CPF account losses are not considered a financial losses

last SG · 2007-02-22T18:10:58+00:00

firstly if i read your previous reply correctly, i highly doubt that the estate management professors are the reasons why plot ratio in the east area remaine...

SevenEleven SG

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

SevenEleven SG

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

SevenEleven SG

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?

Lowclassman SG

Democratic Society? Mr. Green

spinsugar SG

...based on justice and equality so as to achieve happiness, prosperity and progress for our Nation?

Did our leaders not pledge that every time they sing our National Anthem? Neutral Where is the justice, the equality, the happiness, the prosperity and the real progress for us heartlanders?

ShutterBug SG

It's their characteristics what.. typical style of our gov; anything to do with their policies, it is NEVER EVER wrong.

BillyBong SG

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?

Lowclassman SG

Originally posted by spinsugar:

...based on justice and equality so as to achieve happiness, prosperity and progress for our ELITES!!! Mr. Green

Did our leaders not pledge that every time they sing our National Anthem? Neutral Where is the justice, the equality, the happiness, the prosperity and the real progress for us heartlanders?[/b]

maurizio13 SG

Just like their investment decisions overseas, they are never wrong also.

foomwee88 SG

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!!!! Laughing

stiffness SG

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.

foomwee88 SG

I beg to differ from yr views on this matter.

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!!!

lionnoisy SG

2.The loss,even CPF Boaerd did not require them to top up by cash,is a loss.
No question at all.

Strata Title Board is wrong in justice .

Other sellers have to compensate them before split the sales proceeds.

stiffness SG

Originally posted by foomwee88:
I beg to differ from yr views on this matter.

And you're most welcome to differ in your views, as much as I am in my rights to state mine Smile

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?

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.

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.

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.

foomwee88 SG

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!!!!

stiffness SG

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.

As for subsidiary, here's the statutory definition (the one that applies in this case)...

"subsidiary proprietor" means

(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;

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.

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;

foomwee88 SG

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.

stiffness SG

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.

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?

foomwee88 SG

Originally posted by stiffness:

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]

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!!

stiffness SG

[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?