CPF account losses are not considered a financial losses
-
ST Forum 9 Feb 2007
I AM shocked by the landmark ruling of the Strata Titles Board that losses incurred in one's CPF account are not considered a financial loss in the case of an en bloc sale ('Couple lose fight on collective sale'; ST, Feb 6).
CPF funds are for our retirement, housing and medical needs and are our hard-earned savings.
With the current buoyant property market and frequent en bloc sales, it is time that the rules governing such collective sales be reviewed to ensure that no one else will suffer similar financial hardship as a result of actions beyond their control.
William Foo Kuo Meng -
ST Forum 7 Feb 2007
In the article excerpting a speech by Mr Ngiam Tong Dow, 'Maximising the lie of the land' (ST Review, Feb5), there is the claim that Singapore's rules governing en bloc sales of private property are innovative and that the 'happy outcome is that both the individual and public interest are served'.
Singapore's en bloc rules have led to people being forced from their homes and neighbourhoods, and to rampant speculation in the property market.
Rather than maintain their buildings, owners are incentivised to suspend maintenance in order to maximise profit at the expense of those who truly want a home instead of just an investment.
Why use the sinking fund to repair the building when you can just wait until things deteriorate and you can persuade your neighbour to give up and sell out?
Mr Ngiam says he is 'glad to see that the invisible hand of pricing has often worked its wonders'.
In fact, it is the distorting hand of government that has permitted the abrogation of property rights and the distortion of pricing.
If the market was truly efficient, the price of flats would fully reflect the value of the building and the land they stand on.
With construction costs running at about $200 per square foot, how does one explain the sudden jump in value of a property from $1,000psf to $2,400psf simply by destroying the existing building?
It is because the prospect of an en bloc sale encourages short-term thinking and treats buildings as tradable assets, instead of homes.
If one takes the example of Ardmore Park, it is hard to understand any reason for the destruction of pretty much every building on the street and the surrounding neighbourhood. These were sound, desirable residences. What exists now looks like a war zone.
In most other economies, these buildings would increase in value, given their location and quality. If an owner wanted to profit from the increase in valuation, he would sell to a new buyer, not vote for the destruction of the property.
When a building does go en bloc, it is not a triumph of the majority over the individual, as Mr Ngiam asserts, but rather the triumph of the developer, the estate agent, and a few speculators.
The environmental cost of destroying perfectly sound buildings because of this price distortion is inexcusable.
The real cost is borne by those forced to live through the destruction of the existing building and eventual construction of a replacement.
The reality on the ground is quite different than the idyllic picture painted by Mr Ngiam.
Rather than an efficient market in which willing buyer and willing seller set prices, the en bloc rules have had the unintended consequence of distorting the market, disincentivising building maintenance and upkeep, raising housing costs and destroying the quality of life for tens of thousands of residents of Singapore.
Waleed Hanafi -
Suprisingly, one were told that if you sell your HDB flats and incurred a losses in the CPF, the CPF Board has the right to ask you to top up the losses incurred.Originally posted by SevenEleven:ST Forum 9 Feb 2007
I AM shocked by the landmark ruling of the Strata Titles Board that losses incurred in one's CPF account are not considered a financial loss in the case of an en bloc sale ('Couple lose fight on collective sale'; ST, Feb 6).
CPF funds are for our retirement, housing and medical needs and are our hard-earned savings.
With the current buoyant property market and frequent en bloc sales, it is time that the rules governing such collective sales be reviewed to ensure that no one else will suffer similar financial hardship as a result of actions beyond their control.
William Foo Kuo Meng
Does the court ruling applies to the CPF? -
Democratic Society?Originally posted by SevenEleven:Suprisingly, one were told that if you sell your HDB flats and incurred a losses in the CPF, the CPF Board has the right to ask you to top up the losses incurred.
Does the court ruling applies to the CPF?
-
...based on justice and equality so as to achieve happiness, prosperity and progress for our Nation?Originally posted by Lowclassman:Democratic Society?
Did our leaders not pledge that every time they sing our National Anthem?
Where is the justice, the equality, the happiness, the prosperity and the real progress for us heartlanders? -
It's their characteristics what.. typical style of our gov; anything to do with their policies, it is NEVER EVER wrong.
-
I've always said that if residents choose to go for En-bloc sales, EVERY RESIDENT in that block must agree to sell. If even one refuses, the sale CANNOT go through.
Mr Hanafi spoke from the heart.
Instead of seaching for a home, our people have become greedy traders, driven by the smell of cold hard cash rather than a proper home. Their only justification that helps them sleep better at night is that they pocket a sizable profit over their original purchase price. And that makes the transaction worthwhile.
No thought is given to the reluctant owners, who now feel displaced against their will, or those who lose out because they stand to make a loss from the sale, despite STRATA claiming that CPF losses do not equal financial losses.
And one wonders why Singaporeans continue to complain about our own self-centered behaviour? -
Originally posted by spinsugar:
...based on justice and equality so as to achieve happiness, prosperity and progress for our ELITES!!!
Did our leaders not pledge that every time they sing our National Anthem? Where is the justice, the equality, the happiness, the prosperity and the real progress for us heartlanders?[/b] -
Just like their investment decisions overseas, they are never wrong also.Originally posted by ShutterBug:It's their characteristics what.. typical style of our gov; anything to do with their policies, it is NEVER EVER wrong. -
But 4 this couple,I hve reservation!!!
If u drag this en-block sale ,it will affect more than 100 family units there!!!!
I think MST board has 2 make such a decission to save more family than individual!!!!
If I m wrong,pls correct me!!!!
-
Actually that's not entirely accurate. You need to distinguish between people who stay there (owners) and people who do not stay there but are renting the place out, and hence will not hesitate to sell the place once they can make a profit from their property (investors).Originally posted by foomwee88:But 4 this couple,I hve reservation!!!
If u drag this en-block sale ,it will affect more than 100 family units there!!!!
I think MST board has 2 make such a decission to save more family than individual!!!!
If I m wrong,pls correct me!!!!
The minority who usually resist enbloc sales, are owners. They have the most to lose - they can't find something of equivalent size no matter how much they're getting, in the same area. Moving out means inconveniences for their kids who need to take more travel time to go to school, the parents will probably have to spend more time travelling too, they have to establish new networks since the old ones built around their neighbourhood are gone.
Investors - they don't care cos they don't stay there.
So what enbloc sales are doing to everyone in the property? Well, to investors it means a net gain in their property investment portfolio (usually a net gain, otherwise they won't sell the property). But to owners, it means being evicted.
The financial loss couple is interesting - we do not know if they stay there or rent it out, but they are battling on the ONLY clause in the law that allows an enbloc sale to be stopped in its tracks - financial loss. You'll see however, letters in the forum pages from minority who are largely owners, who do not want to move but have no choice.
Imagine for yourself, your own home, your FREEHOLD hold which is supposed to be yours FOR LIFE, can be taken from you, every 10 years or so. If you CANNOT afford to upgrade to landed properties, and you do not want to stay in HDBs, and therefore you're stuck in private condos, you'll in all likelihood have to move every 10 years when the investors in your condo decide to sell your place enbloc. If that fails, watch your home surroundings deteriorate when the very same people (sales committee people are usually in the management committee too) let the place rot and force the maintenance costs to go up, to force people to sign for enbloc in the next round.
I agree with the poster above that because this are homes we're talking about, EVERYONE has to agree or the sale doesn't go through. -
I beg to differ from yr views on this matter.Originally posted by stiffness:Actually that's not entirely accurate. You need to distinguish between people who stay there (owners) and people who do not stay there but are renting the place out, and hence will not hesitate to sell the place once they can make a profit from their property (investors).
The minority who usually resist enbloc sales, are owners. They have the most to lose - they can't find something of equivalent size no matter how much they're getting, in the same area. Moving out means inconveniences for their kids who need to take more travel time to go to school, the parents will probably have to spend more time travelling too, they have to establish new networks since the old ones built around their neighbourhood are gone.
Investors - they don't care cos they don't stay there.
So what enbloc sales are doing to everyone in the property? Well, to investors it means a net gain in their property investment portfolio (usually a net gain, otherwise they won't sell the property). But to owners, it means being evicted.
The financial loss couple is interesting - we do not know if they stay there or rent it out, but they are battling on the ONLY clause in the law that allows an enbloc sale to be stopped in its tracks - financial loss. You'll see however, letters in the forum pages from minority who are largely owners, who do not want to move but have no choice.
Imagine for yourself, your own home, your FREEHOLD hold which is supposed to be yours FOR LIFE, can be taken from you, every 10 years or so. If you CANNOT afford to upgrade to landed properties, and you do not want to stay in HDBs, and therefore you're stuck in private condos, you'll in all likelihood have to move every 10 years when the investors in your condo decide to sell your place enbloc. If that fails, watch your home surroundings deteriorate when the very same people (sales committee people are usually in the management committee too) let the place rot and force the maintenance costs to go up, to force people to sign for enbloc in the next round.
I agree with the poster above that because this are homes we're talking about, EVERYONE has to agree or the sale doesn't go through.
First of all,u use the word "stay" has different meaning from "live" there?
Secondly,when more than 80% of the sub-divided building units wanted to sale their apartments,the small % of the units owners have to follow,this is a democratic way to decide the matter i.e the minority has to oblige the majority in order to progress!!!
Thirdly,we cant hve everyone to agree cauz this is a strata titled deed property and not individual owned property,thus the rights n interests belong to all units owners,which mean majority counted in all matter related to the titles.
I hve been living in the present condom which housed 285 units for more than 20 yrs and now a chairman of the MCST,can tell u that most of the units owners want to en-block sale due to old age of the estate and too good the property market now!!! -
2.The loss,even CPF Boaerd did not require them to top up by cash,is a loss.Originally posted by foomwee88:But 4 this couple,I hve reservation!!!
If u drag this en-block sale ,it will affect more than 100 family units there!!!!
I think MST board has 2 make such a decission to save more family than individual!!!!
If I m wrong,pls correct me!!!!
No question at all.
Strata Title Board is wrong in justice .
Other sellers have to compensate them before split the sales proceeds. -
Originally posted by foomwee88:
And you're most welcome to differ in your views, as much as I am in my rights to state mine
I beg to differ from yr views on this matter.
First of all,u use the word "stay" has different meaning from "live" there?
By 'stay' I mean subsidiary proprietors (to use the proper term, or SP for short) who have lived in the particular development for a substantial number of years, for example 60% of the age of the development at the point when it goes en-bloc. So if the property is 20 years old, such a SP that is deemed an 'owner' if he/she has lived there for 12 yrs, to distinguish them from the 'investors' who may or may not have lived there for a substantial period of time. My argument would be that these 'owners' should be given more voting rights in the en-bloc process, since they are the ones that have a larger stake in the condominium than anyone else.
In other words, if a condo has 50% SPs who have lived there for (in the above example) more than 12 years, these SPs should have a greater say in the sale than SPs who have lived there for less. Such a percentage can be determined by the government in the same arbitrary way they have determined the 10 year boundary for en-bloc sales.Secondly,when more than 80% of the sub-divided building units wanted to sale their apartments,the small % of the units owners have to follow,this is a democratic way to decide the matter i.e the minority has to oblige the majority in order to progress!!!
If we're now talking about the 'democratic way' then I draw the analogy with the General Elections where only Citizens (and not foreigners or perm residents) are allowed to vote. This is because only citizens have been deemed by most governments to have a personal, social and financial stake in the country. If that is the case, should not 'owners' who have a personal, social as well as financial stakes be the only ones allowed to vote for enblocs, as opposed to 'investors' who have purely financial stakes in a property?
That is an inaccurate reading of the Land Titles (Strata) Act. Only when the Strata Titles Board ratifies the sale, then and only then, are all SPs required by law to collectively sell their lots and common property in accordance with the CSA. Prior to that, everyone is, as far as the law is concerned, individual SPs. The CSA as a binding contract, may require those who sign it, to surrender some of their ownership rights, but anyone who has not signed it, is considered by law an individual SP and may act accordingly.
Thirdly,we cant hve everyone to agree cauz this is a strata titled deed property and not individual owned property,thus the rights n interests belong to all units owners,which mean majority counted in all matter related to the titles.
The 'agreement' only occurs when the STB agrees to the sale, and not before then.I hve been living in the present condom which housed 285 units for more than 20 yrs and now a chairman of the MCST,can tell u that most of the units owners want to en-block sale due to old age of the estate and too good the property market now!!!
This is what I do not understand - are all developments built by construction companies with a lifespan of 10-20 years only? If the place is run down, is it not the responsibility of the management council to ensure that the place is well maintained and even upgraded if the sinking fund allows? In many countries in the West, buildings last for more than 40 years, easily. The onus is on individual owners to renovate their interiors, but the exterior is exceedingly well maintained and the property is well built. So the question is - if a place is run down, whose fault is it - the management council for failing to perform their duty of upkeeping, or the developers for building properties which generall begin to deteriorate in less than 20 years?
Even more legally conflicting is this - you say you are the chairman of the MCST, that is you have a legal obligation to your property to upkeep, maintain and even upgrade should the funds allow. Yet if you join the sales committee of the enbloc sale, as many MC members do, your obligation to SPs is to ensure a fast and efficient sale of the property. Do you not see this as a conflict of interest, should ANY members of the MC become members of the SC? Out of 5 enblocs in my neighbourhood, *everyone* of them have sale committees that comprise of management council members. Consequence - maintenance drops, place is 'encouraged' to run down, to 'encourage' owners to agree to the en-bloc. Sometimes this happens even before the 10 year mark happens, as in 2 cases, when the MC held back anything but urgent repairs when the property was only 8 years old, in anticipation of enbloc sale. Their sinking fund is HUGE now, but it all goes to the developers. -
Since u know the meaning of stay and live!!!!Originally posted by stiffness:This is what I do not understand - are all developments built by construction companies with a lifespan of 10-20 years only? If the place is run down, is it not the responsibility of the management council to ensure that the place is well maintained and even upgraded if the sinking fund allows? In many countries in the West, buildings last for more than 40 years, easily. The onus is on individual owners to renovate their interiors, but the exterior is exceedingly well maintained and the property is well built. So the question is - if a place is run down, whose fault is it - the management council for failing to perform their duty of upkeeping, or the developers for building properties which generall begin to deteriorate in less than 20 years?
Even more legally conflicting is this - you say you are the chairman of the MCST, that is you have a legal obligation to your property to upkeep, maintain and even upgrade should the funds allow. Yet if you join the sales committee of the enbloc sale, as many MC members do, your obligation to SPs is to ensure a fast and efficient sale of the property. Do you not see this as a conflict of interest, should ANY members of the MC become members of the SC? Out of 5 enblocs in my neighbourhood, *everyone* of them have sale committees that comprise of management council members. Consequence - maintenance drops, place is 'encouraged' to run down, to 'encourage' owners to agree to the en-bloc. Sometimes this happens even before the 10 year mark happens, as in 2 cases, when the MC held back anything but urgent repairs when the property was only 8 years old, in anticipation of enbloc sale. Their sinking fund is HUGE now, but it all goes to the developers.
Pls find out the meaning of subsidiary for me?
And who tell u I m in the SC???? pls dont put word into my mouth,ok!!!!I m a chairman n not a member of SC,!!!!!!
Thanks!!!! -
Read my post carefully - I said "IF you join the sales committee". I was pointing to the conflicts of interests between you as a member of a MC and the powers and responsibilities you have, and your interest to sell the development, which would be in conflict with your MC duty.Originally posted by foomwee88:Since u know the meaning of stay and live!!!!
Pls find out the meaning of subsidiary for me?
And who tell u I m in the SC???? pls dont put word into my mouth,ok!!!!I m a chairman n not a member of SC,!!!!!!
Thanks!!!!
As for subsidiary, here's the statutory definition (the one that applies in this case)..."subsidiary proprietor" means —
The point here is not the definition of SP, but the FACT that any application for a collective sale can only be made by a majority of SPs and even then, only after the STB has ratified the sale, does the LOTS AND COMMON PROPERTY become sold collectively, and not before. Everything before the STB agreeing to the sale is still individual SPs just getting together to agree or not to agree to the sale.
(a) the registered subsidiary proprietor for the time being of the entire estate in a lot including an estate for life, an estate in remainder or an estate in reversion;
Effect of order of Board
84B. —(1) Where a Board has made an order under section 84A (6), (7) or (11) —
(a) the order shall bind all the subsidiary proprietors of the lots in the strata title plan, their successors in title and assigns and any mortgagee, chargee or other person with an estate or interest in land;
(b) the subsidiary proprietors of the lots shall sell the lots and common property in accordance with the sale and purchase agreement; -
Ok, I get yr point,u r talking about a chicken and egg question but what I mentioned here is the different meaning of a landed property and a condominium estate,where in an estate, all the sub-divied building units owners r SP which is like a company that is owned or controlled by individual or joints various owners.Originally posted by stiffness:
In a company minority has to oblige the majority i.e 80% of the SP in the estate in regards with end-block sales to proceed with.
We cannot let only the minority SPs in the estate who hve various reasons to hold back the benefits of the other majority members same as in a company, major shareholers are having a say in the selling out of the company. -
The analogy, while good, is not commensurate with the situation for en-blocs, unless you're willing to accept that EVERYONE in the development view their homes as purely a financial asset and nothing more.Originally posted by foomwee88:Ok, I get yr point,u r talking about a chicken and egg question but what I mentioned here is the different meaning of a landed property and a condominium estate,where in an estate, all the sub-divied building units owners r SP which is like a company that is owned or controlled by individual or joints various owners.
In a company minority has to oblige the majority i.e 80% of the SP in the estate in regards with end-block sales to proceed with.
We cannot let only the minority SPs in the estate who hve various reasons to hold back the benefits of the other majority members same as in a company, major shareholers are having a say in the selling out of the company.
The problem arises because people see their homes as more than a dot point in their portfolio. It's a HOME with sentimental and social values behind it, especially for those who have stayed in it for a substantial number of years and have grown roots and community networks around their home. The places they go to - shops, clinics, bus stops, schools for their children. All these are not factored into your analogy, which is unfortunately what the government views enblocs as too.
The proper analogy is that of the General Election, where only SG citizens are allowed to vote, and foreigners and PRs are not. The reason why this is so in SG and in many other countries, is because governments do not want a country to be equated to a company, which does not view social stakes as important. In a country, the assumption is that a citizen is fully integrated into the society he/she lives in, and therefore have that right to vote. That's why there's a need to differentiate different types of SPs when it comes to voting for enblocs.
People who have stayed there for say 70% of the age of the condo when it goes enbloc should have double the voting rights. They would be equivalent to 'citizens'.
Or do you want your country to be dictated by votes from people outside it, the foreigners or PRs, who have little social investment in your nation? No, right? So why should it be any different for homes? -
Originally posted by stiffness:
Really, as a 56 yrs old man doesnt know what u r trying to say!!!
The analogy, while good, is not commensurate with the situation for en-blocs, unless you're willing to accept that EVERYONE in the development view their homes as purely a financial asset and nothing more.
The problem arises because people see their homes as more than a dot point in their portfolio. It's a HOME with sentimental and social values behind it, especially for those who have stayed in it for a substantial number of years and have grown roots and community networks around their home. The places they go to - shops, clinics, bus stops, schools for their children. All these are not factored into your analogy, which is unfortunately what the government views enblocs as too.
The proper analogy is that of the General Election, where only SG citizens are allowed to vote, and foreigners and PRs are not. The reason why this is so in SG and in many other countries, is because governments do not want a country to be equated to a company, which does not view social stakes as important. In a country, the assumption is that a citizen is fully integrated into the society he/she lives in, and therefore have that right to vote. That's why there's a need to differentiate different types of SPs when it comes to voting for enblocs.
[b]People who have stayed there for say 70% of the age of the condo when it goes enbloc should have double the voting rights. They would be equivalent to 'citizens'.
Or do you want your country to be dictated by votes from people outside it, the foreigners or PRs, who have little social investment in your nation? No, right? So why should it be any different for homes? [/b]
Can an estate be compared with a country ????
Do u know when n what were strata titled properties evolved from???
Is it 80% of the SP r all investors n not units owners???%%%%%
In our estate,we hve 98% living here r SP n more than 15 yrs but who r willing 2 give a vote 4 en-block sale!!!!
We cant play an emotional card n 4go the progress of the human beings and upgrading of an estate!!!!
Many a time,those disagree with en-block r the most greedy lots whom I reserve my comments!! -
[I see no point in arguing about the development of strata titled properties unless you can tell me what your point is.]Originally posted by foomwee88:Really, as a 56 yrs old man doesnt know what u r trying to say!!!
Can an estate be compared with a country ????
Do u know when n what were strata titled properties evolved from???
Is it 80% of the SP r all investors n not units owners???%%%%%
In our estate,we hve 98% living here r SP n more than 15 yrs but who r willing 2 give a vote 4 en-block sale!!!!
We cant play an emotional card n 4go the progress of the human beings and upgrading of an estate!!!!
Many a time,those disagree with en-block r the most greedy lots whom I reserve my comments!!
Put it this way, by differentiating the different types of SPs, you are actually advantaging yourselves if the idea of more voting rights are given to you and others like you who have stayed in the property for a substantial number of years. The point is that my suggestion actually protects people like you who are owners who have a higher right to the development than investors who hardly even bother to stay there.
And to many people, their homes and communities are as important as an abstract concept such as nation or country. So I fail to see why it shouldn't be equated.
Also, please do not equate 'progress of the human beings' and 'upgrading of an estate'. The latter, currently, is a purely financial transaction. The former is not. Otherwise, we'd allow all sorts of progress that would be highly controversial because of the ethics and 'emotional card'. We'd for example, tear down the padang and convert it into a shopping mall in the name of progress, and move the Botanic Gardens to Tuas so that its current plot can be converted into more luxury housing.
So, as a 56 years old who have been staying in that home for over 15 years, do you feel no sense of loss, no sentimental attachment to a place where you've probably seen your children grow up? -
Landmark ruling on figuring loss in en bloc sales
(SINGAPORE) The prospect of CPF losses cannot be used to stop an en-bloc sale, the Strata Titles Board (STB) ruled yesterday. In a landmark decision, it said the principal amount withdrawn from CPF accounts and the accrued interest cannot be taken into account when determining whether a financial loss has been suffered by owners involved in such a sale.
The board made the point in a decision approving the $385 million collective sale of Waterfront View in Bedok to a joint venture between Far East Organization and Frasers Centrepoint.
Waterfront View is a privatised HUDC estate. The STB tribunal, with the board’s deputy president Alfonso Ang presiding, did not agree with the view of Yeo Loo Keng and his wife Cheryl Lim Pui Yew - who are objecting to the collective sale of Waterfront View - that their ‘net proceeds of the sale are insufficient to redeem our mortgage and CPF charge’ and that this amounted to a financial loss. The Yeos had an outstanding mortgage of $341,118.90 as of Oct 11 last year, which they could repay from their $660,377 share of proceeds from the en-bloc sale, even after making allowed deductions.
The CPF Board wrote to the couple in November last year, confirming that ‘if the sale proceeds after deducting the outstanding housing loan owing to the mortgagee DBS Bank Ltd is insufficient to fully refund the principal amount withdrawn and accrued interest to both your CPF accounts, the CPF Board does not require both of you to make good the shortfall to your CPF account in cash.
‘Instead only the net sale proceeds (i.e. the selling price less outstanding home loan) is required to be refunded to your CPF account’, the CPF Board said in its letter.
The STB tribunal said in its ruling that the section of the Land Titles (Strata) Act that should apply is Section 84 (A) (7) b, which allows the board to throw out a collective sale application if it is satisfied that the proceeds to be received by any objecting party are insufficient to redeem any mortgage or charge on the property.
In view of the CPF BoardÂ’s statement that it will allow the redemption, the Yeos could, with the proceeds of sale, redeem both the bank mortgage and discharge the CPF charge on their property. DBS Bank has the first charge on the property and CPF Board has second charge.
The tribunal said it is therefore satisfied that the YeosÂ’ objection does not come within the ambit of this clause in the Act.
The Act also defines a financial loss - which could be grounds for STB to throw out a collective sale application - as having been incurred by an owner if the sale proceeds he receives, less any deductions allowed by STB, are less than the price he paid for his property.
The STB tribunal further ruled that the privatisation fee for converting Waterfront View from a former HUDC estate to a private estate - $19,535 per unit - be allowed as a deductible expense in determining whether a financial loss has been suffered by owners in a collective sale. This is because the process of converting the title is a necessary expense, without which Waterfront View will not be eligible for en-bloc sale.
Additionally, the tribunal upheld earlier decisions by STB on the following deductibles - that interest and renovation costs not be allowed but that the cost of legal fees and stamp duty at the time of purchase of the property be allowed.
It also ruled that a penalty the Yeos paid to DBS Bank for early loan repayment should not be an allowable deduction because it is a ‘private contractual matter’ between the bank and the Yeos.
Under the grounds of decision read by Mr Ang, the Yeos ‘do not suffer a financial loss based on the net proceeds of sale less the allowable deductions - legal costs and stamp duty at the time of purchase and the costs of privatisation’.
The couple bought their apartment at Waterfront View in 1994 for $515,000 and will receive a gross sum of $660,377.35 in the collective sale. ‘They had not suffered any financial loss even if deductions allowable are taken into account,’ the tribunal said.
It turned down an application by the majority owners’ counsel, Michael Kuah of Lee & Lee, to require the Yeos to fully bear the costs of calling expert witnesses and law firm Lee & Lee’s fees for the STB hearing. Among other things, the tribunal said the objections raised by the Yeos were ‘not frivolous’ and they were acting within their rights in objecting to the collective sale.
BT understands the costs of the entire application to STB - including about $60,000 legal fees charged by Lee & Lee for the proceedings, plus a further $20,000 for expert witnesses, and the costs of placing notices in the newspapers - could work out to about $300,000 to $400,000. The amount has already been set aside through sums of about $1,000 per unit, collected separately from the majority owners. Leong Yung Chang of Veritas Law Corporation, representing the Yeos, said his clients are considering whether to appeal against the STB ruling.
----------------------------------------------------------------------------------------------------
Now that I read about the case, I am now indeed somewhat shocked.
The interest that was paid on the mortgage must have been substantial enough to warrant the Yeos to claim that they have suffered a loss.
But it seems that the tribunal doesnt allow interest as a deductible.
What is the rationale behind this?
Furthermore, I am somewhat disturbed that the definition of "financial loss" which doesnt include the interest. Isn't interest a legitimate financial cost when a mortgage is taken up?
Can anyone comment? -
First of all, I dont agree with U that a condominim esate = a country which can last more than a few hundred years but an estate which at the most has to be retired after 55 years same as me!!!Originally posted by stiffness:[I see no point in arguing about the development of strata titled properties unless you can tell me what your point is.]
Put it this way, by differentiating the different types of SPs, you are actually advantaging yourselves if the idea of more voting rights are given to you and others like you who have stayed in the property for a substantial number of years. The point is that my suggestion actually protects people like you who are owners who have a higher right to the development than investors who hardly even bother to stay there.
And to many people, their homes and communities are as important as an abstract concept such as nation or country. So I fail to see why it shouldn't be equated.
Also, please do not equate 'progress of the human beings' and 'upgrading of an estate'. The latter, currently, is a purely financial transaction. The former is not. Otherwise, we'd allow all sorts of progress that would be highly controversial because of the ethics and 'emotional card'. We'd for example, tear down the padang and convert it into a shopping mall in the name of progress, and move the Botanic Gardens to Tuas so that its current plot can be converted into more luxury housing.
So, as a 56 years old who have been staying in that home for over 15 years, do you feel no sense of loss, no sentimental attachment to a place where you've probably seen your children grow up?
A condominium is like a company and all the SPs are the shares holders of the company and that the company can be sold out by majority votes not based on seniority but numbers of shares that ones have!!!
Our estate is more than 28 yrs old when we brought at S$ 250,000 in 1980s which is worth abount S$1.5 millions now,as we plan to migrate and those old ppls here want to downgrade to a smaller flat and live a more comfortable life why not say good bye n take the $ and go,of course ,there is sentimental attachment to a place but we r huamn beings who come to this world must work and live smart and fruitful to and for this life nothing is permarnent,enjoying while u can!!!!
Cheer!!!! -
Originally posted by loudmonkey:
The board (largely comprised of people who are working in areas that gain from en-bloc sales, mind you) distinguishes between 'necessary expenses' and 'personal expenses'. Legal fees, stamp duty, privatisation costs are necessary expenses paid by everyone involved in any flat purchase/development. Interest however is a personal expense along with renovation costs.
Now that I read about the case, I am now indeed somewhat shocked.
The interest that was paid on the mortgage must have been substantial enough to warrant the Yeos to claim that they have suffered a loss.
But it seems that the tribunal doesnt allow interest as a deductible.
What is the rationale behind this?
Furthermore, I am somewhat disturbed that the definition of "financial loss" which doesnt include the interest. Isn't interest a legitimate financial cost when a mortgage is taken up?
Can anyone comment? [/b]
In political terms, the STB has to balance between encouraging and facilitating en-bloc sales on the one hand, and being equitable on the other. If financial loss includes CPF losses, a substantial number of en-bloc sales might be blocked due to the financial loss clause. People keen to sell their places, and do not suffer such losses, will be obviously put out by such a decision if they have a single person in their property that will suffer from CPF losses.
Of course they have forgotten that the financial loss clause was put into the Land Titles (Strata) Act to protect individuals who might be forced to sell and not receive any profits after deductions. This clause is built specifically for the individual and not for the collective interested in selling the development. By excluding CPF losses, the collective is given greater consideration.
The damning nail in the coffin for the couple is the CPF letter which states they do not have to make good their CPF shortfall, which means in effect they can spend the rest of their lifetime paying the outstanding amt. This gives STB the leverage to point out that this is the couple's own problem, and should not be used against the collective interested in selling.
I hope the couple brings this up for appeal at the next level - the Supreme Court. I think it's a lopsided definition of financial loss that is rapidly favouring en-bloc sales rather than protect the individuals who will suffer from it. -
Originally posted by foomwee88:
Thanks for your honest feedback on your own situation - why you chose to sign the CSA and sell the place.
First of all, I dont agree with U that a condominim esate = a country which can last more than a few hundred years but an estate which at the most has to be retired after 55 years same as me!!!
A building can indeed last a few hundred years, if it is well maintained and well kept. A substantial number of residences in cities like New York and London have survived the wars and have been rebuilt, and now are very well kept. Indeed, following your statement, we should retire buildings such as City Hall, the old colonial houses, etc.
Two problems are accelerating the short lifespan of buildings:
1. Developers now are building for profit rather than aesthetics. They do not take pride in their design and are fully aware that in another 10-15 years time, the building can be demolished so why bother. The large number of new developments resemble one another, mainly because they are designed and built for maximum space utilisation, given the increasingly smaller unit spaces that new condos have.
2. The arbitrary age for enbloc sales of 10 years, which is truly arbitrary. I have stayed in buildings in Paris that have been upgraded and maintained to the highest standards, and these buildings are, as you say, as old as you.
People counter argue with the 'land is scarce' argument. I would often point out that the masterplan dictates how land is used, and if the government truly wants to maximise land, they'd bump up all plot ratios to the maximum especially in the suburbs now. So we'll have 36 storey buildings to cater to the influx of 2.5 million migrants (who in all likelihood will not be able to afford most of these new developments in the private condos in suburbs now). -
The RC building may be can last for more than 100 yrs but the estate cant cauz it is subjected to adverse outdoor and weather conditions, open car park o/d facilities and external wallings of the building would cost the MCST a bomb after past 20 plus yrs.Originally posted by stiffness:Thanks for your honest feedback on your own situation - why you chose to sign the CSA and sell the place.
A building can indeed last a few hundred years, if it is well maintained and well kept. A substantial number of residences in cities like New York and London have survived the wars and have been rebuilt, and now are very well kept. Indeed, following your statement, we should retire buildings such as City Hall, the old colonial houses, etc.
Two problems are accelerating the short lifespan of buildings:
1. Developers now are building for profit rather than aesthetics. They do not take pride in their design and are fully aware that in another 10-15 years time, the building can be demolished so why bother. The large number of new developments resemble one another, mainly because they are designed and built for maximum space utilisation, given the increasingly smaller unit spaces that new condos have.
2. The arbitrary age for enbloc sales of 10 years, which is truly arbitrary. I have stayed in buildings in Paris that have been upgraded and maintained to the highest standards, and these buildings are, as you say, as old as you.
People counter argue with the 'land is scarce' argument. I would often point out that the masterplan dictates how land is used, and if the government truly wants to maximise land, they'd bump up all plot ratios to the maximum especially in the suburbs now. So we'll have 36 storey buildings to cater to the influx of 2.5 million migrants (who in all likelihood will not be able to afford most of these new developments in the private condos in suburbs now).
In Singapore, we take the maximum life span of 60 yrs for an estate if it is properly maintenanced in good order and condition .
It is true that ,as a Sporean can't understand why Spore gov has this plot ratios controlled if the land is really scarce here, especially in the East side o f Spore,the plot ratio is 1.4 only.