PUBLISHED THU, JUN 28, 2018
THE owners of Goodluck Garden condominium will soon head to court to settle the fate of its collective sale after the Strata Titles Board (STB) issued a stop order on Wednesday afternoon.
Objections by seven minority owners were not withdrawn following what Business Times understands was two rounds of mediation by STB, with the first taking place on June 1 and the second on June 19.
The board will be have 14 days to apply in High court for the approval sales of the en bloc application and the collective sale committee (CSC).
The 210-unit freehold residential development along Toh Tuck Road was sold to Qingjian Group in early March for S$610 million, above the reserve price of S$550 million when the tender launched. This was also a 12.5 per cent premium over what BT understands to be a S$542 million valuation at the close of tender.
It is the fifth largest collective sale this year and Goodluck Garden’s first collective sale attempt. As at the close of tender on March 7, owners making up 81.93 per cent of the total strata area and 81.35 per cent of the total share value had consented to the collective sale.
Perennial Real Estate Holdings also announced a 40-60 joint venture in April with Qingjian to redevelop the site.
In an en bloc sale, after a buyer is found, an application can be made to the STB which will decide if the sale can go through, but dissenting owners can still raise their objections.
The STB mediates matters in dispute for a maximum of 60 days. If the dispute cannot be resolved and objections are not withdrawn, the stop order is meant to discontinue mediation, and the matter is turned over to the High Court.
Rajah & Tann represents the CSC, while TSMP Law Corporation represents the objectors.
According to the sale and purchase agreement with Qingjian, the CSC must apply to the High Court to overturn the stop order and obtain a sale order within five months from the date of the stop order.
In the event the timeline is breached, Qingjian has the option to extend it, or abort the sale, QingJian would be able to take back its deposit.
The Goodluck Garden case comes after another en bloc sale dispute involving Qingjian Group. Qingjian Realty bought the former 358-unit Shunfu Ville in its first collective sale purchase for S$638 million in May 2016, but five unit owners objected to the sale.
The High Court gave the sale a direction in January 2017, and an appeal by objectors was dismissed in May 2017. Owners only leave the premises early this year and the launch of the new development JadeScape this year.
Other past high-profile en bloc disputes include that of Horizon Towers, Thomson View and Gilstead Court.
Executive director of ZACD Group Nicholas Mak said: “On a big picture level, this won’t dampen developers’ appetite.”
But it does mean a “wake-up call” for developers, property agents and CSCs that the path to getting proceeds after a buyer is found is not always straightforward. Ku Swee Yong, the chief executive of International Property Advisor, said developers may become “more careful in their due diligence of the en bloc sites offered to them for consideration.”