Horizon Towers en bloc sale

The hearing on the disputed Horizon Towers en bloc sale has been brought forward to next month, thus averting fears that the $500 million deal could be derailed by a closure deadline.

Collective sale agreements have to be closed within six months of being signed or go back to the sales committee - a potentially divisive procedure that can kill a sale.

That gave Horizon Towers - its deal was agreed on Feb 12 - a cut- off date of Aug 11. But that raised a serious problem for the sellers as the dispute hearing was not scheduled to be held until September.

But The Straits Times learnt yesterday from a reliable source that the Strata Titles Board had rescheduled the hearing for five days, starting on July 26.

The two blocks at Leonie Hill have been pledged to be sold en bloc for $500 million to Hotel Properties (HPL), Morgan Stanley Real Estate and Qatar Investment Authority, the investment arm of the Emirate of Qatar.

The deal won backing from 84 per cent of the owners - exceeding the 80 per cent requirement - but it still needs approval from the Strata Titles Board.

Since that initial agreement, eight owners have objected to the sale. Efforts by the board to broker a compromise have come to nought, so a full hearing has been called.

It is understood that the dissenters object in principle to procedures leading up to the sale and not to the actual price offered.

But their sentiments are shared by several other unit owners who initially consented to the sale but are now unhappy over the price.

They point to the recent property boom that has seen the neighbouring Grangeford Apartments, which is five years older than Horizon, going for an asking price of more than $2,000 per sq ft (psf).

This dwarfs the $800 psf agreed for Horizon Towers.

The mood now is in stark contrast to the rejoicing late last year, when the owners were jubilant at the price the 23-year-old Horizon Towers had fetched.

Most owners in the 199 apartments in the 210-unit estate would walk out with about $2.3 million, while owners of the 11 penthouses would reap $4 million or more.

If the deal fails to meet the Aug 11 deadline, the initial deposit advanced to the sellers would have to be returned but it is unclear if they would face any liabilities if the sale does not go through.

Senior Counsel Jimmy Yim of Drew & Napier, who is acting for the sellers, said yesterday: ‘This is not a straightforward situation.’

He declined to comment on what would happen if the sale is aborted.

On Monday, more than 100 residents attended an extraordinary general meeting that sought to replace the existing sales committee.

Senior Counsel C.R. Rajah of Tan, Rajah and Cheah, who is acting for several owners, said they had a right to convene the meeting and decide who should represent them. But he stressed that the meeting had nothing to do with calling off the contract to sell the property.

One resident suggested that the existing committee resign en masse to enable others to be appointed. Another expressed concern over legal costs if the move triggered legal action by the buyers.

‘I would prefer not to be sued and I would want my money faster,’ said one resident.

Another resident feared that a new sales committee could raise legal questions and add to the general uncertainty over whom residents had to deal with.

Former Nominated Member of Parliament and senior lawyer Shriniwas Rai, who is representing a client-owner, proposed that the meeting be adjourned for six weeks to allow the differing parties to resolve the matter amicably. The suggestion was taken up by residents.

Senior Counsel K.Shanmugam of Allen & Gledhill, who is acting for HPL, said when contacted yesterday: ‘There is a contract and we are expecting the contract to be fulfilled.’

Source: The Straits Times, 20 June 2007