Restrict Frequency Of Costly En Bloc EGMs

Source : The Straits Times, Feb 21, 2008

Each meeting costs $15,000; depletes management funds

THE process of calling for extraordinary general meetings (EGMs) for the purpose of an en bloc sale can be abused because of a legislative loophole.

Over the past five months, three such costly meetings have been held in my condominium estate, Bayshore Park, in a bid to form a collective sales committee.

The first, which was held on Sept 29 last year, was void because it did not follow the new law for collective sales. At that time, the pro-tem sales committee did not heed the prudent advice to wait for the new law which was about to be enforced. The committee went ahead and held the EGM under the old law. As a result, almost $15,000 of our management and sinking funds was spent wastefully.

The second meeting, on Jan 12 this year, was cancelled as a quorum in share value could not be reached on time. Again, $15,000 more from our funds was expended.

To my dismay, a request for a third meeting was submitted to the Management Committee four days after the second was cancelled. The third meeting is now scheduled to be held on Saturday. Guess what: We will have to use $15,000 more from the funds to organise the meeting.

I do not know if this meeting will succeed. But I am quite certain that if it fails, yet another attempt will be made to hold a fourth, draining even more money from our fund.

Under the current law, there are no restrictions on the frequency with which such meetings for the appointment of a collective sales committee can be requested. As a result, residents of condominiums like mine are exposed to a virtually endless stream of EGM requests. These threaten to deplete a condominium's management and sinking funds.

Private estates like Bayshore Park need help from the Government and the Strata Titles Board to regulate the frequency of requests for such meetings in the bid by some to form a sales committee.

Please set a reasonable guideline for the frequency with which these meetings can be called.

I understand that laws for en bloc sales must remain flexible to allow property owners to take advantage of the opportunities that may arise in the property market. But the property market doesn't change as dramatically as the frequency with which such meetings were called in my estate.

I hope the Strata Titles Board will address this legislative loophole, to protect our management and sinking funds, and prevent the deterioration of the maintenance and value of our homes.

Mona Liew Tan Lee (Mdm)