required for its collective sale. He also flagged rising home replacement costs, saying a High Court application would hold up the sale and let residents delay finding another place to stay.

CapitaLand responded with three letters - dated between Jan 4 and Jan 9 - reminding the majority owners of their contractual obligations and warning of breach of contract.

In reply, the estate’s sales committee wrote on Jan 10 that it was unaware of and did not support activities obstructing the sale. If anyone was involved in such activities, he would have to take ‘personal responsibility’.

Source : Straits Times - 2 Feb 2008

Saga of Mitre Hotel site ends after 12 years

Filed under: Hotel, Land Sale, Legal Ground — Propertymarketupdates @ 11:33 pm

AFTER dragging on for 12 years, the legal battle over a rundown hotel sitting on millions of dollars worth of prime downtown real estate has ended.

Singapore’s highest court yesterday ordered the land on which the Mitre Hotel sits to be sold and its occupants cleared out.

Some experts estimate that the plot could fetch $200 million, although the actual valuation has been ordered by a judge to be kept confidential.

The decision ends a long-running battle between the land owners, the bulk of whom want to sell the property .

The only owners resisting the sale are Mr Chiam Heng Hsien and Mitre Hotel Proprietors, the partnership that runs the hotel. Each has a 10 per cent stake in the land.

For more than 50 years, the hotel proprietors paid rent of about $660 a month to the land owners.

Mr Chiam, 62, went to the Court of Appeal to overturn an earlier lower court decision that ordered the site of the dilapidated, two-storey hotel to be sold.

But the three-judge panel rejected his appeal yesterday.

The hotel, which opened in 1948, stopped letting rooms when it lost its licence in 2002. But it continued to operate its bar.

The colonial-era building sits on a prime 40,000 sq ft lot in Killiney Road, against the backdrop of high-rise condominiums and office buildings.

When The Straits Times visited the site yesterday, the hotel looked abandoned. A distinct smell of urine wafted over the covered driveway leading to the lobby entrance.

The legal tussle over the land began in 1996, when Mr Chiam fought off a move by his cousin Heng Luan to sell the property.

Mr Chiam, who is the managing partner of the hotel, continued staying at the building.

The case went back to court in 2006. Mr Chiam argued that an agreement in 1948 allowed the hotel proprietors to stay on the property for as long as they wished.

In April last year, the High Court ruled against him.

Justice Judith Prakash ordered the property sold via public tender and the occupants to clear out.

She decided that the hotel partners are not entitled to compensation for being evicted, beyond the proceeds from the sale.

Mr Chiam and the hotel proprietors were ordered to pay the legal costs of the other parties.

The Court of Appeal yesterday upheld most of those decisions. But it ordered the costs of the legal battle to be paid out from the proceeds of the sale.

Source : Straits Times - 2 Feb 2008

January 9, 2008

Use independent body? Lawyers back idea but raise concerns

Filed under: Legal Ground — Propertymarketupdates @ 2:10 am

LAWYERS gave the thumbs up to the news that the Chief Justice is considering a scheme to bar lawyers from receiving money from their clients.

But they also say that such a scheme, which would possibly entail the money being parked with an independent body, may lead to an increase in time and costs incurred for those buying and selling property.

This raises the question: Will clients be willing to pay administrative fees and experience bureaucratic delays in order to protect their money from the one or two bad apples in the barrel?

Sole proprietor Vijay Kumar said he was in favour of the money being held by an independent body. ‘There have been all these changes - tightening the rules, having more signatories - but the problem has never gone away.’

Mr Rajan Menon, senior partner at law firm KhattarWong, is also all for protecting clients’ money. ‘We must develop a system where the client is fully protected, so that no errant lawyer will have the chance to help himself to the money,’ he said.

Lawyers point out that a similar stakeholding scheme is already in place.

Buyers of buildings under construction have to park 5 per cent of the purchase price with the Singapore Academy of Law.

The money is released to the developer only after the 12-month defects liability period.

Mr Mark Chua, conveyancing partner at Tito Isaac &; Co, said it may make legal sense for the academy to hold the money. But from an economic standpoint, this may not be perfect.

He said that legal clients have to realise that efficiency may be compromised. There will be many procedures to undertake and more forms will have to be filled.

While lawyers can act to release the money almost immediately, an independent body may need some lead time.

Mr Chua pointed out that if the cheques came in late - something which would then result in late completion - there would be a question of who would have to bear the penalty.

It remains to be seen how such a system will work out.

He said: ‘In theory, it’s a good thing.’

Mr Menon believed that the money should be kept in banks and administered by the Law Society, a kind of conveyancing transaction settlement system.

He acknowledged that this may increase costs, which would be needed to fund the running of such a system. Nevertheless, he said it would also be possible that the interest earned could offset the costs.

‘Who’s going to pay? Because of the misdemeanours of one or two lawyers, are we going to change the system of more than 100 years?

‘There are no easy answers,’ he said.

Whatever the scheme, it will have to be studied very carefully, said Mr Vijay, in order to ensure that it does not create a new set of problems.

Mr Chua said: ‘At the end of the day, you can put in as many systems as you want. If a person is determined to take the money, he will find a way of doing it.’

Source : Sunday Times - 6 Jan 2008

CJ considers stricter rules for lawyers

Filed under: Legal Ground — Propertymarketupdates @ 2:09 am

TIGHTER rules have already been put in place, but it seems there are still ways for a lawyer to make off with clients’ money.

Now, the Chief Justice is wondering if lawyers should be barred from holding clients’ money altogether.

He has appointed Judge of Appeal V. K. Rajah to head a committee to study whether such a system is feasible and desirable.

CJ Chan Sek Keong made the announcement at the opening of the legal year yesterday, attended by judges, lawyers, legal officers and other members of the legal community.

Six new Senior Counsel were appointed at the ceremony, and new Law Society president Michael Hwang made his debut speech.

As is customary, the CJ gave a report card of the work of the courts in the past year and announced new initiatives, such as a website for lawyers to keep up to date with legal developments.

Without naming names, CJ Chan referred to the case of rogue lawyer Zulkifli Amin, who went missing in November. He apparently skipped town for the Philippines after siphoning some $6 million of his clients’ money.

Last year, the Law Society tightened the Solicitors’ Accounts Rules, which govern how lawyers handle clients’ money, as a better check against embezzlement.

This change followed from at least eight cases where lawyers ran off with millions. One of them, David Rasif, swiped $12 million and is now missing.

‘But the latest incident shows that these measures cannot prevent desperate or crooked lawyers from helping themselves to clients’ monies,’ the CJ said.

Mr Zulkifli is the first errant lawyer since the new rules came into force to protect clients’ money. Among the rules: two signatures are needed to withdraw sums higher than $30,000.

Investigations are ongoing, but according to sources, Mr Zulkifli may have forged the second signature or perpetuated some fraud.

Yesterday, CJ Chan said: ‘We need to face reality and come up with a workable scheme to protect clients’ monies.’

While the obvious solution was to prohibit lawyers from receiving clients’ money, this would ‘change radically a conveyancing system which has been in place for more than a hundred years’, he acknowledged.

It may also affect the efficiency of the property market, a concern lawyers interviewed also raised.

Justice Rajah’s working party, which will comprise representatives of all stakeholders in the property market, will study the ramifications of such a change, he said.

It has been given three to five months to study the problem and make its recommendations.

Lawyers interviewed yesterday were in favour of such a system, saying it will probably involve an independent body holding or administering the money.

Speaking to reporters, Senior Counsel Hwang said he did not think the Chief Justice is thinking about a total ban because there have not been any problems with lawyers who hold clients’ money in non-property transactions.

‘You can’t abolish this thing overnight. If we abolish the holding of clients’ money, we will probably be the only country in the common law world to do so,’ he said.

‘Whatever system you have, you can’t stop outright, deliberate, malicious embezzlement. All you can do is try and make it more difficult.’

Source : Sunday Times - 6 Jan 2008

How can landlord reclaim house when tenant fails to pay rent?

Filed under: Community Voices, Expat Community, Legal Ground, Rental News — Propertymarketupdates @ 2:09 am

Q MY FRIEND’S three-room terrace house in Singapore was rented out to a divorcee and her daughter. The tenant put down a total deposit of $1,200, consisting of one month’s rental of $1,000 and $200 for utility bills.

The tenant last paid rent in April last year. She owes four months’ rent, or $4,000. Before that, she had been late in making payments for several months. Unpaid bills for utilities add up to about $100.

The landlord has chased the tenant for rental payment since June. At first, the tenant gave many excuses and promises, but they all turned out to be false.

Since late July, the tenant has stopped answering the landlord’s calls to her mobile phone and has also not returned any SMSes. She and her daughter were hardly ever at home.

In late July, the landlord locked the front and back gates of the house with extra padlocks but did not enter the house. The tenant’s possessions are still in the house. The tenant did not attempt to enter the house or contact the landlord.

The landlord made a police report that the tenant owed money and could not be contacted. The landlord’s primary goal is to reclaim the house and rent it to someone else. The money owed is secondary.

A notice containing details of the amount owed and of the police report that had been made was posted on the front door of the house. The same notice was circulated to neighbours.

The tenant’s furnishings were bought from a furniture company on instalment.

My questions are:

a) Does the landlord have the right to lock up the front and back gates of the house without entering the house?

b) What are the landlord’s liabilities if he enters the house and then sells the tenant’s possessions to reclaim part of the money owed?

c) What are the landlord’s liabilities if he enters the house, takes photos of the interior of the house with all the tenant’s possessions, for documentation purposes, and then moves the possessions into a storage room?

After that, can the landlord rent out the house to another tenant but keep the storage room for his own use in order to store the previous tenant’s possessions?

d) If the tenant makes a police report that the landlord entered the house and took her possessions, can the police arrest the landlord?

e) Can the furniture company make a claim against the landlord for selling the furnishings that are still being paid for by instalment?

f) What is the best method to evict the tenant in my friend’s case?

A WHEN a tenant fails to pay rent, the landlord may of course sue the tenant for the arrears of rent, just as he could with any other debt due and owing.

The action must be brought within six years of the date that the arrears became due.

However, the landlord has two other specific remedies, namely, distress under the Distress Act and forfeiture of the lease.

Distress is an ancient remedy that is quite similar to seizure and sale - that is, the tenant’s goods are seized and sold, and the rent owing must not exceed 12 months of the tenancy.

Such an action may be brought if the tenant is still in occupation or has his goods or belongings on the property. The procedure starts with the filing of a writ of distress that is addressed to the sheriff. The sheriff will seize the goods, and make an inventory and a valuation. He will also give the tenant a notice of the seizure, informing him of the rent owed and that the goods seized will be sold at a stated place and time.

Such a notice may be pasted in a conspicuous place on the premises. The tenant has five days to pay up from the date of notice or to apply to court for an order to stop the sale.

On the tenant’s application, the court may order that the goods be released unconditionally, direct that an issue be tried and so suspend the writ, or hold that the goods may be sold.

Of course, if no application is made, the goods will be sold and the proceeds applied first to pay the sheriff’s costs and then to satisfy the outstanding rent. The balance, if any, would be returned to the tenant.

Certain items cannot be distrained, such as things in actual use in the hands of the tenant, tools and implements, and his necessary clothes and bedding for himself and his family.

Only movable items may be seized, so fixtures are excluded. It is also common for most hire-purchase companies to expressly provide in the hire-purchase agreement that the hiring shall automatically terminate if the hirer’s landlord takes any steps to levy distress. Therefore, such goods cannot be seized and, if seized, would be released by the court.

Where the tenant has abandoned the premises and there is insufficient property for distress, then if (a) the rent is not less than 75 per cent of the annual value of the property and (b) the rent has been in arrears for at least two months, the landlord may apply to court to enter and take possession of the premises.

The sheriff will paste a notice informing the tenant that possession will be given to the landlord unless the tenant applies within 10 days, or the court orders otherwise, on the application of the tenant or some other interested party.

If the distress action is brought after bankruptcy proceedings have started against the tenant, then only three months of arrears of rent are recoverable against him. The landlord may also file a proof of debt with the Official Assignee against the bankrupt tenant, just as he could with any other unsecured creditor.

The landlord may also apply for forfeiture of the lease, which would effectively bring the lease to an end. This is usually an action for possession, and a well-drafted agreement will usually contain a clause for re-entry in the event of the tenant’s failure to pay rent.

However, the tenant may apply to court before judgment for relief from forfeiture by paying into court all the arrears of rent and costs, in which case the tenant would be able to continue with the lease and not have to enter into a new lease.

Even after judgment for possession, the tenant is still entitled to relief if he pays up the judgment sum with costs within four weeks of the judgment. The law is not explicit about whether relief is still available to the tenant where the landlord has entered into possession peaceably and changed the locks. While the court might still be able to grant relief, it would, however, take into account the lapse of time as it would not be fair to the landlord if the tenant were to appear out of the blue and pay the arrears to reclaim the lease. The tenant’s significantly long absence could well be read as an implied surrender of the lease.

In your friend’s case, it appears that he has entered into possession peaceably and that has effectively brought the lease to an end.

However, your friend should be mindful of the tenant’s right to apply for relief. The tenant’s right to relief is extinguished only if your friend issued and served proceedings for possession, obtained judgment and then entered the premises on the strength of that judgment.

As for the tenant’s goods, it is prudent and best to apply for a court order as the tenant might make all sorts of allegations that his property had not been properly valued or had been sold at an undervalued price.

The police usually treat disputes between landlord and tenant as a commercial matter.

Amolat Singh

Lawyer

Amolat & Partners

Advice provided in this column is not meant as a substitute for comprehensive professional advice.

Source : Sunday Times - 6 Jan 2008

Horizon Towers: Minority owners want High Court to overturn STB decision

Filed under: Collective Sale, Legal Ground, Regulators — Propertymarketupdates @ 1:50 am

This again throws successful completion of en bloc sale in doubt

The Horizon Towers saga is far from over. In fact, it’s starting anew. Disgruntled minority owners have banded together to appeal against a decision by the Strata Titles Board (STB) last month to approve the en bloc sale of the development.

All nine of the minority owners who originally opposed the collective sale have appealed to the High Court to overturn STB’s decision - doing so yesterday, on the last possible day.

What this means is, the successful completion of the collective sale of Horizon Towers is again in doubt, pending the outcome of the appeal.

The High Court is scheduled to hear the minorities’ objections on Feb 1.

STB’s approval of the en bloc sale was delivered on Dec 7, just days before a Dec 11 deadline for which the sale had to be finalised. The entire sale process is expected to be completed in March.

Lawyers for the minority owners have told BT they will consider applying for a stay of conveyancing proceedings - that is, delaying the completion of the sale - if the outcome of their appeal is not known by then.

The grounds of the appeal filed by the minority owners yesterday are similar to their original objections, heard by STB last year.

The minority owners are appealing against STB’s decision on the grounds that the board erred in law by approving the sale and ordering minority owners to be bound by a sale and purchase agreement signed by the majority owners.

The minorities contend that the en bloc sale was conducted in bad faith and prejudiced their interests. They say the then-sales committee had failed to do its duty to ensure the best price was obtained - by failing to ensure the property was properly marketed and failing to ensure the best offer was procured.

The Horizon Towers sales committee agreed to sell the Leonie Hill development to a consortium led by Hotel Properties Ltd (HPL) for $500 million in February last year. The minorities argue that this price is too low, saying property prices had already begun to climb significantly at the time the deal was inked and there had been other offers, above $500 million, for the development.

They said this was a breach of duty, a result of conflicts of interest on the part of some of the sales committee members, lawyers and sales agents who handled the deal.

The minorities also argue that STB prevented them from fully presenting their case when it refused to subpoena former sales committee chairman, Arjun Samtani. The minorities say Mr Samtani acted in bad faith and influenced the sales committee’s decisions. They say he was motivated by self-interest because he bought an additional unit in Horizon Towers during the initial stages of the collective sale talks.

Six of the nine minority owners objecting to the en bloc sale are represented by Senior Counsel Michael Hwang and SK Phang. The remaining three are represented by Harry Elias Partnership (HEP).

HEP is appealing on grounds similar to those put by Mr Hwang and Dr Phang - but it is also arguing that there was no fair hearing by the STB, in that the board rushed the hearing and failed to give adequate reasons for its decision on Dec 7.

STB only said then that it had been guided by recent case law and parliamentary debates on rules governing collective sales, and that the minorities had failed to prove their claim that the transaction was carried out in bad faith. The board will release the detailed grounds of its decision later.

HEP partner Philip Fong told BT: ‘It’s an unfortunate situation the minorities have found themselves in - in which one is deprived of one’s rights to one’s home, having been told to give up one’s home without being told exactly what the reasons are for such a decision.’

The Horizon Towers case has dragged on for almost a year - and is the most closely watched collective sale transaction ever in Singapore, given its dramatic twists and turns.

The majority owners - some of whom were said to have aligned themselves with the minorities when property prices started climbing - have been accused of trying to renege on their agreement with HPL and its partners, and face a potential $1 billion lawsuit from the buyers.

Source : Business Times - 5 Jan 2008

Horizon Towers minority owners appeal against Strata board ruling

Filed under: Collective Sale, Legal Ground, Regulators — Propertymarketupdates @ 1:44 am

Estates like Finland Gardens, Regent Court are caught in similar legal battles

JUST as the long-running saga over the Horizon Towers collective sale looked about to end, another chapter is unfolding - and other similar disputes are looming.

The minority owners opposing the $500 million collective sale have appealed to the High Court against a ruling last month by the Strata Titles Board (STB), which had permitted the deal to go ahead.

Now, it has emerged that Horizon Towers is not the only condominium caught in a legal battle over a collective sale.

Owners at other estates such as Finland Gardens are also embroiled in similar tangles. The majority owners of the 48-unit estate in Siglap have filed an appeal on the instructions of buyer Sing Holdings - after the STB threw out the $49.5 million sale application in late November.

Another case, that of Phoenix Court, may go to the Court of Appeal, said an industry source who declined to be named. The STB tribunal that heard the Horizon Towers case said it had been guided by the Phoenix Court case. An objecting couple appealed against an STB decision to approve the Phoenix Court sale. The High Court upheld the STB order on Nov 9.

Over in Serangoon Road, Regent Court owners are preparing to file an appeal in the High Court against an STB decision to grant the $34 million sale, sources said.

Also, owners at Airview Towers in St Thomas Walk have filed an appeal in the High Court against an STB decision to reject its collective sale on a technicality.

The sale of Horizon Towers at Leonie Hill was finally approved by the STB - which had earlier thrown out the sale - on Dec 7 after a lengthy hearing, much sweat and tears, and nearly a year after the deal was inked.

The transaction hit a snag after some owners felt the $500 million price, which works out to $810 to $820 per sq ft (psf) on average, was not enough in a fast-rising market. Neighbouring The Grangeford was sold en bloc last June for just over $1,800 psf.

The dispute descended into acrimony and the STB then threw the sale out on a technicality before an earlier High Court appeal which resulted in a fresh STB hearing.

Horizon Towers became the first collective sale where majority owners were slapped with a lawsuit for alleged breach of contract. The suit was lodged by the buyers: Hotel Properties, Morgan Stanley Real Estate and Qatar Investment Authority.

Over the past two days, three sets of minority owners or objectors filed appeals with the High Court. The owners had a month after the STB ruling to appeal, and yesterday was the final day. They now await a hearing date - expected within three months.

One minority owner said even if the High Court appeal failed, he would take the case to the Court of Appeal. If this happens, the deal could be delayed by another three months. ‘My chances of winning may not be high but I will exhaust all legal means to protect my home,’ said the owner, Mr K.K. Then, 53.

The retiree said he and his wife have been drawn unwillingly into the sale process. He said he never had the intention to sell his home as it is something money cannot buy.

The objectors are believed to be aggrieved by the STB decision as they feel the hearing was not fair.

At the STB hearing late last year, a key point of contention was that the sale committee sold the estate at the reserve price even though it knew the market had already moved up.

The reserve price of The Grangeford was revised higher before the Horizon Towers deal was inked. But the sale committee stuck with the $500 million price, which was a reserve price set in 2006.

Saying a collective ‘no’

BLOCKING THE SALE

Over the past two days, three sets of Horizon Towers minority owners filed appeals with the High Court. They now await a hearing date.

The objectors are believed to be aggrieved by the STB decision as they feel the hearing was not fair.

A key point of contention: The sale committee sold the estate at the reserve price even though it knew the market had already climbed.

The reserve price of neighbouring The Grangeford was revised higher before the Horizon Towers deal was inked. But the sale committee stuck with the $500 million price, which was a reserve price set in 2006.

PROTECTING HIS HOME

One minority owner, retiree K.K. Then, 53, says that even if the High Court appeal failed, he would take the case to the Court of Appeal.

If this happens, the deal could be delayed by another three months.

‘My chances of winning may not be high but I will exhaust all legal means to protect my home.’

He says he never intended to sell his home as it is something money cannot buy. ‘My wife and I feel we are victims of the collective sale system.’

Source : Straits Times - 5 Jan 2008

He flew to Philippines and billed his firm

Filed under: Legal Ground — Propertymarketupdates @ 12:20 am

Lawyer may have also used part of missing $6m to pay costs of delayed property deals

RUNAWAY lawyer Zulkifli Amin bolted to the Philippines on an air ticket he did not pay for. It was billed to his law firm.

As more details surface from efforts to trace more than $6 million that went missing when he vanished in November, it has also emerged that he may have used some of the money to settle costs incurred from delayed property deals.

Mr Zulkifli, 33, a lawyer for about seven years, was one of three partners in law firm Sadique Marican and ZM Amin. His partners alerted the authorities when he disappeared and a police probe is ongoing.

He headed the firm’s conveyancing and real estate department. The Straits Times understands that as the property market took off last year, he took on more work than he could handle.

He had more than a dozen secretaries who processed and handled clients’ matters, said a staff member who resigned recently. Typically, a lawyer would have up to five assistants to cope with similar property-related work.

It is believed that some of Mr Zulkifli’s transactions stalled when he could not complete his work on time and there were penalties to pay for the delays.

One such transaction is believed to have led to a $200,000 penalty for a property valued at $700,000, after a delay caused the seller to offer the property to another buyer at $900,000.

A property seller who lost money on a deposit due to him from Mr Zulkifli alleged that the lawyer dipped into some other client’s monies in the firm’s account to fork out the difference and make the original deal stick. Such payments are not allowed and as his troubles piled up, they may have snowballed.

The current rules are that two lawyers must sign cheques to withdraw money from a client’s account for any amount exceeding $30,000, among other things. It appears that Mr Zulkifli acted alone and may have forged the second signature or perpetrated some other fraud.

It is believed the $6 million disappeared as he kept ‘rolling’ money to pay penalties, but it is unclear how much he kept for himself before he fled.

More than a dozen people have reported that their deposits with the firm’s conveyancing section went missing.

It is understood investigators are now trying to establish the extent of unauthorised payoffs he made, and attempts are expected to be made to reclaim these monies.

Meanwhile, the firm remains open for business at its premises at the HDB Hub in Toa Payoh Central. Only the conveyancing section was affected by Mr Zulkifli’s disappearance.

‘We’ve secured the interests of all the affected clients and our other work is going on,’ partner Sadique Marican said, when contacted by The Straits Times.

Two victims said they would give the firm more time to settle the outstanding amounts owed.

Mail company manager John Sasayiah, who lost some $26,000 in deposits, said: ‘We want to be fair to them but, at the same time, I hope to see some closure by this month.’

Mr Zulkifli, a bachelor, lived at his family home in Chai Chee until about two years ago. He and his younger sister moved out after their mother died of cancer in 2005. Their father had died earlier.

‘The family kept to themselves and hardly mixed with anyone,’ said a neighbour who had lived in his block in Chai Chee Street for more than 20 years.

‘Even when their mother died, we did not know.’

Source : Straits Times - 2 Jan 2008

December 31, 2007

Will sale of house affect tenancy agreement?

Filed under: Legal Ground, Rental News — Propertymarketupdates @ 11:45 pm

Q WE RENTED out our house in April last year. We signed a three-year tenancy agreement prepared by the tenant’s agent.

As the property’s price has gone up a bit, we wish to sell this house. A potential buyer is willing to offer a price but does not wish to take over the existing tenancy agreement as he intends to live there.

After going through the tenancy agreement, I realise that something is amiss.

In the terms and conditions under ‘option to renew’, it states that the tenant is entitled to a three- year renewal on the same terms and conditions if the tenant makes a written request not less than three months before the expiration of the tenancy and if there is at the time no ‘existing breach or non-observance of any of the agreements and stipulations on the part of the tenant herein contained’ and ‘as long as the landlord remains unchanged’.

In another part of the terms and conditions, it says that ‘in the event that the landlord decides to sell the premises, the landlord or his agent will be permitted to arrange viewing of the premises at a reasonable time of the day by prior appointment giving one day’s notice. The landlord will have to sell with tenancy to the new purchaser’.

1. Can we break the lease? What is the penalty?

2. If the buyer takes over the tenant, does he have to sign a fresh tenancy agreement? What if he does not agree with the rental or terms and conditions?

A FIRST, the current period of the lease. You cannot break the lease unless there is a breach of any of the covenants. These covenants are usually spelt out in the Tenancy Agreement.

The most common covenant would be the duty for the tenant to pay rent. If he does not pay the rent on time or at all, it is a breach of the covenant which may entitle you to terminate the tenancy agreement. You will need to look closely at the provisions on whether you need to give notice to the tenant and to allow him a grace period to remedy the breach.

Second, the contractual obligation to renew the lease for a further three years at the same price provided (1) the tenant wishes to renew the lease and (2) he was not in breach of any of the covenants (that is, non-payment of rent) at the time he asks to renew the lease.

Insofar as this clause is concerned, it is a contractual term which you have agreed to and on which you cannot now renege.

A breach of the tenancy agreement is a breach of the contract. The loss payable to the tenant would be that which would put him in a position as if the tenancy had never been terminated.

This means that he is entitled to claim from you the additional rent he has to pay in order to get accommodation of the same or similar size and location. In other words, you would be liable to pay him for additional rent incurred for three years plus the remaining period of the current term.

To answer your second query, when a purchaser buys a property with tenancy, it means that he is agreeing to take over as the landlord from the last owner.

In other words, the tenancy will continue but merely with a new landlord. The terms cannot be changed.

In this case, a buyer needs to agree not only to buy the property, but also to the tenancy on the same terms as the current ones.

The clauses in this case are not usual and are not in the interests of the landlord.

Most tenancy agreements tend to be in the landlord’s favour and would include for example, a clause to say that whenever the landlord sells the property, the tenancy is deemed to be at an end and that there will be no recourse to the landlord for any loss incurred.

Doris ChiaConsultant Harry Elias Partnership

Advice provided in this column is not meant as a substitute for comprehensive professional advice.

Source : Sunday Times - 30 Dec 2007

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