JCW

[Legality of the selling of condominiums with excessive accessory parcel (car parks) to a single purchaser – Whether owner of the condominiums can commercialise the accessory parcel (car parks) in renting the accessory parcel] Justin was the counsel for the Plaintiff, the Management Corporation (MC) of Palm Spring. This is a case involving the selling of 45 units of condominium to a single purchaser (“the Purchaser”) together with 439 car parks as accessory parcel attached to the units of condominium. In this case, the MC filed the action claiming that the extra car parks of 394 (439 car parks less 45) are common property of the condominium and it was given to the purchaser for no consideration. The MC alleges that the Purchaser is essentially carrying out car rental business in the condominium by renting the car parks to the residents for a fee. The MC had suffered serious prejudice as out of 2,449 car parks built, 2,180 car parks should have been given to 2,180 condominium units (as per the Development Order) and the 218 car parks allocated for the visitors and there should be 51 extra car park parcels. As such, the MC claimed that the giving of 394 car parks to the Purchaser is invalid and ought to be revoked as there is a breach of Development Order, breach of the Strata Title Act 1985, the extra car parks was not sold with consideration, the extra car parks given to the Purchaser is against public policy and the registration of the extra car parks in the strata title is void ab initio under the National Land Code and Strata Title Act 1985. The Court allowed the MC’s claim and held that: (i)The Development Order cannot override the contractual obligation and the agreement reached between the parties, so long as the contract or the consideration for the contract or the object was not illegal; (ii)The renting and/or the usage of the 394 extra car parks by the Purchaser was a ‘dealing’ of the accessory parcel was prohibited by s.34(2) and 69 of the Strata Title Act 1985. Therefore, it is illegal and the sale of the 394 extra car parks by the developer to the Purchaser shall be struck down pursuant to s. 24(b) of the Contracts Act 1950; The 394 extra car parks which are accessory parcels registered in the name of Purchaser becomes null and void and is defeasible under s.340 of the National Land Code.