Shunfu Ville | Shunfu HUDC Privatization Home

We have received a couple of questions concerning the legality of our privatization process, below is the reply from our lawyer :

15 April 2008

Dear All

PRIVATISATION OF SHUNFU HUDC ESTATE

To question the legality of the privatization process is to question the legality of the legislation providing for the privatization process i.e our Land Titles (Strata) Act.

It is every home owner’s right to be able to upgrade his title deeds i.e privatization is his application to replace the home owner’s HDB lease (his title deeds) with a superior title deed i.e private property title deeds i.e Subsidiary Strata Certificate of Title.

If the resident dare go so far as to accuse the Protem Committee of carrying out illegal acts then that is defamatory and the Protem Committee members have a right to sue the resident concerned for the injury to the Protem Committee’s reputation.

The Protem Committee are hardworking volunteers doing a public service for their neighboring residents i.e assisting in asset enhancement.

It is unfortunate if the minority of the residents for their own private agenda tries to damage the Protem efforts and injure their reputation.

Anyway, as the requisite 75% consent has been obtained, the efforts of these minority owners to put the clock back are obviously futile.

Best regards

Carolyn Tan/Tony Au

TAN & AU LLP

Below is a reply on the Privatization Duration from our lawyers :

“The basic issue is the nature of the exercise.

Explain to residents that the exercise is not an election or a meeting whereby there is an outcome after the conclusion of the said election or meeting.

The exercise is a conveyancing process whereby the flat lessees are applying for replacement title deeds to replace their current HDB leases.

Replacement of title deeds may be compulsory e.g where our Land Authority converts the title under the old Registry of Deeds to the modern Register under our Land Titles Act.

Even the original enbloc sale statutory provisions had no time limit for the owners to sign the Collective Sale Agreement which is the position at general common (non-statute) law.

It took an amending Act of Parliament to set a time limit between the first and last 80% of the owners who sign the Collective Sale Agreement.

Also, neighbors still keep their roof after privatization. In fact, they will have and hold a superior title deed i.e private property SSCT to replace their HDB lease! ” – TAN & AU LLP

Questions from a fellow resident :

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1. For Question: 5 above (Privatization FAQs) I notice the answer is clearly evasive; no definite

$$ figures have been given. This is a serious point of concern. Please

commit the lower and upper range of $$ values for maintenance fee for our

estate; do not quote how low it costs for XYZ estate etc; it is meaningless

unless that estate is 100% same as Shunfu , which we all know it is

impossible.

Answer:

We are not being evasive. I guess your concerns are that if we are successful in the privatization exercise but not enbloc per se what would be the revised maintenance fee we need to pay etc. The cost will depend on the new elected Management

Committee and the aspirations of the residents of the estate. The reason is because upon privatization Bishan Toa Payoh Town Council will transfer the balance of existing sinking and operation funds unused to the newly formed MCST Management Committee once we finalized our privatization exercise (it will take approx 18 months to complete). Basically, our pro-tem committee for privatization will be dissolved and a new MCST Management Committee will be formed and an election amongst residents fpr the newly formed MCST will be formed at the AGM to run the newly privatized Shunfu Ville-HUDC estates by appointing qualified managing agent like Emansco (BSTC)/Knight Frank/United Premas etc. This has proven successful for the other privatized estates like Braddell/Lakeview/Farrer Court. For example if residents want full facilities like swimming pool, tennis court, squash court, barbeque pits, gym then the maintenance cost of curse be higher that another estates with no such facilities. Thus we are not able to give exact figures except to draw example of maintenance cost from other existing HUDC estates which have already been privatized and had different facilities. In summary, our estates is still considered a HDB controlled area and run by Bishan Toa Payoh Town Council with its managing agent like Emansco. Presently, the standard of maintenance is not really up to the mark and has room for improvement. Outsiders tend to come and sit at our void decks and dirty the place. Cleaning work is not able to keep pace with the problem. Some residents and particularly maids tend to contribute to the problem(eg dogs urinating etc). Privatization would help to solve these routine issues happening in our estates and thereafter residents should review the standard of maintenance we desire and the price that we are willing to pay for such a service. It will have to be a collective solution with participation from all residents.

2. Why some pro-tem committee members are conducting fear-mongering exercise;

i.e they keep telling residents that if Shunfu is not privatised, HDB will

take over and well will loose lot of $$$. In the real world of course this

is possible and also ALL other things one can imagine are also possible.

But to instill the fear of HDB buy back of Shunfu is unethical and unfounded

as of today. They should stop this immediately.

Answer:

We have informed all our members that HDB encourages all HUDC estate to go

for privatization. The fact is clear we have no choice, we need to privatize regardless whether we want to enbloc or against it. HDB intention is to encourage all HUDC units to privatize – we are the last batch of HUDC Phase 3 & 4 which has yet to be privatized. Other HUDC estates has already been privatized and/or enbloc. HDB will not do any SER as briefed by them. If we put on status quote then we are will come to a standstill. If we don’t get it privatized and let it continues to run as it then will be an estates which will decline in values and depreciates progressively as our units already coming to 25 years old by the times we privatized our estates. We will be at a standstill compared with other privatized estates.

Let us reiterate, we want to be proactive, we all have a stake in it too.

3. Any voting in the world is for a day i.e only one day for a location.

Why for this privatization exercise it stretches

into as many days as required to get the “desired results”?

This is totally unacceptable and all the votes received after that specific

date should be declared null and void and not to be counted.

Answer:

We reckon, you have mixed up with the statutory election whereby voting is compulsory and the law provided it to be so.

Whereas the mass signing for privatization there is no time span as provided by the law. It is clear that we can proceed to garner till we reach the 75% mandatory requirement for the privatization exercise to take place. The HDB encourages us to privatize to unlock our assets. As you may not be aware there are owners who are overseas, did not receive our notification for one reason or another and owners who cannot make it for the two(2) exercise we have set for them to sign. These are just some of the many reasons so that we given more times to garner for the 75% votes for privatization.

The Government intention is clear to us: HUDC needs to be privatized as a form of asset enhancement for the residents (middle income group) . Once the estates is privatized we are given a free hand to run our own private estates similar to Braddell Height/Lake View/ Farrer Court etc.

Have you sign yet. If not, please arrange to come down on these dates :

Date & Time: i) Thursday, 13th March 2008 from 7.30pm to 9.30pm (two

hours)

ii) Sunday, 16th March 2008 from 2.00pm to 4.00pm

(two hours)

Place: At the concrete table of Void Deck 316

Dear fellow resident, we understand that you are concern because you love staying in the estate. All of us share the same view. We would like to see our estate privatised and be exclusive for ourselves and our children. You need to come forward and be counted by first voting for privatisation and when
the estate is privatised, standing up and be elected into the committee to help run the estate.

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Answers by KeeWah & Philip @ Shunfu Pro-tem Committee

Dear Philip Liau,

I really appreciate your great effort and time to make our Shunfu HUDC Estate to go private. I am here to support you and hopefully the rest of our committee members as well.

It is a good idea and also convenient for those residents who have not signed up to go to Thomson Community Centre bringing along their identity cards as the lawyers will be there on Friday, 7 March 2008.

Let’s work together as a team and try to garner more votes so that we are able to reach 80%.

Well done! Philip Liau, I really have to salute you!

Warmest regards,

Lawrence Low

Latest Update: 67% “Yes” Votes

Target: 75%

Next Signing Date / Time :

Our lawyers, Tan & Au has confirmed to come on the following date / time to witness your signing for the Privatization Exercise :

Date & Time: i) Thursday, 13^th March 2008 from 7.30pm to 9.30pm (two hours)

ii) Sunday, 16^th March 2008 from 2.00pm to 4.00pm (two hours)

Place: At the concrete table of Void Deck 316.

Looking forward to your Support!

Dear All,

We have received very strong support for this privatization exercise over the March 1st/2008 weekend. The preliminary figure we have received is around 65% for the “Yes” votes for just one weekend of signing exercise (subject to the final confirmation from our
Tan & Au). This is very encouraging compare to the previous exercise of 50.1% in 2001.

Thanks everyone for your strong support for this privatization drive. Our dream to Shunfu Ville Condo is now within reach !

Cheers!
Shunfu Ville Privatization Pro-Tem Team

Mass signing for Shunfu Ville Privatization
(Please bring original and photocopy of your NRIC for verification)

Venue: Blk 316 lobby
1st March 2008 (Saturday): 2 pm to 5pm
2nd March 2008 (Sunday): 11 am to 4pm

HDB, Town Council, Bankers, Real Estate Professionals will be on sites to answer your questions!

Be There!!

Hi Mr Goh

Thank you for your inputs to Tan & Au relating to subject. We noted your opposition to privatize and would like to clarify the following pointers for your further consideration:

1) En Bloc potential:

With the current en bloc fever “over” will there still be an en bloc potential?

Answer:

Enbloc wave usually comes about when the market is rising. The property market has been rather quiet lately due to the impending US recession. However, with the IR, F1 race and the Youth Olympics coming up, the Singapore’s market is expected to continue on an uptrend. The key is to take a pro-active stance and be ready for the next enbloc wave and not start to privatize the estate only when the enbloc fever is on. That means to say the privatization gives us the opportunity to consider the estate for enbloc when the fever comes back. It is a general knowledge in Singapore with population expected to increase and increasing business opportunities thereby increasing foreigners working here, general considerations will point to an increase in property and rental prices. Without privatization, the fever will come and go and the residents of Shunfu can only WATCH only.

2) Perceived increase value

Currently, there are flats going for S$700-S$800K at least. Is there any empirical evidence that the “value” will increase significantly?

Answer: No one can predict price movements but going from Lake View and Braddell view, prices are expected to go above S$950K upon privatization.. These two estates are the closest comparables in terms of location and units of similar size at Braddell View and Lake View are going for more than S$1m. while flats at Shunfu Ville are only transacted at about S$800K plus.

3) Residents who want to stay put.

For those who are contented in staying put, there is no advantage with the increased value – even if there was any. I would prefer a lower gearing, rather than tho refinance and gear up more and related to point 1 above as there are currently no competitive substitutes for our HUDC flats, I suspect that the enbloc will only benefit those intend to downgrade. The previously quoted S$1.15 mn cannot even afford me Braddel View of Lake View, the 2 closeset comparative as at this moment.

Answer: The purpose of an enbloc is to unlock your wealth. Without an enbloc, it is unlikely for the price of a HDB flat to fetch beyond S$1m. With the potential sale proceeds from the enbloc, residents who wish to upgrade can easily afford landed properties within the same vicinity. In another way to look at the situation no one wants to sell and not have a better place to stay than Shunfu. However, looking at the other end of this reasoning, we can review how the residents of Farrer Court must be celebrating with their S$2.5mn windfall. They can now upgrade to a S$1.5m terrace and have S$1m in cash.

4) Cash Flow

In addition to the unfront cash to be paid (which is quite a lot of money), there are added management costs to be borne monthly.

Answer: Once the estate is privatized, owners will not only hold ownership of their respective strata units but also ownership of all the common areas. Owners will become an integral part in the whole decision making process. The privatized estate will offer a host of amenities like guarded parking space, 24 security, clubhouse etc. The management fee contributed by owners is used to maintain such facilities and to ensure that the standards of maintenance and care are constantly addressed and improved. We must also note that without privatization, the residents of Shunfu are not receiving any subsidy from Town Council. We need to note that Town Council is managing our fund using our sinking as well as operations funds for the upgrading projects like rewiring and painting to name few in the estates. We like to emphasize there will not be upfront cash, but cash payable only 18 month (estimated) after 75% residents has cast their votes in favor for privatization.

Mr Goh, we hope that the above pointers would help to clarify any doubts you may have. I must emphasize that HDB authority has made it very clear to us that we need to privatize our estates in order to enhance our HUDC assets. There is no other way if we insist not to privatize and still get the value of our estates to be enhanced. The choice is ours. We need to take a step forward and say “yes” we want to privatize to enhance our Shunfu Ville –HUDC estates.

You can refer to our Shunfu Ville-HUDC web-site for any additional comments you would like to share at: http://xuko.com/shunfu or call the undersigned at 97482102 for any clarification you may need.

Have a good day!!!

Philip

(Note: see Philip’s replies in italic) 

Hi Philip,
I have some queries on this privatization exercise:

1) Since our privatization are done mainly for the enbloc sale, is that a must to spend $4000/resident for the fencing?
Can’t we do without the fencing to bring down the cost of privatization?
(We have spoken to HDB-Mrs Ong on this particular point and she specifically mentioned and highlighted to us this is the requirement to get the requirements done before the authority will issue the privatization title to us. There is no exception they want to ensure this is done in accordance to the current legal requirement irrespective whether you are in the process of privatization. The fact is privatization will take at 1-11/2 years to complete, therefore this has to be done.) – Noted.

2) What is the monthly maintenance fee that each resident have to pay after privatization?
(The fact is that maintenance fee will be the same as I reckon as the sinking fund of the existing BTPTC will direct it the balance to MCST Shunfu HUDC account whereby we can appoint any of the Knight Frank or whoever as the managing agent for the privatized estates. The management fees can be negotiated with the respective managing agents by the new management committee to be elected amongst the existing residents.)-What do you mean will be the same? How much?

3) How you and your team come out plan or loan package to help those that don’t have sufficient cash and CPF especially those retired.
(Our pro-tem committee will invite a few banks who will provide competitive rates for the residents to choose. Currently we can enlist either UOB or Chartered Bank whom some of committee members would be looking into it for the residents toevaluate)-Thank you.

4) Lastly, is there any talk/briefing before the privatization exercise?
 (We have deliberated and from the HDB point of view it would be futile as Shunfu HUDC estates residents are more familiar than the other HUDC estates. According to her we had held the most dialogues and briefing on the privatization exercise since 2001 we initiated the first. Our pro-tem committee has also deliberated and in concurrence to proceed as the few dialogues held with the current MP, Mr Hri Kumar with the residents has indicated we need to proceed. We have set an website entitled http://shunfu.xuko.com  where residents of Shunfu HUDC can go in to discuss or raise any topics for their information.)  – Sorry I just purchased this unit two year ago and are not familiar with privatization.

Last but not least we are open to any suggestion that will help us to have a higher percentage of votes in the privatization exercise. It is now very clear upfront that if you don’t privatize than the HDB could not help the residents to enhance the value of the estates as it is the government intention to benefit this asset enhancement for HUDC residents in general. WE have tried and seek for the HDB/authorities to waive the privatization and even to the extent to hold simultaneously but this was rejected despite the higher-up intervention to get it done.- I will vote for the privatization excerise.
In view of the above current situation, if we keep on having dialogues with our HUDC residents and many times we received brickbats from a few outspoken and majority of the residents are silent, it will cut down all the enthusiasm our pro-tem committee members would try to avoid.

I think this is important as most of us will want to have a better understanding before we support this exercise.
Thank you.

Regards
L.Ang