Monday, January 7, 2008

Our 1st newsletter

Dear Neighbours,

We are a group of concern Ocean Park owners, we would like to share with you some of the information we have gathered and hopefully you would also be able to make an informed decision.

If you would like to get in touch with us, you can find us at:

www.oceanparksingapore.blogspot.com

you may also get in touch with us at this email:

oceanparkfriend@yahoo.com

We would very much like to hear from you.


Q1: Why are some so keen to sell Ocean Park?

A: Owners have many reasons and all are valid. We think some of them wish to cash out. If they were to sell privately today, the typical unit can fetch about $2.5 million. If they sell enbloc, they may fetch a higher price. Unfortunately, enbloc sale forces all owners to sell as well. So if you wish to sell in 7 years time for example, you have lost that flexibility.

Owners cash out for various reasons. Some have other properties and no longer wish to keep Ocean Park for rental or investment. Some are emigrating and have no need for the property. Others are downgrading and may wish to live in a HDB flat and keep the money in the bank. Yet others are retiring or retired and need the money.

Q2: If I don’t sell now, won’t I lose the “opportunity”?

A: Despite all the negative talk about owners wanting to stay purely for sentimental reasons, some of us think Ocean Park is a great investment. Look around the East Coast area. Have you found any condos with a freehold land size as big as ours? No tall buildings within 300 metres? Look at the dozen of heavily built-up condos around Parkway Parade and you would realize the potential of Ocean Park.

Another point: the Government has announced that it intends to bring the population up to 6.5 million in the next 2 decades. Of course this will be a gradual process. But along the way, demand for property – good property – will go up. Right now our land has a PLOT RATIO of 2.8. (originally was built with 2.1). This means the developer can build 2.8 sq ft of living space for every 1 sq ft of land. The higher the plot ratio means the higher the development potential of the land.

With a growing population and the untapped potential of the East Coast area, the plot ratio is likely to increase in the future. It could potentially rise to 3.2 to 3.5. This is a 14%-25% jump in saleable space for the developer. This means the developer can build more floors and more blocks on our land. Hence the value will likely to go up in future on top of the increase due to inflation.

Q3: If the potential of Ocean Park is so great, why aren’t we fetching $4.5 million for the typical unit?

A: The answer is that the PLOT RATIO has not gone up yet. We think that it could take 5-8 years for the plot ratio to go up.

Q4: Isn’t Ocean Park too old and maintenance too expensive if we continue to keep it?

A: Singapore is probably the only place around that tears down relatively new buildings (20-30 year range) for no other reason than an enbloc sale. Conceivably, the only valid reason is to build more apartments to house more people and if so, we are back to the issue of PLOT RATIO.

As far as maintenance fee goes, our fee of around $300/month is relatively low considering we have full condominium facilities and are well-maintained. You can check with your friends living in other condominiums. Some owners complain about water leakages and other minor irritants which can be fixed - it makes no sense to sell an apartment because of a minor problem. Even new condominiums are not immune. There have been horror stories from friends and in the press from time to time.

Q5: If I am forced to sell, can I find equal replacement?

A: Not that we are aware of. The CSA offers the typical unit about $1,600 per sq ft. Most new freehold condo launches in the vicinity we know of are above that value. Moreover, it could take 18-24 months before we receive the proceeds if the enbloc sale is successful and by which time, prices could have risen further.

Q6: If I cannot find an equal replacement, won’t the system be unfair to me?

A: Yes, if 80% of the owners decide to sell, you are also committed.

Q7: What must I do to protect my investment?

A: You should be aware of the rules governing enbloc sale and your rights. More importantly, you should ensure your fellow owners are also aware of every issue of enbloc sale. Attend General Meetings and seek alternative views and then you can weigh the pros and cons.

Q8: Isn’t it a “done deal” the moment the Sale Committee is formed?

A: This is a misconception of many people. The formation of the Sale Committee is a means for those keen to sell to offer their proposal. If less than 80% sign up within a year, the proposal is off.

Q9: I don’t intend to sell. But just in case, should I start buying another property?

A: This is a business decision you have to make. Some may start looking for another property, or even committing to another property. But do be aware that the property you buy may require full payment within 3 months (in the case of existing property) or 1-2 years (for property under development). You would not normally get the money from the enbloc sale of Ocean Park for 18-24 months or even longer if there are complications. So you must ensure sufficient personal funds or bank loans to cover your purchase.

There is also the possibility that the enbloc sale may not succeed. So if you had committed to another property to be funded from the sale of your Ocean Park unit, you might find yourself in a difficult situation.

Q10: I intend to sell. What are the risks involved?

A: ** Read your CSA carefully, and question the solicitors, who drafted the document to explain all the provisions which you are in doubt, they are paid to do that.

IN particular, be thoroughly clear and understand your liabilities in Clause 12 pertaining to powers and immunity of SC, especially cl.12.6 and cl.12.8.1 –where sellers have to indemnify the SC and STB representatives against loss and damage, cost and expenses as they may suffer in respect of the sale…a provision that is vital in the light of the Horizon Tower case. This indemnity could theoretically subject you to an unknown and unquantifiable sum of legal cost, expenses which the SC and STB representatives might be exposed to in fighting objectors.

Q11: I intend to sell. Can I change the terms of the Collective Sale Agreement (CSA)?

A: No you cannot. That is why every owner must express his view at the General Meetings. Even if your views are not accepted, you should ask for it to be recorded.

Q12: If I sign the CSA, and then changed my mind, what must I do?

A: Pursuant to Clause 4 “Cooling Off” in the CSA and pursuant to the First Schedule of the LTSA, you can change your mind and serve a notice on the solicitors within 5 days (excluding Saturday, Sunday or public holidays) after you have signed the agreement.

Q13: What is the basis of the apportionment of the sale proceeds?

A: In short, how should the owners share the money from the sale of Ocean Park? There are many ways to do this. The Sale Committee explained that they have used valuation by 2 independent valuers. They have sorted Ocean Park into X categories of units and sought valuation on each category. This is a better decision than using share values or floor areas.

However, some residents questioned at the 8 December 2007 General Meeting why floor level and orientation/facing was not considered under each category. This is a very standard practice when developers sell new condos. The higher the floor, the better the orientation/facing, the higher the price. However, the Sale Committee explained that it is too complicated and costly.

Given the current apportionment method used by the Sale Committee, some owners will unlikely be able to find replacement units of similar characteristics using the enbloc proceeds.

** FOR THOSE WHO WISH TO EDUCATE THEMSELVES FURTHER ON THE PROS AND CONS AND THE MORE INTRICATE POINTS OF VIEWS THAT ENBLOC SALE HAS RAISED, DO CHECK THIS BLOG:

www.enblocsingapore.blogspot.com

4 comments:

Chap said...
This comment has been removed by the author.
Chap said...

What is the stand of Ocean Park Anti-Enbloc?

It appears that you are proposing Ocean Park should go en bloc only after plot ratio of Ocean Park is increased in the next review. So you are not entirely anti-enbloc. What if there is no increase in plot ratio in the next review and the property price remains at current level in the next 5-8 years? Will you support Ocean Park en bloc then?

numerox said...

Hi Neighbours.
Have been away for the festivities and just been back a week ago.I am wondering what has become from the recent meetings.I do hope the collective sale isn't successful and that we would be staying longer here at OP.
Looking to your update
thanks very much

Ocean Park Anti-enbloc said...

Hi Numerox,

We are glad to hear that we have another supporter. There were only a handful of signatures during the last few signing sessions. As per our estimate, it should be only around 30% signed.

Is it possible for us to contact you directly? Please drop us an email.