No Go For Horizon Towers En Bloc Sale

Source : The Straits Times, 4 Aug 2007

Move taken because the correct sale procedures were not followed, says STB

The Strata Titles Board (STB) axed the contentious collective sale of Horizon Towers yesterday after months of bitter wrangling between neighbours and lawyers.

The surprise move - it is the first such decision in seven years - cheered the condominium’s unhappy sellers, who have been complaining about a neighbouring estate fetching a higher price due to the property boom.

But it was technicalities, not money or the validity of the minority owners’ claim, that finally decided the case.

The STB told a room packed with residents, lawyers and onlookers that the sale was stopped because correct procedures were not followed.

The decision, after a week-long hearing, was the latest step in a battle watched closely by collective sale parties and property owners elsewhere amid the escalating en-bloc frenzy and rising unhappiness among minority owners forced to sell.

Horizon Towers was pledged to be sold to developer Hotel Properties (HPL) and a Middle Eastern fund in January for $500 million. At the time, it was the biggest collective sale in dollar terms.

But The Grangeford next door went en bloc a few months later at a far higher asking price per square foot (psf). It was eventually sold on Thursday, just two days ago - for double the Horizon Towers’ psf price.

The Grangeford asking price prompted unhappy Horizon Towers residents to band together to reverse their sale, in the process inspiring a growing group of minority owners in other condos disgruntled with the record wave of collective sales.

Even those who signed the original Horizon sales deal ended up backing the minority owners in their bid to unwind the sale.

Some residents cheered the decision. One who declined to be named but had signed the sale deal said: ‘It’s good we’ve brought things back to square one. This time around, hopefully, we can get a fairer deal relative to what’s going on in the market.’

But this may not be the end of the road yet.

HPL said in a statement yesterday that it is now ‘considering the STB’s decision and reserves all its rights’, including against the sales committee and the owners who signed the sale agreement.

Property watchers called the STB’s decision ’significant’.

‘On the basis of price, I felt the sale would go through,’ said Mr Jeremy Lake, executive director of investment properties at CB Richard Ellis. ‘Clearly, people will now look carefully at STB’s reasons to ensure that other projects don’t repeat them.’

Horizon Towers is not the first condo to have its collective sale bid turned down.

In 2000, Mandalay Court and Grenville Condominium faced similar rejections, also on technicalities. But in both cases, the majority owners ironed out the glitches and succeeded on the second try.

But Horizon Towers may not be so lucky. The deadline for owners to obtain the sale order is next Saturday, and without the order or an extension of the deadline, the deal will be off.

While the STB said the rejection was based on technicalities, it did not specify which ones. But sources told The Straits Times that cases of irregularities were presented by the objecting lawyers.

These included a notice put up on July 11 last year saying that owners with 80.81 per cent of share values in Horizon Towers had signed the sale agreement. A sale needs 80 per cent consensus. But only 79 per cent had agreed to the sale at that time, lawyers said.