Owners evicted from [email protected] unit after MCST’s forced sale to recover unpaid maintenance fees

The couple who owned the flat had repeatedly failed to pay bills, which amounted to around $36,000 at the time of the sale. PHOTO: SCREENGRAB FROM GOOGLE MAPS

SINGAPORE – A couple who owned a three-bedroom apartment at [email protected] were evicted after the executive condominium’s management corporation strata title (MCST) forced sold the unit at an auction in April.

Forced sales are very rare and fraught with legal and other complications, but the MCST had run out of options.

The couple, aged 44 and 50, bought the 1,055 sq ft unit at the 99-year leasehold executive condominium in Tampines Avenue 8 in 2015.

But they repeatedly failed to pay management and sinking-fund bills, which amounted to around $36,000 at the time of the sale.

Under the Building Maintenance and Strata Management Act, the MCST has the power to force the sale of a unit to recover money owed.

The seventh-floor apartment was first put up for sale in April and eventually sold for $945,000 at an auction by Knight Frank. The legal processes were executed by lawyers Toh Kok Seng, Daniel Chen and Sharon Tay from Lee & Lee.

Mr Toh, a senior partner in the Litigation and Dispute Resolution and Intellectual Property departments, told The Straits Times: “The main objective of embarking on a forced sale is to compel the property owner to make payment of the outstanding contributions. As long as the owner pays up, the forced sale will be called off.

“This may be the first successful forced sale of a strata unit by an MCST in recent times.”

There are certain legal requirements that MCSTs should fulfil, including placing a notice of the intended sale in one or more approved daily newspapers.

If no payments from the property owner are received within six weeks of the publication of the notice and there are no legal actions to restrain the sale, the MCST can proceed to sell the unit.

The MCST published a notice in The Straits Times in November 2020 stating that it would sell the unit, noting that $21,891.01 was owed by the owners at the time. The debt accumulated to around $36,000 by the time of the sale.

Mr Toh said: “The nature of a forced sale also means that you will likely not get the owner’s cooperation throughout the entire process.

“This means an inability to access the property for valuation and viewing by potential buyers. The property would have to be sold without vacant possession. The successful purchaser may have to evict the occupiers of the property.”

Knight Frank auction and sales manager Noelle Tan, who handled the sale, said the unit was put up for auction twice within a year. There were several interested buyers as the apartment was priced below market value.

“Many potential buyers were deterred by the terms set by the MCST, and also because they were unable to view the unit,” said Ms Tan.

“But in the last auction, there were two buyers who were aggressively bidding for the unit, which had an opening price of $900,000.”

At least one of the former owners was apparently still staying in the unit after the sale was completed in July, but it has since been vacated. PHOTO: ST READER

An individual female investor paid $945,000, or $895 per sq ft (psf), for the apartment.

ST understands that the proceeds from the sale were insufficient to satisfy all prior registered mortgages and charges, including the amount owed to the MCST. That means the owners did not get any money from the sale. In a forced sale, proceeds typically get paid first to banks on outstanding mortgages, followed by the Central Provident Fund and MCST, before any remaining amount goes to the property owner.

In many past cases, the MCST withdrew the sale after the owners paid the arrears. Sometimes, owners would offer to sell the units themselves as MCST sales are often sold below market value, added Ms Tan.

Urban Redevelopment Authority data showed that two 1,151 sq ft units at [email protected] were sold in the same month at about $1.3 million and $1.18 million, which works out to $1,151 psf.

ST learnt that at least one of the former owners was apparently still staying in the unit after the sale was completed in July, but it has since been vacated.

The MCST did not respond to queries about the sale by press time.

Mr Toh noted: “The process of a forced sale by the MCST is often fraught with difficulties and challenges, as the experience with the [email protected] case shows, but they are not insurmountable.

“As long as the MCST is willing to take a calculated risk and with proper advice from legal and other professionals, it can be done.”

“Source:[Owners evicted from [email protected] unit after MCST’s forced sale to recover unpaid maintenance fees] © Singapore Press Holdings Limited. Permission required for reproduction”

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