#Civil Rights
Legislature, Parliament

An "enbloc" is a collective sale of a property such as condominium, apartments, flats. Using this news article below as example about an enbloc sale which has caused a messy court case because of the use of 'penalty clauses' to penalise Objecting Owners up to $26,000 plus extra contributions, we are very horrified that this is happening in Singapore. Please read the news article below, and then the petition:

New row over Gilstead collective sale (Source: The Straits Times –10 October 2013)

The fractious collective sale of Gilstead Court has hit more trouble with a breakaway group from the sales committee asking the High Court to remove financial penalties aimed at minority owners.

Four members of the seven-man committee, including treasurer Choo Liang Haw, filed documents with the court on Monday, escalating what has already been one of the most fractious collective sales in years.

The dispute centres on penalty clauses the collective sale agreement had imposed on the five dissenting owners at the estate in Newton.

These clauses could cost the five owners up to $26,000 each, a prospect that led them to file an objection with the Strata Titles Board (STB).

This triggered mandatory mediation but that failed last month after the sales committee could not agree to remove the clauses from the sales agreement.

That prompted the board to place a stop order on the deal.

The sales committee now has to apply to the High Court to have the collective sale approved. The Straits Times understands that it has until Monday next week to do so.

The division among the committee that arose during the mediation process appears to have led to Monday's court application.

The clauses state that the 43 owners who consented to the collective sale should contribute $2,000 out of their own pocket to a common fund for procedures related to the sale effort.

This sum would be refunded with 12 per cent interest once the sale has been completed.

But the minority owners would have $4,000 deducted from their share of the sale proceeds and shared equally among the 43 consenting sellers.

Other clauses state that the minority owners will have to stump up costs related to the STB approval proceedings.

Typically, costs related to legal proceedings of a collective sale are borne by all owners.

An application to the STB is not needed if all owners consent to the transaction.

The 163-page document filed by the four committee members said that the minority owners had offered to sign the agreement in June as long as the penalising clauses were removed. This would have eliminated the need for an application to the board.

But their proposal was turned down by the committee secretary, former Supreme Court judge Warren Khoo, according to the court document.

Mr Khoo, who had drafted the sales agreement, told the minority owners by e-mail that the clauses were aimed at promoting the principle of equality in the sharing of benefits.

The court documents also stated that minority owners would have to fork out about $26,000 each, which would be distributed to the 43 sellers.

The four committee members want the court to remove the "offensive clauses" in their words, if the objecting owners sign the sales agreement.

Tuan Sing Holdings, the developer that successfully tendered for the site in June, has offered to pay up to $135,000 for legal fees and other related costs. The committee has yet to accept the offer.

Majority owners have also said that they are prepared to forgo any payments that could be claimed from minority owners.

When The Straits Times contacted a committee member who was not part of the High Court application, he declined to comment as he had not received a copy of the court documents.

Source: The Straits Times –10 October 2013

We the undersigned, call on the authorities to ban the use of Penalty Clauses in enbloc sale contracts which infringes upon the people's rights. We list the points below:

1) Home Owners in Singapore(or in any democratic country) should NOT be penalised for objecting to the sale of their homes in an enbloc.

2) Sale Committees should not be allowed to use "penalty clauses" in a sale contract because it infringes upon Home Owner's rights to object to the sale of their home.

3) Penalty clauses means if Home Owners oppose to an enbloc, they can face financial pain and loss. Owners have the right to say no to the sale of their home without being threatened with penalties, financial pain and/or unfair treatment by anybody. Nobody has the right to penalise us for our choice in a vote.

4) Penalty clauses can also mean the threat of penalty is "pressuring" home owners to consent to the sale thru enbloc, or else face the risk of financial loss (penalty). This means even if 80% vote is achieved, it may not actually done fairly because people are voting under a threat of penalty. We oppose to the use of 'penalty clauses' as a thinly disguised threat by Sale Committees to either achieve 80% consent to an enbloc sale, or to punish Owners who object to the sale. As such, with the presence of a penalty threat, Owners are unable to vote with a clear mind and can be pressured to consent to the sale just to avoid being hit by a hefty penalty. We oppose to the use of such tactics which infringes upon our right to choose freely without being punished with a penalty.

5) If any enbloc sale contract is approved by the Court to use such a penalty clause, then any Sale Committee in the future in the country can use the same penalty clause to easily push for 80% consent and punish any objectors. We see this as a unprofessional and threatening tactic that must be banned, because it is eroding our rights.

6) Consenting Owners and Non-consenting Owners should not be treated unequally if the sale goes through. Sale Committee cannot punish Non-consenting owners financially or ask them to fork out more contributions or be liable for legal fees. Such costs should be shared between all Owners if the sale goes through. We are opposed to such unequal treatments between Consenting Owners and Non-consenting Owners in Sale Contracts. This type of unfair treatment will taint the voting result, as some Owners voting decision will be influenced by their wish to avoid financial loss/being the receiving end of unfair treatment.

7) In summary, Home Owners wish to regain our rights to vote in an enbloc sale without any pressure or threat of penalty or unequal treatment. Such penalty clauses must be banned in enbloc sale contracts, and Sales Committees who include such penalty clauses must be penalised instead, and the sale disapproved.

The Home Owners Should Not Be Penalised for Objecting To The Sale of Their Home petition to Legislature, Parliament was written by Charlie and is in the category Civil Rights at GoPetition.