STB stops Allgreen’s purchase of condo for lack of ‘good faith’
AN APPLICATION for the en bloc sale of Regent Garden has been dismissed by the Strata Titles Board (STB) – much to the delight of the majority owners.
A group of 25 owners at the 31-unit condominium had earlier sued the buyers, Allgreen Properties, for allegedly breaching the sale and purchase agreement by grossly undervaluing the property at West Coast Road. Allgreen has denied the allegations.
While the High Court has yet to hold a hearing on the case, the STB yesterday decided that the $34-million sale was not conducted in “good faith” because the basis for the valuation of the property was wrong.
The majority owners argued that developer Allgreen had overstated the development charge, or DC, thus depressing the sale price.
The DC was initially stated to be $7.6 million, but worked out to be just over $950,800. The STB heard that the sale committee had discovered the shortfall from a letter dated July 23 last year, sent from the Urban Redevelopment Authority to Allgreen’s architects in their proposed redevelopment project.
In explaining the STB’s decision, which also took into account the views of two valuers who had performed valuations of the condominium, deputy president Alfonso Ang said the first calculation of the DC “gave rise to incorrect market value”, thus resulting in “the sale price of $34 million that was well below the market value”.
When the STB announced its decision yesterday, owners who were present were all smiles and congratulated one another.
However, this is just round one of what is to come. There are still two High Court orders on whether the contractual agreement signed between the condominium’s sale committee and Allgreen is valid.
The developer said in a statement it was “surprised” at the STB’s decision to proceed with the hearing despite the pending Court proceedings initiated by both parties.
“The Board’s decision will have no bearing on Allgreen’s case in the High Court, where Allgreen will continue to ask for an order that the majority owners complete the sale and purchase of Regent Garden in accordance with the terms of the sale and purchase agreement,” it said.
Allgreen said that before the agreement was signed, it had offered the option of having a floating sale price that would be subject to the DC. The sale committee, however, rejected this option and decided to fix the sale price at $34 million in order to guarantee itself certainty of sale, the developer added.
Source : Today – 31 Jan 2008