Wednesday, April 6, 2011

394. Real Estate : Collective Sale - A good question without an answer

April 6, 2011

"What is the point of a 2-year restriction when the sales committee (SC) can be formed again within the 2-year restriction period to get enbloc sales going?" I asked the lecturer during the class on April 6, 2011.

The lecturer had stated that the SC will cease to exist if the enbloc sale is not successful after one year from the first signature done on the CSA (collective sales agreement). Therefore, he had answered my question as to what happened if the SC cannot get the 80% or 90% and therefore is unable to offer the property for sale. In the previous lecture, he had said that the "failed attempt" meant that the SC fails to find a buyer for the enbloc property after one year from the first signing of the CSA. If the SC gets 80% or 90% within that one year, the SC had a "failed attempt".

OK. He has answered my pestering question which had confused some of my classmates.


The lecturer wrote on the white board an illustration as follows:

Talk a lot
No action SC formed Year 1 Year 2 Year 3

Either AGM or EGM to form a SC
Quorum - 20% of SV (share value) or 25% of owners present
One-hour waiting time, no quorum, meeting cancelled.
Quorum = 30% of SV. SC is then formed. One year must do it. If nothing happens after one year, "failed attempt", SC ceases to exist.
Starting point of enbloc is the formation of the SC
Once SC is formed, within one year must obtain the CSA's first signature or face automatic termination.
The one-year period begins when the SC is elected at the AGM/EGM.
There is a (2-year restriction period?) after a potential collective sales fall through.
Within 2-year restriction, lst repeated attempt for enbloc sales by SC must get 50% SV or number of owners. 2nd and subsequent repeated attempts must get 80% will be needed.

So I asked since nobody did it:
"What is the point of having the 2-year restriction when the SC can be formed within the 2 years to attempt another enbloc sale?"

The lecturer looked at me and said: "That is a good question!"
So what is the answer? He would not give me the answer and he insisted that his interpretation that the first attempt after the failed attempt is to be done within the 2-year restriction.

So, why the 2-year restriction rule is made? Does not make sense to me and to many of my classmates. The lecturer stuck to his gun.

So this is a good question without an answer.

I said: "Maybe the STB (strata title board) should be be asked?"
He said: "Who do you think is in charge of the enbloc sale? Ask that authority."
"It is the URA".
I said: "The STB is the regulatory body."

So, all students get confused since none of us are experts in collective sales!

One classmate said to me: "Since the collective sales question was just asked in the recent examination, it will never be asked again".

I told my classmate: "The collective sale is an important issue and has many parts. The question can still be asked again!"

I still can't understand why this lecturer is so sure that the first attempt must be within the 2-year restriction period. There are so many facts and figures to memorise but at least this lecture was lively. Two of my classmates chatted by themselves prompting the displeasure of the lecturer and I told them to be quiet, diplomatically. Then another student with grey hair said: "Please don't point the laser at me," as the lecturer was so active moving his hand and his laser beams shot at various angles. Sometimes the beam shot to my eye but I was too polite to tell him about the safety.

Is the lecturer committing a breach of duty of care to his student by pointing his laser beam anywhere and every direction when he lectured?

Law of Tort: Duty of Care - Test - Breach
Standard of Care, vicarious liability, Negligence, Negligence Defence - contributory negligence and consent negligence (volenti Non Fit Injuria), Disclaimer, Dangerous Premises (laser pointer?).

The lecturer apologised and said that he could not switch on the laser promptly if he switches it off. I asked the complainant classmate: "Perhaps we should chip in the money and buy him a good laser pointer."

This course is very tough as we will get over 1000 pages of paper to study. Some humour is necessary during lectures.

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