No Sale For Horizon Towers

Source : Today, Weekend, August 4, 2007

Authorities dismiss en bloc application because of 'technical irregularities'

A DISPUTE over the $500-million en bloc sale of Horizon Towers has ended with the authorities dismissing the application to approve the sale on "technical grounds".

In rejecting the application on Friday, the Strata Titles Board (STB) accepted the argument put forward by the minority owners that there were technical irregularities in processing the Collective Sale Agreement (CSA), signed in February.

Lawyers involved in the case say this ruling stands out for the sum of money at stake — the biggest deal to be dismissed by the STB on technical grounds.

"This case is not a precedent in the legal sense; there have been other cases in the past where dismissals were made on technical grounds," said lawyer Dr S K Phang, who represented a group of residents opposed to the Horizon Towers sale.

"But it is significant because of the large sum of money involved."

"The STB emphasised that this decision was made on technical grounds and not on substantive issues," he added.

Lawyer Kannan Ramesh of Tan Kok Quan Partnership, who represented another group of objectors, echoed the same sentiment.

"The facts of this case were unique and the irregularities raised held valid by the STB," he said.

However, Mr Jimmy Yim of Drew and Napier, who handled the sale for the sellers, expressed surprise over the decision.

"The decision seems to have been based on a very simple technicality," he said.

"I hope they give a written judgement."

The dispute began early this year, when about 84 per cent of the flat owners signed the agreement to sell Horizon Towers to joint buyers Hotel Properties Limited, Morgan Stanley Real Estate and Qatar Investment Authority for $500 million.

This met the legal requirement of having more than 80 per cent of owners agreeing to a sale in the case of properties more than 10 years old.

Under the agreement, the 199 apartment owners would have pocketed about $2.3 million each and the 11 penthouse owners would have received at least $4 million each.

However, some minority owners raised objections to the sale, protesting that they were unhappy with the sales committee's performance and irregularities in the procedures leading to the sale.

As en bloc sale prices skyrocketed, owners who had originally consented to the deal joined in the dissenting voices, pointing out that the $500-million deal no longer reflected the condominium's "true value".

For example, Grangeford Apartments, a neighbouring development five years older, commanded an asking price of more than $2,000 per square foot (psf), compared to Horizon's $800 psf.

Given that the application to grant the sale has been dismissed, Mr Ramesh said owners can most likely expect prices to be more reflective of current market rates in future en bloc deals. Authorities dismiss en bloc application because of 'technical irregularities'