Last week, owners of Chuan Park were notified by the law firm in charge of the pooled sale that 10 unit owners had filed objections with the Strata Titles Board. The Strata Titles Board will conduct the mediation and the date of the first mediation meeting has not yet been set.
The Strata Titles Board must reach an agreement between the parties within 60 days of the first mediation meeting.
If mediation fails, the consenting owners must apply to the High Court for an order of sale.
The Board has appointed lawyers to mediate and, if necessary, apply to the High Court for an order of sale on behalf of the majority of homeowners.
Springview Gardens in Lorong Chuen was sold by private treaty to a consortium consisting of Kingsford Development and MCC Land in July this year for $890 million. The deal was brokered by real estate consulting firm ERA.
Springview Gardens is part of a 99-year leasehold project with 444 residential units and 2 commercial units.
According to the Urban Redevelopment Authority's 2019 overall development blueprint, the project occupies 400,588 square feet with a total floor area ratio of 2.1 and a total floor area of 841,236 square feet.
Upon completion of the transaction, each household will receive approximately $1.16 million to $2.53 million.
Several owners, who hold a total of 10 units, found the calculation of the collective sale price and income per unit unreasonable and therefore filed a protest with the Strata Titles Authority about two weeks ago.
According to the documents they submitted to the authority, Springview Garden had a maximum gross floor area of 89,824 square meters, equivalent to a plot ratio of 2.4, when the last round of the sale program was conducted in 2017.
However, the sales price for this round was based on a plot ratio of 2.1, and the total GFA was 13 percent less than in 2017.
One of the owners argued that the buyer, in the letter of purchase rights, offered nine conditions for the withdrawal agreement, and they were gratuitous.
One of them is that the total floor area must be at least 89,824 square meters, which is the area in 2017 when URA responded to an inquiry about the development baseline.
The plot ratio is equal to 2.4, so why should the asking price be calculated based on a plot ratio of 2.1
She noted that increasing the plot ratio means the developer can build more units and save about $93 million in land appreciation fees.
In the revenue calculation method, the strata area and share value of the units are each 5%, but the market valuation is 90%.
The opposing owners argued that this calculation was detrimental to Springview Gardens and the majority of owners. It is also argued that the GRC and ERA lacked clear communication with the owners prior to the transaction.
Because the reserve price changed several times, homeowners were not aware of the number of homeowners who had signed on to agree to the collective sale at different times and at different prices.
Some homeowners mistakenly believed that more than 80% had accepted the $860 million price and agreed to sell at that price.
At the beginning of this round of sales, the price indicated for Spring View Garden was $938 million, which was then adjusted downward to $860 million for a time, but was later adjusted upward to $890 million, a decrease of 5.11% from the original price indicated.
Another homeowner argued that the collection and sale process should be more open and transparent.
After the committee and ERA got the consent of 80% of the owners, they did not immediately tell us the exact percentage and who the buyers were.
I think it is their responsibility to disclose this information in a timely manner. We are not against the collection and sale, but we want everyone to uphold honesty and keep the process transparent.
