Tampines Court collective sale in peril

July 12, 2008
Tampines Court collective sale in peril
STB rules not to bring forward Aug 7 hearing, which must take place
before deal is signed by July 25 deadline
By Jessica Cheam

THE sales committee at Tampines Court looks to have shot itself in
the foot after a ruling by the Strata Titles Board (STB) yesterday
almost certainly killed off its estate's $405 million collective
sale.

It delayed seeking mandatory STB approval for the deal and is now
caught in a deadline trap of its own making.

The key date is July 25, that is when the estate's sales committee
must complete the deal. However, that looks impossible now after
yesterday's STB decision.

The board ruled that it would not bring forward an Aug 7 hearing set
to allow testimony from witnesses that have yet to be called.

The STB had pencilled in the date after listening to sale objectors
on June 16 to 18 and 'taking into account the availability of all
parties and the board', it said.

Until that Aug 7 hearing is conducted, the sale cannot be signed and
sealed.

The Straits Times understands that the sales committee wanted a date
change as the buyers - Frasers Centrepoint and Far East Organization -
will not extend the completion deadline.

With no extension, the sale agreement will likely lapse on July 25.
This means the developers can walk away from a deal that looks far
less compelling now than last July, given souring homebuyer sentiment
and escalating construction costs.

However, this might be a blessing in disguise for some owners at the
estate. The deal was inked just before the property boom at prices
around $430 per sq ft (psf), but private homes in Tampines now go
from $550 to $700 psf.

The deadline crunch seems to be of the sales committee's own making.

The conditions of the sales agreement were met on July 25 last year
but the committee delayed applying for the standard STB approval
until Jan 7.

The committee told the STB that it wanted to await the outcome of
legal challenges over the contentious Gillman Heights sale.

The committee argued that if the Gillman Heights sale was halted over
issues of majority consent, it would have made a Tampines Court
application futile.

In the Gillman Heights case, minority owners appealed all the way to
the High Court, claiming that collective sale rules did not apply to
former Housing and Urban Development Company (HUDC) estates.

Tampines Court is also a former HUDC estate so any ruling could have
killed its own collective sale.

But Justice Choo Han Teck ruled last month that a privatised HUDC
estate can be sold collectively if the requisite conditions are met.

While that also cleared the way for the Tampines Court sale, it left
the sales committee with little time to tie up loose ends, including
objections by minority owners.

The STB registrar had some sympathy yesterday for the committee's
argument about why it delayed applying for sale approval.

But he pointed out that a sale agreement has a deadline and, by
waiting for the High Court ruling, the committtee took the risk that
it would not have enough time to get a ruling from the board before
the expiry date.

'This is a calculated risk, whose consequences they will have to
bear,' he said.

'The board should not be pressured to accommodate a deadline set by
the applicants and the buyer.'

A lawyer acting for the minority owners told The Straits Times that
he did not want to comment on the outcome.

The one lifeline for the majority owners would be if the buyers
extend the deadline but that also looks a lost cause.

Far East Organization and Frasers Centrepoint told The Straits Times
last night that they are ready to complete the deal, but 'the onus
was upon the vendors to secure the STB order within the agreed
timeframe, which is about 16 months from the date of the agreement'.

Savills director of marketing and business development Ku Swee Yong
said since the deal was inked last July, construction costs have
escalated a lot faster than mass market property prices.

'The project, unsurprisingly, has become less attractive,' he said.

Tampines Court is a sizeable 702,162 sq ft site with 560 units. It
could be redeveloped into a new condominium with around 1,580 units
averaging 1,300 sq ft.