Goodbye 2020

As much as we try to forget 2020, try to remember the valuable lessons. We will eventually get over the coronavirus, but there will be another virus. That is why environmental conservation should be on the top of our minds. “COVID-19 may be just the beginning of mass pandemics”

Just received this from my friend. Ironic but true.

Keep your spirits high and may you be blessed with good health in the coming year 2021! Happy new year in advance!

Water woes at Waterford

Below excerpt from CNA (

A contractor has been fined S$8,500 for failing to ensure that a licensed plumber was conducting regulated works at a private condominium along Kim Yan Road, causing contamination to water supply… at Waterford Residence.”

Investigations revealed Everrise Maintenance, a local contractor the managing agent had hired for the condo, was tasked to carry out repair work after a crack line measuring approximately 10cm was found on the external surface of a water tank cover during a PUB site inspection. 

“Such repair works are regulated works that should be carried out by a licensed plumber or by workers under the direct supervision of one,” said PUB. Instead of hiring a licensed plumber, Everrise instructed its workers to patch up the crack line without proper instructions.

Not sure if MA selected the lowest quote amongst contractors. Clearly there are certain redlines to cost savings.

Under the Public Utilities Act, causing contamination to water supplied by PUB carries a maximum fine of S$50,000. Failure to ensure that regulated works are carried out by a licensed plumber carries a maximum fine of S$10,000.

Public amenities well-managed. Superbly efficient with social media

By now, you may have heard about the ‘dumbest sheltered walkway’ in Punggol. It led straight to the bus-stop, but the railings extend another 5m-8m unsheltered. This inconvenienced the HDB residents from the cluster of blocks around. And one Lim Vernon took to facebook to broadcast his video about it on 1 Dec.

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Rain rain go away

Usually we use the phrase ‘to save for a rainy day’. Everyone knows a bad time will come, so we put something aside for this future need. Well, the idea is similar for fixing water leaks. Only the execution is quite the inverse. On sunny days we fix the roof. On rainy months like now till Feb-Mar 2021, we save up.

This time of the year, Singapore is experiencing the monsoon season of rainy days. But it may last longer than usual due to the following event.

“La Nina-like conditions have descended upon the Southeast Asia region since August 2020, with further cooling in September, according to Meteorological Service Singapore (MSS). These conditions include changes in the sea surface temperature, cloudiness, and winds over the tropical Pacific Ocean. MSS’s models are predicting La Niña conditions to last through to March

A number of condos with roof leaks are now stuck in a limbo. Firstly the covid-induced circuit breaker disrupted the construction industry. Many contractors are working on backlog jobs with lesser workers from Malaysia, and a higher cost structure.

Secondly, the La Nina daily showers of rain inhibits worktime on roof. It also prevents any waterproofing substrate from bonding perfectly and creating a long lasting tight seal (requires a minimum of 24- 48 hours of dry conditions). Most substrates can still bond in wet conditions, but instead of lasting 15 years, it’s lifespan will be compromised.

As such, both factors escalate the cost.

Here comes the limbo within the MCST. The top floor units and those affected by water leaks face the agony every time it rains. Seems like a few months till sunny days ahead. Logic gets cast aside and they will vote for an immediate repair, no matter the costs.

Needless to say, those units unaffected by leaks will reject the use of funds. Or at least wait till sunnier days when the cost is lower, and the lifespan of repairs can meet a minimum number of years ideally. The majority will fall in this category.

Meanwhile we pray for the rain to go away, for happier neighbors make a neighborhood livable and pleasant. Rain rain please go away.

‘Normally I’d be optimistic that we could work out a little problem like this.’

HDB better than condo, in the social media age

In a recent post on Instagram, social media influencer Xiaxue highlighted the ‘derelict’ state of her HDB common areas in Hougang. Lo and behold!

Cover pic and above pic from Xiaxue instagram account

Aljunied-Hougang Town Council (AHTC) wasted no time in addressing her concerns. Aside from explaining the situation online, AHTC also engaged workers the following day to fix the chipped cement surfaces and painted over the ceiling.

Pound for pound, in a Condo setting the Managing agent would have to …

  1. Get MCST council approval
  2. Mobilise contractors to do minor repairs
  3. Supervise minor works and ensure completion
  4. Release official statement to all residents

All within 24 hours.

Here’s the extra points. AHTC ended their note with “The town council recognises that there is always room for improvement, and welcomes feedback from residents.” My idol MA. Such eagerness and endearing level of service reminds me of SG in the 1980s or Japan today.

Not only that, in this instance the Public model trumps the Private model in both cost and efficiency. An extremely rare sighting for me.

Related posts: “Public amenities well managed. Superbly efficient with social media.”

Owners responsible for upkeep of buildings, says BCA

When the air ventilation system collapsed across several rows of seats at Shaw cinema in NEX, two were injured and sent to the hospital. One had to be carried on a stretcher (seemingly unconscious). The other was conscious but seen lying on the floor clutching her head. George Yang of Goodyfeed remarked if not for social-distancing measures, someone may have lost his life. Indeed, just look at how many seats are covered from the picture below. (See more pics here)

Definitely no small piece~ Even an iPad hitting one’s head from such a height would have caused much pain.

Water that had collected in an air-conditioning and mechanical ventilation duct likely caused the structure to crash during a movie screening earlier this year, Minister Desmond Lee said

While the maintenance of air-conditioning mechanical ventilation (ACMV) ducts within buildings is not subject to regulatory requirements, the BCA spokesman told Straits Times that “building owners are responsible for the maintenance of their buildings, by ensuring that all parts of their buildings are maintained in a state of good and serviceable condition”. (

The unfortunate event is a stark reminder to many building owners. This includes some condos who have been turning a blind eye to overdue maintenance and replacement. My other Council member tells me one mixed development mall in Bukit Timah has repeatedly failed their air quality inspections and fire safety. To rectify and replace the core installations would cost $3-$5 million. I wonder if discussions are revived at their Council meetings.

It doesn’t matter if your MCST council choose to turn a blind eye, while the minority who insisted on doing right gets outvoted. When shit hits the fence, collectively all owners are responsible. Safety should never be compromised.

If your sinking funds are wafer thin, there are only two safe options.

1. Get all owners to agree to top-up from their own pockets. (Easier said than done?)

2. Shutdown the facility.

Decide quickly on which of the two before bickering over “How did we get to this?”. Matter of fact, you should have asked Is our condo running out of funds?” years ago. Read on about the poorly managed “Tyre Pancit” condo.

Evaluation of Property Managing Agent (MA) performance

Recently came across a detailed technical research on Managing Agents, written and published by Yung Yau and Daniel Chi. Skip the models and calculations if they don’t speak to you.

A few note-worthy excerpts:

“relationship between the board of directors and CEO is vulnerable to the classical principal-agent problems because of the diverse incentives of the two parties. The same also occurs in the case of MOH (Multi-owned homes a.k.a Strata) management. It is very common that PMAs (Property managing agents) act for their own benefits at the homeowners’ expense. Opportunistic PMAs may embezzle fund from the common financial pool (such as sinking fund and maintenance reserve) to their own pockets or make procurement decisions on their own instead of the homeowners. These malpractices of the PMAs have been widely reported in different parts of the world [29303132].

“Performance measurement and benchmarking are essential elements of strategic management. While there has been a large body of literature on benchmarking in the field of business management, little attention has been paid to benchmarking of housing or property management performance… various key performance indicators were employed or suggested in the literature for measuring or evaluating a PMA’s performance. These performance indicators or measures can be broadly classified into four types, namely input-based measures, output-based measures, process-based measures, and hybrid measures.”

Condo resident asks MA for transparency on facebook

A resident took to facebook group MCST and posted the following.

To which a few others replied…

I assume every seven years the residents re-accumulate the equivalent of 60% of their existing Sinking fund. Sounds like one of the following.

1. The condo has very few things to maintain, except for painting. 2. Condo is running out of funds after the paint job. (see previous post)

If only more residents start attending AGMs/ EOGMs, asking the right questions (“not the second parking lot”). Then will the prudent decisions be made.

As to Fand’s question about how an AGM can be conducted without sufficient owners. A quick reference to BCA will show you the criterion. See screenshot below.

Is your condo running out of funds? (part 2)

“Yah lar,” cries my friend over kopi. He laments the existing playground and landscaping are not properly maintained. Some parts of the rubber-floor lining had dislodged due to wear and tear. Nothing done. The greenery used to be tended by two gardeners, now only one.

Related posts: “How much for your green?”

But as he showed me the financial reports, I pointed out the total Strata funds are plentiful and robust. That is, the total of Sinking funds (SF) and Managing funds (MF).

How did I know? Well, let me show you a real-life example of one condo running out of funds. An almost twenty year old condo development in Upper Bukit Timah, I call “PanCit”. A relative had bought a unit and appointed me to take charge of it.

PanCit awakening from ten years of grandiose

In 2018, PanCit finally voted to raise their SF from $15 per share value to $25, and to increase MF from $72 per share value to $78. Managing agent had highlighted the operating deficit over the past two years. This resulted in drawing down from the existing MF. The SF had approximately $2.1 million(M). Taken together, total funds was $2.56M.

To put in perspective, this condo with about 350 units comprises of three blocks. Since TOP, the maintenance fees were largely unchanged. Annual contributions amounted to $1.16M for MF, and $0.24M for SF. Over the past 17 years, total collections are as shown below.

 Managing Funds (MF)Sinking Funds (SF)
Annual $1,160,000$240,000
17 years $19,720,000$4,080,000
Current $460,000$2,100,000
PanCit’s funds as of end year 2018

Most of the building, equipment and facilities were estimated to have a lifespan of 10-20 years. MA calculated weighted average of 16 years and projected $750,000 annual provision. In total that’s $12,000,000 replacement costs. It is already the 17th year. Assume all monies accumulated in SF since have been used for replacement. There is still a shortfall of $8,000,000.

MF isn’t doing too well either. The operating deficit raised earlier meant whatever was collected was spent, and more. No wonder both MF and SF were raised, albeit insignificantly, amounting to less than $260,000 annually.

How do we raise $8,000,000? Oh dear, now it’s clear. We could not afford those gardens, pools, guards, cleaners and fresh coat of paint for the past ten years. Not possible, unless we triple the recent increments from $260,000 to $780,000, ten years ago. We thought we could have our cake and eat it.

Related posts: “Sinking funds tell a tale of two cities”

Source: Jock McTavish on Quora

Is your condo running out of funds? (part 1)

During the circuit breaker period, tenants have been given rent reprieves to cope with the downturn. With the worsening of Singapore’s GDP (-13.2% for Q2 yoy), there is an on-going second round of retrenchments and pay-cuts. Some condo owners are finding themselves in financial difficulties. They have been asking for a reduction in MCST maintenance fees, which can amount to $250-$800 per month (depending on development size and facilities).

Council members review contributions and expenses continuously. I would say this is their biggest concern and main responsibility. Once a year, all owners are informed during AGM and given the opportunity to voice out regarding this matter. Therefore such contributions should either be sufficient or with a small buffer (in older and more conservative condos).

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No doubt construction cost is widening amongst Builders

Three months ago, our Minister of the multi-ministry taskforce on Covid mentioned he had no doubt that construction costs in Singapore will be higher because of new regulatory requirements. I was keeping my arms crossed (instead of fingers).

Earlier our condo MCST had agreed on carrying out renovation and repair works to the common areas and landscaping. This was in the beginning of 2020 but the tender was delayed due to the coronavirus. The list of works are as follows.

  1. Rewiring of some electrical cables (150m)
  2. Demolition of old BBQ pits and 1m low walls
  3. Replacement of paver stones approximately 1.2m along 120m trail
  4. Removal of debris

Our committee was expecting the full cost to be less than $6K, even after factoring labor constrains with the safety distancing measures. To our surprise, the quotes received this month were between $12K- $16K. I wonder how the figures are higher than 100%.

Somehow it reminds me of Pricing elasticity. Assume a huge inventory of Coffee Mugs that were written off previously, whether you sell 100 Mugs at $1, or 50 Mugs at $2 makes no difference to the underlying profits. Could the contractors be pricing Q3 works at double the price to make-up for zero projects in Q2?

Anyway we are not prepared to accept sky-high prices. Prefer to wait out and see. Meanwhile, I hear numerous small contractors are facing cashflow problems. Perhaps they fancy smaller projects with timely payments?

Don’t play play, ah!

There is a well-known quote by Warren Buffett about economic or financial crisis. “When the tide goes out do you discover who’s been swimming naked.” In recent years, I notice a rise in complaints against MCST council and Managing agents. To be fair, some are trivial issues voiced by overly-sensitive residents, while others can be as severe as mismanagement, extreme lack of financial prudence and even ‘hidden political agendas’.

Usually these are discussed openly in AGMs or in private with the MA. However in the current covid-19 crisis, many subsidiary proprietors (SPs) have found time to publicized their concerns on social media. I was told these pent-up frustrations have been accumulating for years in a number of condominiums around Singapore.

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Covid-19 demands Property Managing Agents to evolve

We are barely mid-way through the Covid outbreak. Nonetheless it is pressing to acknowledge the lasting impacts to social, business and daily lives. “At some point the COVID-19 crisis will end. But as was the case with the first and second world wars, the end of the crisis will not mark a return to normal. Rather, it will signal the advent of a new normal.”

The crisis presents an excellent opportunity for Property Managing Agents (MA) to step up their modus operandi. Some have resisted change for too long. Others have pushed for upgrades with an exorbitant price tag. Neither is in the best interest of residents. As chairman, I am constantly looking for MAs who can improve their efficiency and provide value.

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Minutes not accurate? Sia Suay, secretary.

The AGM is a serious meeting for all owners in the condo development. The agenda is set in advance and should be strictly adhered to. An example of the sequence can be found in BCA’s strata handbook:

♦ The election of council members

♦ A motion for the adoption of the financial statement for the past financial period

♦ A motion to confirm the minutes of the last general meeting

♦ Other motions for consideration

Thereafter the meeting is documented and reviewed by other members of the committee to verify. There is very little room for error when conducted clearly and transparently.

How is it that an MC secretary (who happens to be a practicing lawyer) cannot clearly record the meeting minutes?

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Drama over for Pine Grove?

I am glad the six month impasse has finally ended. “The keys to the management office were given to the new managing agent on Monday, after an all-day affair which saw the police called in for assistance.”

From all that has been reported in the media, the 22nd Management Council (MC) clearly raises my eyebrow when they tried to postpone AGM at the final hour. This is totally unacceptable. From my years of being MC Chairman, the AGM date cannot be rescheduled unless two criterion are met.

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Cleaners, our silent Heroes

Everyday we struggle a little under the constraining measures of the circuit breaker. We cannot visit shopping malls; they are closed. No dining with friends. Young ones bemoan no bubble tea. And even younger ones cry for their playgrounds. Only when we are done with the complaining, we begin to realise the important stuff that matters has continued as normal.

All around me, Food and Cleanliness is uninterrupted. Supermarkets operate. Hawkers and restaurants continue to feed take-away patrons and supply delivery riders. The condo estate remains clean and litter-free. Even the pathways are swept clear of fallen leaves every morning.

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Freehold condo on sale at $922psf showing signs of property stress

While volume of transactions has declined over the past few months, prices have only dipped 1.2% in the first quarter of 2020. Somehow the numbers do not match the gravity of Covid-19. Why so?

The illiquidity of properties makes it slow to price in market factors. It normally requires six to nine months of lag period to gradually adjust towards where majority of buyers are willing to match sellers.

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Glut of unsold condos to remain entrenched in 2020

There is a lot of unsold condos in Singapore way before Covid-19. To be exact, 31,948 units as of 30 Sept 2019, according to the Urban Redevelopment Authority. “Sales have averaged about 2,500 homes per quarter… and at that rate it will take almost four years to clear the backlog, “according to Ms Christine Li, head of research for Singapore and South-east Asia at Cushman & Wakefield. (Source: Bloomberg & Straits Times)

Singapore GDP Growth Rate
Singapore GDP growth quarter-over-quarter
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Condo Managing App provides transparency real-time

A french start-up is using an app to help owners manage their residential buildings, akin to strata titled condos in Singapore. Seems like a great solution for Condo owners who prefer to stay out of sight but in-the-loop.

“Matera has built a web-based platform to view information, communicate with other co-owners and make sure everything is up-to-date. Everybody has their own account and can access the platform. Co-owners meet regularly to handle outstanding issues. Matera centralizes all topics, helps you write a report and checks that it complies with legal requirements.

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Virus affirms assertive Condo and troubles AirBnb

According to the South China Morning Post, the latest update on the Wuhan virus is close to 4500 people infected in China, with 106 deaths. “In addition to air transmission, the coronavirus can be spread through physical contact, China’s National Health Commission (NHC) said on Tuesday” (SCMP 28 Jan 2020)

No doubt our government is highly concerned and has swiftly implemented measures to keep Singapore safe. These include tracking at risk personnel and keeping them quarantined. I recall the overly restrictive (but on hindsight, forward-looking) rules of People’s Park Complex. Last August they decided to track and restrict visitors for vice. I believe the residents now benefit from an additional layer of administrative protection from the Wuhan virus.

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Case study: Killer lifts?

Once in a while we hear of killer litter offences. Yet there is another high-rise danger lurking; the killer lifts are often forgotten. (Some say killer pools.) These silent killers have a stranglehold on our finances through high maintenance and a large one-off sum for replacement at the end of their life spans.

We look at an example of an almost two decade old condo in District 21, with approximately 341 units. In the AGM previously, a list of facilities were drawn up to highlight their replacement costs due in the coming 3-5 years. They amounted to almost $11.5 million!

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How much for your green?

Nowadays we see a lot of hype in green landscaping among condos. Kudos to the Building and Construction Authority (BCA) whom promoted sustainable development with the green mark schemes and incentives. Our air is fresher and the economics made great sense for developers.

Yet some condo owners are not cheering. On closer examination, the green maintenance costs are surprising. I have heard much woes from friends in different MCSTs. Take a look at this excerpt from The Straits Times, which sums its up.

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Condo maintenance pitfalls

 “too little, too late”

Petróleos Mexicanos (Pemex) is the state-owned petroleum company of Mexico. In its prime, Pemex had assets worth $415 billion. It was also the world’s second-largest non-publicly listed company in 2005.

Today, Pemex is the world’s most indebted oil company with $176 billion of debts and liabilities. The Mexican government announced a $5 billion bailout for the company this year. However analysts say it needs to invest at least $10-$13 billion a year.

How did that happened over less than 15 years? Well, in short, years of disregard and non-maintenance. This is similar to managing a condo. Take for example the following chain of events:

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