Pitfall No. 1: The MC

Slowly, slowly, I will try and work through some of the possible pitfalls in an enbloc sale. Having been through an en bloc from conception to failure at the STB over the course of 30 months, I will attempt to predict some of the mistakes people might make along the way. I say predict because Tampines Court underwent it's roller coaster ride under the old rules, so my experience is already outdated, though some pointers do remain pertinent (eg Pitfall no 1). My advice is pure guesswork borne by an innate scepticism and an all round bad en bloc experience.

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Mistake: Electing a pro-enbloc management council (MC) to run the estate.

The Management Council (MC) is elected by the SPs at each and every AGM to manage estate affairs over the following year. The role of the MC is governed by rules set out in the Building Maintenance and Strata Management Act (BMSMA) found here Cap N0 30C

The MC does not manage en bloc matters but will hold EOGMs if requisitioned by 20% of subsidiary proprietors (by share value). The MC should be a neutral party in en bloc as their mandate is to look after the estate for all SPs and not facilitate en bloc for a an interested group.

One reason why the pro-en bloc camp always rush to man the management committee is the power it holds over the EOGMs. All en bloc EOGMS must be convened by the MC and it is the Secretary of the MC who must be satisified that all the necessary conditions of holding an EOGM under the BMSM Act are met. Also, it is the Chairman of the MC who chairs the meeting and ensures that it is conducted in a fair and impartial manner..The MC is routinely informed by the sale committee on the progress of the en bloc and these updates should be reflected fully in the minutes of the MC monthly meetings. Too often a single line is inserted "the managemnt council was updated on the progress of the en bloc" but fails to mention anything that transpired. A proper MC would ask pertinant questions, questions all SPs would want to know the answer to, and relay the information in full to all owners. The MC can go a long way in demanding transparancy.

The government has until now, registered owners' concerns on these matters but has remained unmoved. The LTSA rules do not ban pro-enbloc owners or even SC members themselves from serving on the MC, even though they are committees with opposing mandates. So it rests on the residents themselves to cover all the bases.

Laguna Park en bloc spat

If ever there was proof that a pro-en bloc management council is always bad news for the health of an estate, then you need look no further than Laguna Park. This recently privatised ex-HUDC estate, with a much coveted sea-view, has been in the news more than once in the past few months. With the deadline for collecting their 80% drawing near; intimidation and petty crime ratcheted up a notch, and when the culprit was eventually caught on camera, it was almost laughable that it turned out to be the Chairman of the MCST. Unbelievable but true. Fodder for a new en bloc TV series...

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Time and time again, estates are left to slowly deteriorate, ticking over on minimum maintenance whilst the estate runs it's mad 2 year race for riches. With an almost 100% success rate at the STB and High Court, pro- en bloc councils are confident that their negligence in maintaining the estate will not be challenged, no one will care except the few poor minority souls who have to live there until the last day. They will be lauded by many for not squandering money unnecessarily. Many owners will stop paying their monthly maintenance fees, and the council blithely wiles away the days until the STB approves the sale. No need for monthly meetings, they feel, who cares anyway, no need for 12, just 4 will do fine. Security lax? Cameras not working? Cleaning not up to par? Never mind, lah.

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But the estate may not get approval at the STB and beyond. What then?

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Estates must wake up to this danger early and ensure that the council is peopled by responsible residents who understand the importance of keeping estate matters and en bloc matters separate. There is no guarantee in life that a sale will be automatically approved and a MC that takes the view that it is merely a caretaker of a dying estate can do great damage.

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1. Pro-en bloc committees have been known to:
2. Intentionally run the estate down
3. Decrease maintenance fees and sinking fund contributions
4. Increase maintenance fees/sinking fund contributions to pressure owners to sign
5. Forgo holding monthly meetings
6. Engage sub-standard contractors to do minimum maintenance
7. Exaggerate defects in the estate
8. Overestimate cost of repairs
9. Publish and distribute pro-en bloc material

There is a misconception that a minority MC would 'spend money like water' or 'deplete the sinking fund'. This is impossible as any dipping into the sinking fund, other than for dire emergencies, can only be done by resolutions passed by SPs at an AGM/EOGM. The MC cannot spend money that has not been earmarked by SPs for an express purpose under BMSM rules

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Walk the en bloc path if you must, but take care of your homes and look after the estate in the meantime. The people best suited to this task are those who are cautious in their outlook and who aren't out to purposely run the place down. Your best bet would be to choose minority owners or fence sitters to sit on the MC.

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Your estate is your best asset, and only fools destroy what they own.

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