SINGAPORE has seen several ugly en bloc tussles but this is a first. The majority owners, having agreed to sell their condominium, are now suing the buyers.
A group of 25 at the 31-unit Regent Garden is alleging that developer Allgreen Properties has breached the sale and purchase agreement by grossly undervaluing the condominium.
The owners filed a claim last Monday with the High Court to declare that they are no longer bound by the agreement, which saw the condominium sold for $34 million last April.
On Friday, Allgreen struck back. It announced that it will “vigorously contest this action and the claims and allegations made by the majority vendors”, and has applied for a court order to force the majority owners to complete the transaction.
According to court documents obtained by Today, the dispute centres on two issues. The majority owners, represented by Senior Counsel Molly Lim, allege that Allgreen had overstated the development charge by more than $6 million, thereby depressing the sale price by that sum.
They also claim the developer gave “disproportionately high” proceeds to the six erstwhile minority owners to secure full consent. The latter have since agreed to the sale and have applied to withdraw their objections, set to be heard Jan 30 by the Strata Titles Board (STB).
Now it is the majority owners who want to be heard by the STB, which an experienced en bloc lawyer, who declined to be named, said puts the STB in an “interesting” position.
The law now gives STB power to hear all objections, but the Regent agreement was signed before the legislative change.
According to Knight Frank managing director Tan Tiong Cheng, he has “never come across a case where the majority owners sought to rely on the fluctuation in the development baseline gross floor area to renege on their agreement with the developer”.
“It is also my experience that it is not uncommon for the developer to contribute to the payment of a premium to minority owners in order to procure their consent to the collective sale,” he said in a court document.
Bernard and Rada Law Corporation associate director M Kumaran, who oversees his firm’s en bloc cases, said the majority owners would have a case if the buyers had misrepresented the development charges.
“This sort of matter has been taken up to court but not in the context of en bloc sales,” he said.
Source : Weekend Today - 19 Jan 2008