Maintenance costs considerations may have earned Nicon Gardens PUB fine

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Are high maintenance costs considerations the major reason why Nicon Gardens condominium failed to maintain their water service installations? PUB said today that it issued a composition fine of $2,000 to Nicon Gardens condominium management for failing to comply with notices to repair a service pipe which leaked for four days. This resulted in a loss of about 4,000 cubic metres of water. This amount of water can fill about 1.5 Olympic-sized swimming pools and is about four times the entire condominium’s average monthly water usage.

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In the evening of Thursday 28 June 2018, PUB received public feedback on water leakage at Nicon Gardens located at Choa Chu Kang Road and immediately despatched our officers onsite. Overnight investigations revealed that it was an underground service pipe leak within the Nicon Gardens compound, which is maintained by the condominium management. PUB instructed the management to rectify the leak immediately to stem the water wastage. To facilitate quick repairs, PUB provided them with a list of licensed plumbers to engage. Over the following two days, PUB carried out site inspections and gave repeated reminders to the management to expedite repairs. Residents also called to enquire about the follow-up. However, the management still failed to comply.

PUB issued a total of three notices to Nicon Gardens management from Friday 29 June to Monday 2 July to repair the leak immediately and prevent further water wastage. Repairs were eventually carried out only on Monday 2 July, four days after the leak was first reported.

“We find such deliberate water wastage unacceptable. Water is a precious resource in Singapore and everybody must do his part to conserve it. The supply of good, clean water in Singapore must never be taken for granted. Nicon Gardens’ failure to act quickly in this instance has led to a large amount of water wastage. Nicon Gardens wasted four months’ worth of water in just four days due to its inaction, despite repeated instructions from PUB to fix the leak”, said Ridzuan Ismail, Director, Water Supply (Network) Department, PUB.

Failure to comply with notice to repair leak is an offence

It is the responsibility of premises owners to maintain their water service installations. Any leaks must be repaired immediately as they may lead to water wastage and supply disruptions to customers. If they fail to do so, PUB will not hesitate to take action against the responsible parties for non-compliance.

Failure to comply with a PUB notice to repair a water service installation is an offence under regulation 15(3) of the Public Utilities (Water Supply) Regulations. As this is its first offence, Nicon Gardens management was offered to compound the offence for a sum of $2,000. The maximum penalty for the offence is a fine not exceeding $10,000 or imprisonment for a term not exceeding 12 months or both.

Nicon Gardens was put up for collective sale

maintenance costs
picture credit: ERA Realty

Nicon Gardens a 99-years leasehold development located at 61 – 71G Choa Chu Kang Road and was launched for collective sale in March 2018. The property consisting of 47 townhouse units and completed in 1981, has 62 years left on its lease.

Nicon Gardens is zoned for three-storey semi-detached landed housing under the Master Plan 2014 and is situated on elevated land with 164,469.61 sq ft. Potential developers can build about 50 to 68 three-storey strata semi-detached houses on the site, subject to URA’s planning approval.

The property’s marketing agent for the sale ERA said then: “The sale committee is expecting strong interest from developers as there wasn’t any Government Land Sale for landed housing in Singapore over the past few years, especially in the vicinity.”

With more than 80 per cent of the owners consenting to the collective sale at the minimum of $110 million, each owner was expected to receive about $2.3 million, which works out to around $669 psf on the land area. The tender exercise closed on 18 April, it is unclear if the sale went through.

En bloc a cure for ageing properties

En bloc sale is sometimes viewed as a cure for mounting maintenance costs for an ageing property reaching a critical half-life milestone in their leases.

One letter writer to the Straits Times forum page suggested that maintenance costs could be a major factor why owners of older properties try to sell their development in a collective sale.

The letter writer, Kumar Pillay Thangavalu, said:

“Based on past sales, many of the estates that have been sold en bloc are mature ones, or at least 30 years old. Such estates are usually in dire need of maintenance, which can be very costly. Residents may be looking for an out as they do not want to spend exorbitant amounts on maintenance.
When the opportunity to sell en bloc arises, it is worthwhile to act, as many estates have a lease period of 99 years, with prices of individual units starting to fall once the estate has reached a certain age. There is no reason for earnings from collective sales to be taxed, as when a home is sold at a high price, a new home likely has to be bought at a high price too.”

The high maintenance costs are cited as one major reason why the owners of iconic Pearl Bank Apartments were put up for sale.

“While Pearl Bank Apartments – completed in 1976 – has been a visible landmark in Outram, the ageing building no longer adequately meets the residents’ needs, and the maintenance costs involved to upkeep the premises are high,” Pearl Bank Management Corporation Strata Title (MCST) chairman Cecilia Seet said when the development was launched for collective sale in February 2018.

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