Shunfu Ville was already sealed for a collective sale for $638 million this coming May. However, there were some issues in selling the property which is the reason why High Court’s approval is required.
Five unit owners have opposed the shared sale of Shunfu Ville while the Urban Redevelopment Authority told developer Qingjian Realty Group that they should stick of constructing a project with 21 to 23 storey limit instead of 30 to 36 storeys.
There are two mediation sessions conducted with the five opposing owners wherein the Strata Title Boards have decided to stop the collective sale committee. The committee of collective sale has already applied last week to get the approval of the High Court.
Over 82 percent of the total owners of Shunfu Ville have approved the sale of the privatized state of Housing and Urban Development Company with 358 units to Qingjian Realty in accordance to the legal requirements involved. Unfortunately, selling the property already needs the approval of the High Court caused by five owners who have refused the sale.
How Can Owners Refuse a Collective Sale of a Property
Owners have the right to object the sale because of various grounds like financial loss even if the committee has acquired the approval of the majority of the owners. If ever that the sale continues, each owner of the flats will receive an average amount of $1.782 million because they have agreed to reduce the reserve price to $638 million which is $688 million before.
Teresa Koh, a Shunfu Ville flat owner had received a circular about the five objections last month. She was asked to delay in searching and buying a new flat. Each owner of the flats is required to pay a legal fee for the High Court with an amount of $1,500.
Qingjian Realty had started to purchase collective sales in Singapore eight years ago which is why Li Jun, its manager director remained optimistic about the issue. He said to The Straight Times that such hurdles are just part of the process in developing projects. As a matter of fact, lawyers have already warned him that he will face such problems when purchasing collective sale sites.
According to Li Jun, it is not true that they have already come up with the design of the project. What they have done is the submission of the outline application wherein the developer is allowed to use the land proposed that also includes the plot ratio, as well as the height and form of the building.
The firm is still hoping that they can build a project with 30 to 36 storeys even if they are already aware of the limit that the Urban Redevelopment Authority has required. When it comes to the price of the units, it will base according to the condition of the current market.
However, it is expected that flats on higher levels will be more expensive compared to flats on the lower levels. Qingjian Realty is looking forward to maximizing the plot ratio of the Shunfu Ville according to the guidelines presented by the URA. They have already confirmed that they will follow the limit required by the URA when it comes to the height of the project.
URA had received the outline proposal of Qingjian Realty while ensuring that the project will only be from 21 to 23 storeys. They can be able to achieve a gross plot ratio of 2.8 based on their studies. Mr. Li said that they only need to wait for the approval of the High Court.
High Court application is just a part of the process when purchasing a collective sale site said Mr. Kenneth Szeto, Colin Ng and Partners’ real estate partner. It is not a surprised that minority owners will express their objection in selling the units knowing that developments are not all the same as well as the time that they have purchased the units.
If the grounds presented by the opposing party are not valid then it is expected that the sale will continue. However, if the grounds of the five members who opposed the collective sale have been proven, then the application will be turned down.
With the time that Qingjian Realty has waited for the result of their application for the collective sale of Shunfu Ville, they have finally acquired the approval of the High Court this year. Two owners of the opposing party were not able to present their lawyers to the High Court according to The Straight Times. Owners who have not agreed on the collective sale were given 30 days for them to file an appeal.
Lee Liat Yeang’s senior partner, Dentons and Rodyk and Davidson, who acted for Qingjian Realty said that this can be an important scene in the collective sale market wherein only a few were able to attained success for the past years.
Last May 2016, majority of the Shunfu Ville owners have agreed to sell the units to Qingjian Realty however five owners have rejected the sale. As a result, they will need to get the approval of the High Court in order to continue the sale application.
Why Qingjian Realty Got the Approval of the High Court
Three of the five owners who have objected the sale eventually withdrew while the two still continue their objection without telling the reason behind their decision. According to the managing director of Qingjian Realty, Li Jun, they were very happy to get the approval of the High Court.
The company is already looking at their plans and designs for the property even if they still have to wait for 30 days if ever that the two opposing owners will file an appeal. Mr. Kenneth Szeto, a real estate partner of Colin Ng and Partners said that filing an appeal for the collective sale will be based on the combination of law and facts or point of law that the High Court has decided.