What’s best way to add name to property?

Q MY PARENTS are owners of an existing private property as joint tenants. They wish to pass on the property to me ultimately when they die.

The property is worth about $1 million and still has a small outstanding bank loan.

What are the full costs, taxes and so on involved to add my name as a joint tenant? And what would the costs be like if my name is added as a tenant-in-common instead?

After adding my name as either joint tenant or tenant-in-common, can I use my Central Provident Fund (CPF) money to pay off the outstanding bank loan in either case?

Alternatively, if my parents choose to write a will after one of them dies, what are the costs to be considered?

And when the time comes to exercise the will, what costs and taxes are there to exercise the will and to transfer the property to my name. Are there stamp duties to be paid?

Other than what has already been mentioned, are there other smarter or more cost-effective ways to transfer the property to me?

A IN ORDER to add your name as a joint tenant, you are likely to have to pay stamp duty on the transfer of your notional share of the property.

The Commissioner of Stamp Duties will adjudicate the amount of stamp duty payable on the transfer. Your notional share is taken at one-third of the value of the property since there will be three joint tenants when your name is added.

On the basis of your computation of $1 million as the value of the property, your notional one-third share is $330,000 and the stamp duty payable is $4,500.

There is also your lawyer’s legal fees to effect the transfer which you will have to consider.

Joint tenancy means that you own the whole of the property jointly with your parents and the right of survivorship exists. This means whoever lives longest retains the property.

The joint tenant who has predeceased the remaining joint tenants cannot will his notional share to anyone because of this right of survivorship.

You are more likely to outlive your parents, in which case you are likely to be the sole surviving joint tenant with the passage of time.

If your name is added as a tenant-in-common, your parents may specify the percentage of the property to be allocated to you, for example, 1 per cent or 25 per cent or whatever percentage your parents decide.

Based on your share, you will have to pay stamp duty assessed on your share of the value of the property and your lawyer’s legal fees for the transfer.

The difference between transferring as tenants-in-common and joint tenants is that the share given to you by your parents is specific when transferred as a tenant-in-common. The larger your share, the higher the stamp duty payable.

Another difference is that your parents may make a will to give away their share in the property under tenant-in-common but not if the property is held as joint tenants.

However, as you have said that your parents intend for the property to be ultimately yours after they die, transferring the property to you as a tenant-in-common will not fulfil their goal.

This is because you own only the share that they transfer to you, and not their remainder which is still in their name. In order to obtain their share, they must specifically will their share to you in a will.

Once your name is added as joint tenant or tenant-in-common, you may start to use CPF to pay the outstanding loan.

If your parents write a will to will the entire property to you after their death, it will essentially ensure their wish that the property be passed to you when they are no longer around.

However, this means that you cannot use your CPF to pay for the property.

There are legal costs for preparing the will and for subsequently administering the estate of your parents when they die.

There is estate duty to be paid on your parents estate although dwelling houses are exempt up to $9 million and personal property up to $600,000 (for example, cash in hand, shares, and so on).

Therefore, if your parents’ private property does not exceed $9 million, it is unlikely to be taxed on an estate duty basis. There is nominal stamp duty of $10 payable on the transfer pursuant to the administration of probate.

It would seem that the best way for the property to be transferred to you pursuant to your parents’ wishes would be by way of a will rather than by effecting a transfer to you by way of gift or sale.

Lim Choi Ming Partner KhattarWong

Advice provided in this column is not meant as a substitute for comprehensive professional advice.

Source : Sunday Times – 9 Sept 2007

Horizon Towers deal in limbo as sales committee quits

The majority sellers of Horizon Towers were supposed to get together last night to resolve a problem, but things ended up being possibly worse.

The sales committee quit last night at the meeting held at Holiday Inn Park View Hotel, and even up to 11pm, no new committee had been formed, BT understands.

The majority sellers who arrived with their lawyers in tow were supposed to decide how to respond to a lawsuit which they face brought by Hotel Property Ltd (HPL), Morgan Stanley Real Estate managed funds and Qatar Investment Authority after the en bloc sale of their Leonie Hill property fell through last month.

The Strata Titles Board (STB) refused to grant a collective sale order, saying that Horizon Towers had filed a defective application. HPL and its partners are suing the majority sellers for failing to file a proper application.

HPL and its partners in February signed a deal with 84 per cent of the owners of Horizon Towers to buy the property en bloc for $500 million, for redevelopment. There have been media reports that some sellers regretted their decision to sell at that price when neighbouring developments later sold for twice as much per square foot.

Last night’s meeting plunged into limbo when the sales committee quit. Sellers who appeared at the meeting said volunteers were being asked to serve on a new sales committee, and that two men stepped forward on condition they would be granted blanket immunity from legal proceedings.

However, they did not get their condition, and no conclusion was reached.

BT understands that by the time the meeting started, there were only three people left on the committee as the other members had quit in the past weeks. This fails to meet the quorum needed of five people on the committee.

Throughout the meeting that started at 8pm and was scheduled to end by 11:59pm yesterday, groups of people and individuals were seen leaving the ballroom at different times to discuss and to smoke.

The meeting was tightly monitored by about six security officers who made sure only majority sellers were allowed into the ballroom. Applause interspersed with cheering was heard at different intervals of the meeting.

The majority owners whom BT spoke to estimated there were more than a hundred people who turned up.

They had a mixed response regarding the outcome. One man seemed upset that the sales committee had quit and said: ‘I don’t know what’s going to happen now. Who cares?’ Another seemed pessimistic about the chances of another committee being formed: ‘Who would want to be on the sales committee now with the threats of legal suits?’

At press time, the meeting was still going on, BT understands.

Source : Business Times – 8 Sept 2007

HPL: Horizon Towers sales committee tried to scupper deal

Several members of the Horizon Towers sales committee tried to scupper the en bloc sale by rallying the rest of the majority sellers into going back on their collective agreement, according to an affidavit filed in the High Court yesterday by the buyers.

The claim is one of several in the late-night filing made yesterday by Hotel Properties Ltd (HPL), Morgan Stanley Real Estate-managed funds and Qatar Investment Authority.

HPL and its partners had in February signed a deal with 84 per cent of the owners of Horizon Towers to buy the Leonie Hill property en bloc for $500 million. The sale fell through last month when the Strata Titles Board (STB) refused to grant a collective sale order, saying that Horizon Towers had filed a defective application.

HPL and its partners, through their lawyers Allen & Gledhill, are suing the majority sellers for failing to file a proper application.

In its affidavit – a copy of which was obtained by BT – HPL and its partners alleged that some members of the Horizon Towers sales committee tried to defeat the collective sale by encouraging the other majority sellers to go back on the agreement.

The affidavit said an anonymous circular was sent to all residents of Horizon Towers in late April. The circular said: ‘If enough like-minded owners rescind the agreement and the majority falls below 80 per cent, the application to the STB can be repealed . . . With cohesive cooperation, this movement can be successful.’

The circular included a blank ‘Letter to rescind participation in the collective sale agreement of Horizon Towers’ and urged owners to send their replies to two mailboxes – which the affidavit claims belong to two current members of the sales committee.

The affidavit also quoted from other anonymous flyers sent to the residents of Horizon Towers, which said the sellers were being paid a ‘paltry sum’ for their development.

HPL and its partners charge that some of the sellers want to back out of the deal because they were unhappy with the price offered for the development.

There had been several media reports that some sellers regretted their decision to sell Horizon Towers to HPL and its partners for $500 million, when neighbouring developments – such as The Grangeford – subsequently sold for double the per-square-foot amount.

The buyers’ case is that the majority sellers of Horizon Towers did not do their utmost to submit a proper application for a collective sale order to the STB.

They said the sellers filed the application only in April – two months after the deal was signed, and just four months ahead of the deadline for the completion of the sale. The buyers said this was a ‘breach of (the sellers’) express obligation to apply expeditiously for the collective sale order’.

They also claim the sellers were ambivalent about the dates for the STB hearing and were slow in releasing documents which the objectors – the minority sellers who objected to the en bloc sale – had requested.

This affidavit comes just ahead of a meeting today of all the majority sellers of Horizon Towers. They are meeting to decide how they should respond to HPL’s suit.

The sellers need to decide if they should accede to HPL’s demand that the sellers extend the deadline of the sale by four months, appeal against the STB’s decision and file a fresh application to the STB, if necessary. Alternatively, they can contest the suit.

Source : Business Times – 7 Sept 2007

Horizon Towers saga reaches a turning point

The long-running saga that has gripped the Singapore property market has reached a turning point; the majority sellers in the Horizon Towers debacle now have just over a week to respond to lawsuits filed against them.

Sued for allegedly messing up the en bloc sale of the development, the majority sellers need to decide if they should contest the action or give in to the demands.

BT spoke to several lawyers to determine the implications of each decision.

Background

The tale began in February when 84 per cent of Horizon Towers owners – the majority sellers – agreed to sell the Leonie Hill development en bloc to Hotel Property Ltd (HPL), Morgan Stanley Real Estate-managed funds and Qatar Investment Authority for $500 million.

The sale fell through when the Strata Titles Board (STB) in early August refused to grant an order for the collective sale. The board said the sale application was defective because certain documents were missing.

STB’s rejection came just days before the Aug 11 deadline for the completion of the collective sale. To salvage the deal, HPL and its partners asked the majority sellers to extend the deadline and either to appeal against the STB’s decision or file a fresh application.

When the majority sellers did not respond, HPL and its partners decided to make good on their threat to sue.

The lawsuit

Through their lawyers, Allen & Gledhill, HPL and its partners filed an originating summons in the High Court last week – naming all 255 owners and the sales committee members who signed off on the collective sale as defendants.

It is believed that HPL feels the majority sellers may not have kept faith with them – especially when some sellers were not keen on having the en bloc sale succeed, when subsequent collective sales of neighbouring developments fetched much higher prices.

HPL and its partners are now demanding that the majority sellers ‘do everything necessary’ to obtain the collective sales order – including extending the sale completion deadline by four months to Dec 11, appealing against STB’s decision and/or filing a fresh application for a new sales order, if needed.

Should the sellers fail to take one of these actions, HPL and its partners will sue for damages of between $800 million and $1 billion. This means each of the majority sellers could be liable for about $4 million.

The majority sellers have until Sept 11 to decide on what to do.

The minority owners are not being sued because they were not part of the collective agreement to sell Horizon Towers, but the majority’s decision would impact whether they would have to move out of their homes.

What should Horizon owners do?

The sales committee of Horizon Towers told BT they have asked the High Court to appeal against STB’s decision, but have not yet decided if they should give in to the other demands.

Some sellers have indicated their intention to contest the lawsuit, with one apartment owner saying the sellers intend to raise up to $5 million to engage lawyers to prepare their defence.

The majority is now collectively represented by Tan Rajah & Cheah, but individuals have begun seeking their own legal advice.

BT spoke to lawyers not involved in the Horizon Towers saga. While refraining from making a direct judgment on the case, the lawyers acknowledged that the majority sellers are obliged to ‘do everything in their power’ to file a proper sale application to the STB, given that they agreed to do so in the sale-and-purchase agreement.

Patrick Ee, director of law firm Legal21 LLC, told BT: ‘It’s an accepted position in law that parties to an agreement have to use their best endeavours to achieve the condition precedent in that agreement. In a previous en bloc deal I was involved in, we advised the sales committee to extend the sale completion deadline because that was what was needed to ensure that the sellers were ‘doing everything in their power’ to make a proper collective sale application to the STB.’

Mr Ee also pointed out that in the case of Horizon Towers, the STB had rejected the collective sale order application because of improper documentation. ‘Speaking generally, technicalities which can be rectified should be dealt with,’ he said.

Some majority sellers have also indicated their intention to name the lawyers and sales agents who advised them on the collective sale application as third parties to the claims made by HPL and its partners.

A corporate lawyer, who asked to remain unnamed, commented on such a course of action: ‘Naming their advisers as third parties doesn’t absolve the sellers of their contractual obligations to the buyers; it merely serves to indemnify them against some of the damages which HPL is looking to claim against them.’

Alvin Chang of M&A Law Corporation explains the position further: ‘Bringing in the advisers as third parties doesn’t mean the sellers can shift the blame completely on the advisers. It just means that, should HPL prove its case against the sellers and succeed in their claim for damages, the sellers can try to get their advisers to indemnify them for those damages caused as a result of the advisers’ negligence or inadequate advice.

‘But whether the sellers have a case would depend a lot on the scope of work their advisers were supposed to provide during the en bloc sale application.’

Nicholas Narayanan of law firm Nicholas & Co believes the focus should be on resolving the issue, rather than assigning blame. ‘I feel it’s premature at this juncture to point fingers at various parties as to who’s to blame for the STB’s decision, when a resolution for the whole matter is clearly in sight. The majority sellers can easily rectify the situation: they can extend the deadline and refile an application to save the sale,’ Mr Narayanan said.  

Source : Business Times – 31 Aug 2007

Easier asset division after a split

DIVORCED couples will soon find it easier to divide their matrimonial assets in a “smooth and equitable” manner, thanks to changes to the Central Provident Fund (CPF) scheme.

From Oct 1, an ex-spouse no longer has to wait for her husband to turn 55 and be eligible to withdraw his CPF. These rules, passed under the CPF (Amendment) Bill in Parliament yesterday, now allow the immediate transfer of CPF monies to the ex-spouse’s CPF account, so long as the latter is a citizen or Singapore Permanent Resident.

There is also no need for the member to set aside the prevailing minimum sum and Medisave minimum sum first before distributing the rest to his ex-spouse.

Manpower Minister Ng Eng Hen said the aim was to “facilitate the division of matrimonial assets under the Women’s Charter, provided there is no leakage from the CPF system”.

The House also approved changes to allow family members to support one another financially, including raising the top-up limit to the prevailing minimum sum. Previously, this was pegged to the individual recipient’s minimum sum level, which would have been much lower.

Another change involving divorced couples will allow for the immediate transfer of a property to the former spouse. Currently, when a member uses his CPF to buy property and a court orders the ownership to be transferred to the ex-spouse, the member must return, in cash, to the CPF account whatever amount is due to it. With the change, this is no longer necessary.

Instead, a charge will be placed on the amount of money used to buy the house, such that if the ex-spouse sells the house later, that money will be refunded to the member’s account.

And to help more Singaporeans have enough for old age, members will be allowed to transfer funds from their ordinary account to their grandparents’ retirement account, if both parties meet the top-up criteria. Previously, they could only do so using cash. Top-ups will also be allowed to spouses and siblings under-55 using CPF or cash from January.

Members of Parliament welcomed the changes, but asked for more public education measures. Agreeing that the changes were complex, Dr Ng said simple cartoons would be used to convey messages and more roadshows would be organised. He will also deliver a ministerial statement in Parliament on Sept 17.

Source : Today – 28 Aug 2007

Mitre site sale: No payout for evicted dissenter

HE WAS the last man standing in the way of the sale of the Mitre Hotel.

Now, 62-year-old Chiam Heng Hsien, who is the only living partner of the hotel, will not only have to move out, but he will also not get any compensation for being evicted.

The dilapidated hotel, which stopped operating in 2002, is a well-known landmark, sitting on 40,000 sq ft of prime land in Killiney Road.

It has also been at the centre of a legal saga that started back in 1996.

Then, Mr Chiam fought off a move by his cousin, Mr Chiam Heng Luan, and the latter’s daughter – who had obtained a court order to sell the site.

However, the High Court did not decree that the hotel had to be vacated before it could be sold.

Then, the highest bid came up to $73 million, but Mr Chiam Heng Hsien, who owns 10 per cent of the property, resisted.

He said he would move out only if the hotel proprietors were paid $21 million.

The deal fell through.

Mr Chiam continued staying in the hotel until early last year, when the family went back to court.

By the time the hearing began in April this year, he was the only one holding out against all the other 11 owners of the site, who wanted it to be sold.

Justice Judith Prakash ruled against Mr Chiam, ordering the property to be sold via public tender. Mr Chiam was also ordered to clear out of the premises at least four weeks before the sale is completed.

Justice Prakash said in April that she would decide later whether the hotel proprietors should be compensated for being kicked out.

On Tuesday, in a 52-page written judgment, she ruled that the proprietors were not entitled to compensation.

The judge also gave her reasons for deciding that the property was to be sold.

In court, Mr Chiam, represented by Mr Andre Maniam, had claimed that a 1948 agreement allowed the hotel proprietors to stay on the property for as long as they wished.

Alternatively, he argued, the proprietors should be awarded compensation if they move out.

But the plaintiffs, through Senior Counsel Harpreet Singh Nehal, argued that there was no such agreement.

In her judgment, Justice Prakash agreed that, apart from Mr Chiam’s testimony, there was no other evidence that there was such an agreement for an indefinite stay.

However, she found that there was an intention for the proprietors to occupy the property for as long as it was running a hotel business.

She found that once the proprietors stopped running the hotel business, they could no longer prevent the land owners from demanding the return of the property.

Therefore, she ordered that all 12 owners of the property pay for all property tax and maintenance expenditure incurred by the proprietors since the beginning of 2003, when the hotel lost its operating licence. The unspecified amount is to be paid from the sales proceeds of the property.

Source : Straits Times – 24 Aug 2007

Lawyer ‘flees S’pore with client’s $68,000′

IN the first suspected case of a lawyer absconding with a client’s money to emerge since the rules surrounding such crimes were tightened last month, David Khong of Sim & Wong allegedly left town last weekend with $68,000 from the account of a client at a previous firm.

On July 15, rules came into force stipulating that two signatories are needed for cheques for amounts exceeding $30,000 to be drawn from clients’ accounts.

The rules, among other measures, were designed to prevent lawyers from mishandling clients’ money, and were actuated by an incident in June last year when lawyer David Rasif disappeared with over $10 million from clients’ accounts.

According to Peter Sim, a director of Sim & Wong, Mr Khong had closed his sole proprietorship, David Khong & Associates, and joined Sim & Wong only in June.

At his previous firm, Mr Khong had been working on a conveyancing transaction, and the work was transferred to Sim & Wong. However, the buyer’s 4 per cent deposit, worth about $88,000, was left in the old firm’s bank account, Mr Sim said.

When acting on behalf of a seller, a law firm typically holds the buyer’s deposit, which it releases to the seller after the transaction is complete.

Although David Khong & Associates had shut down, the firm’s bank account remained open. This was for administrative reasons, such as to pay ongoing bills, and is considered ‘normal procedure’, Mr Sim told BT.

Further, law firms usually place client money in fixed deposits, rather than current account, to earn higher interest. As the transaction was expected to close within weeks, the money was left at the old firm’s account, he said.

On Aug 20, Mr Khong sent an email message to Wendy Wong, a partner at Sim & Wong. In the email message, Mr Khong said he had absconded with $68,000 of the client’s money and left the country, according to Mr Sim.

The email message also mentioned miscellaneous debts, said Mr Sim. He said he had seen Mr Khong at work the previous Friday and noticed nothing untoward in his behaviour.

Sim & Wong has reported the matter to the Commercial Affairs Department of the Singapore Police Force, as well as the Law Society.

The police told BT yesterday that the report had been lodged, but said it was ‘inappropriate to comment on investigations’ and did not furnish further detail.

Meanwhile, ‘the Council of the Law Society has intervened on 21 August 2007 in the practice and client account of one David Khong Siak Meng as the Council has reason to suspect dishonesty in relation to a sum of about $68,000 on the part of this solicitor’, a spokesperson for the Law Society told BT.

‘The Council has appointed an investigative accountant to look into the matter. The Chief Justice has been informed of the matter. As the matter is currently under police investigation, the Law Society is unable to comment further,’ added the spokesperson, but said the society would issue a press release at a later date when appropriate.

‘We don’t know how or when he (Mr Khong) took out the money. Presumably he only needed one signature to do so,’ said Mr Sim.

Mr Khong’s confession came ‘out of the blue’, said Mr Sim.

Source : Business Times – 23 Aug 2007

Mayer Mansion owners win appeal case

Owners of Mayer Mansion on Devonshire Road have won their case in the Court of Appeal against a company that sued them for cancelling a $30 million collective sale.

The owners of the 10-unit property will also get to keep the $3 million deposit paid by foreign-owned property developer Travista Development.

They have sold their homes for $42 million to Golden Flower Group (GFG) which is owned by the Indonesian family of its chairman Po Sun Kok.

GFG has its core businesses in apparel manufacturing, real estate and financial services.

Its real estate division, Golden Flower Group Real Estate (GFGRE), bought MacDonald House in 2003.

Yesterday, GFGRE chief executive Nico Po told BT that the company bought all 10 units in Mayer Mansion through its subsidiary Somerset Residences, and plans to develop the estate into 30 units of ’boutique, ultra-luxurious apartments’.

The case began in December last year when Travista agreed to buy Mayer Mansion and offered the owners of the 10 unit residential property $30 million in the collective sale.

However, Travista, which had to get a qualifying certificate to buy the property because it was foreign-owned, did not complete the transaction by March 12 as had been agreed between the parties.

Travista sued the owners on April 3 and applied for an injunction to restrain them from exercising their rights under the agreement, but failed in its application.

Two days later, the owners notified Travista that they had rescinded the sale and purchase agreement. Travista finally obtained the qualifying certificate on April 11.

The case went to the High Court where Travista argued that it was entitled to complete the purchase but owners argued that Travista was obliged to use its ‘best endeavours’ to obtain the certificate and to do so ‘without delay’.

Travista’s case was dismissed by the High Court in May and the Court of Appeal last month.

The owners were represented by senior counsel Davinder Singh, Hri Kumar and Tham Feei Sy of Drew & Napier.

Source : Business Times – 22 Aug 2007

Small law firms muscled out by big boys, high costs

Despite the good times, an unlikely group of people are finding the going tough – lawyers.

More small law firms – which have between one and five lawyers – have been folding up this year than in the past five years.

According to The Law Society of Singapore, the number of small law firms fell to a five-year low of 690 last month.

In the past two years, the number of such firms remained constant at slightly above 710.

Lawyers that BT spoke to were not surprised to hear that their ranks were starting to thin out, pointing to rising costs as the main culprit.

Terence Hua, 33, who has been a sole proprietor for the past one-and-a-half years said: ‘To us, a booming economy represents higher operating costs. Rent goes up, and staff want to be paid more.

‘Survival has been a real question for me, and I’ve been looking at my options in the job market recently. I left bigger firms to be my own boss, but I’m not totally a dreamer.’

Apart from the problem of rising costs, lawyers say that the benefits of a booming economy do not necessarily trickle down to small firms.

Rajan Chettiar, 41, who has been a sole proprietor for the past four years said: ‘The lawyers that enjoy the boom are the big and medium-sized firms because they handle the en bloc sales, and transactional work from increased business activity.’

‘But the small law firms can’t do that work because they lack the manpower needed to execute the deal.’

Hoon Tai Meng who dissolved his firm of five lawyers after 10 years to join KhattarWong this year agrees that size matters.

‘We had to turn away good work because we were too small to execute the deals.’

‘It was difficult to handle corporate transactions above $10 million but now with a big team, there are no limitations.’

And Mr Hua added: ‘Many of us do general work like criminal and matrimonial cases, which do not necessarily increase because the economy is booming. In fact, these days it is difficult to get the constant flow of such work needed to run a business.’

Another problem is that more people are opting to represent themselves in court.

Chief Justice Chan Sek Keong noted that more convicted offenders are appearing in High Court appeals without lawyers, in an interview published in the latest edition of the Singapore Academy of Law’s Inter Se magazine.

BT was unable to get figures from the courts on lawyerless litigants in the past five years. But figures from the Supreme Court show that for this year, about 24.8 per cent of magistrates’ appeals by the accused for the first five months of the year on average were unrepresented.

And while there is more conveyancing work now, fees remain competitive.

Kenneth Tan, managing director of Asia Law Corporation said that conveyancing fees have edged up by about 10 to 20 per cent this year.

And sole proprietor Nicholas Narayanan, 35, who set up his firm this year said that a new rule which kicked in last month requiring lawyers to have two signatures for withdrawals above $30,000 from clients’ accounts presents hurdles for sole proprietors to do conveyancing.

This is because conveyancing lawyers make payments on behalf of their clients, which often exceed $30,000. And it can be difficult for sole proprietors to find another lawyer to sign off every time such payments are made.

The biggest law firms in Singapore have enjoyed strong growth. Since 2003, Allen & Gledhill and Rajah & Tann grew by about 50 per cent to 281 and 225 lawyers, respectively. WongPartnership more than doubled to about 180 lawyers.

CJ Chan said at the opening of the legal year in January that small law firms play an essential role in servicing poorer sections of society, but have not benefited from globalisation and the ‘fruits of Singapore’s economic progress’. It is ‘imperative’ for the Law Society to make a ’special effort’ this year to help small law firms, he said.

Source : Business Times – 08 Aug 2007

Horizon Towers’ failed buyers allege breach of contract

In the wake of a scuppered Horizon Towers deal, the failed buyers have sent a letter to lawyers representing the majority owners who signed the original sales deal, alleging the sellers are in breach of contract.

The three joint buyers – Hotel Properties Limited, Morgan Stanley Real Estate and Qatar Investment Authority, the investment arm of the Gulf Arab state of Qatar – estimate their loss arising from the aborted deal to be in the region of $800 million to $1 billion.

Hotel Properties’ group executive director Christopher Lim confirmed yesterday that the letter had been sent to law firm Tan Rajah & Cheah.

The consortium of buyers are urging the sellers to consider alternative courses of action. These include extending the deadline for the sales option beyond this Saturday.

There is currently provision for the sales committee to extend the deadline by four months. This would enable a fresh application be filed with the Strata Titles Board.

The move is the latest twist in the contentious collective sale of Horizon Towers. The sale was aborted late last week after months of bitter wrangling between neighbours and lawyers.

Last Friday, the Strata Titles Board ruled in favour of the protesting minority owners of the two tower blocks in Leonie Hill, which were due to be sold for $500 million to the developers.

The ruling in favour of minority owners was the first such ruling in seven years, and came after the board decided that the proper sales procedures were not followed.

The saga began soon after the neighbouring Grangeford condominium was sold en bloc at a far higher asking price per sq ft than the price offered for Horizon Towers.

Unhappy Horizon Towers residents banded together to call an extraordinary general meeting to replace their sales committee. Several of the original members subsequently resigned.

Source : Straits Times – 7 Aug 2007