CNN latest news 8/8/07
Horizon Towers unit owners could lose more than their
homes
By Tan Hui Leng, TODAY | Posted: 08 August 2007 1150 hrs
Unit owners of Horizon Towers may have won the latest battle to
halt its en bloc sale but they may be at risk of losing a whole
lot more than their homes, with a potential lawsuit for breach of
contract hanging over their heads.
In the worst-case scenario for these sellers, the buyers Hotel
Properties Limited (HPL), Morgan Stanley Real Estate and Qatar
Investment Authority could move to claim up to $1 billion from
the owners of the 173 units who signed the deal.
This works out to $5.78 million per unit more than the $2.3
million to $4 million offered for each apartment in the en bloc
deal.
"I think they are panicking wouldn't you, if you might lose
everything? If the damages are $5 million, they would have to give
up the apartment and pay up to $3 million on top of it," said one
party who declined to be named, as lawyers from both sides met
yesterday.
The unit owners have until 3pm today to respond to the buyers but
may well miss the deadline, as the sales committee is still
consulting with lawyers and will hold meetings with residents over
these two days, reported Channel NewsAsia.
On Monday, the three buyers had sent a letter through law firm
Allen and Gledhill to lawyers representing the sellers, alleging
breach of contract. This came after the Strata Titles Board (STB)
rejected an application for a collective sale order last Friday due
to technical irregularities.
The sellers have at least three options: Extend the deadline for
the completion of the sale by four months and file a fresh
application to the STB for a collective sale order; appeal to the
High Court to reconsider STB's decision; or be sued for breach of
contract.
One property analyst told Today: "The buyers have deep pockets and
the means to pursue a lawsuit. Are the more than hundred sellers
willing to band together on a long, and possibly costly, legal
process?"
Lawyer Shriniwas Rai, who represents some of the majority owners in
favour of the sale, said a fourth option is to file an Originating
Summons with the High Court to decide if the sales and purchase
agreement is still valid even while HPL is suing the
sellers.
Unit owners who had earlier opposed the $500 million en bloc deal,
however, would not be affected by the move, which is the latest
twist in a long-drawn saga.
Under the deal, the 199 apartment owners would have pocketed about
$2.3 million each and the 11 penthouse owners at least $4 million
each.
However, some minority owners had objected to the sale, saying they
were unhappy with the sales committee's performance and procedural
irregularities.
As en bloc sale prices across the island skyrocketed, owners who
had originally supported the deal crossed to join the dissenting
voices pointing out that the deal no longer reflected the
condominium's "true value".
Months of drama ensued and, with the original sale deadline of Aug
11 looming, came the STB's ruling on Friday.
Channel NewsAsia quoted director of research and consultancy at
Knight Frank, Nicholas Mak as saying: "The en bloc market is
watching very closely developments in this Horizon Towers saga. The
wider implication for the market is that buyers, sellers, their
agents and lawyers, now have to be very, very careful. They have to
look at their legal documentation, and make sure that procedures
are followed very clearly." - TODAY/ra
