万科托管“倒楼小区”未倒楼可按市价收购
Vanke Named Trustee for “Collapsed Building Apartment Complex”
Remaining Buildings Can be Sold Back at Market Price
http://epaper.dfdaily.com/dfzb/html/2009-08/01/content_149183.htm
OMP reporter Li Meng
August 1, 2009
This headline appeared on the front page of the Oriental Morning Post today. Vanke is one of the largest real estate companies in China, and its head, Wang Shi, is an entrepreneurial hero (see previous posts on him during Wenchuan earthquake) in China and has climbed Mount Everest. The article reports that Shanghai Vanke will take over as “third party trustee” for Lotus Riverside, the apartment complex where a building collapsed in the Minhang (not Minxing) District of Shanghai on June 27, 2009.
Note: I have noticed that people are referring to the Lotus Riverside apartments in “Minxing” district. Sorry, but the character can be read as both “xing” and “hang”. As anyone in Shanghai knows (or should), there is no such thing as Minxing district, only Minhang District. In fact Minhang District is one of the oldest areas of Shanghai. The majority of people moved to “central” Shanghai 150 years ago—Shanghai is a “new” city in China. However, several hundred years ago, the whole area belonged to Jiangsu Province, and the only two areas of human settlement were “Old Minhang” and Chongming Island. Just FYI – “Minxing” is major linguistic error. :-)
(See the original Chinese version for photograph of collapsed building).
The “Lotus Riverside” apartment complex, where an entire building collapsed in an accident, will be entrusted to a third party, the well-known Vanke Real Estate.
For the buildings that have not collapsed, Meidu Real Estate Company has outlined specific guidelines for three solutions to resolve the issue: owners can choose to have a 5% discount on price and continue with their contracts; they can cancel the contract and have all interest repaid; or they can have their apartment bought by Vanke for the market value on June 27, 2009.
Owners Must Decide Before August 15
Last night at 7:30, the Minhang District news office held its 13th news conference on the collapse of a building during construction of the “Lotus Riverside” apartment complex.
In addition to a complete listing of “Operating Guidelines for Outlined Solutions Concerning Buildings Sold in Advance that Did Not Collapse” issued by Meidu Real Estate Company, the news conference also clearly mentioned that Shanghai Vanke Real Estate Company, Limited would be the third party trustee for finishing construction of the apartment complex.
On July 20, Meidu Company announced “Outlined Solutions Concerning Buildings Sold in Advance that Did Not Collapse” to the public, giving three methods for carrying out contracts. But the solutions were clear at the time that the guidelines for the three solutions would be announced on July 31, and owners could make their decision between August 1 and August 15, 2009.
“Operating Guidelines” contains some additions and goes further in description for the three solutions already announced.
Vanke Will Hand Over Apartments Before May 31 of Next Year
As the third party trustee of “Lotus Riverside”, Shanghai Vanke Real Estate Company, Limited yesterday issued a “Notification”. It contained a guarantee that “apartments with quality up to standard will be handed over before May 31, 2009 as stated in the sold-in-advance contracts.”
Vanke mentioned that the company was invited by Meidi Company to be the third party trustee for the apartment complex construction of Lotus Riverside. Vanke will “assemble a competent team and use much effort and technique to ensure the continued construction of Lotus Riverside.” This company will also provide enthusiastic service to the public and customers, taking on all social responsibility.
Vanke thinks that the Lotus Riverside apartment complex is located in a superior site and has a nice environment. Because of this, Vanke is confident in its ability to ensure improvement of the apartment complex’s environment and construction quality. It will not fail to live up to the expectations of all its customers for a Vanke-quality apartment complex.
At the same time, Vanke expressed that it will work with Meidu Company in the appropriate handling of contracts for housing sold in advance as stated in “Operating Guidelines for Outlined Solutions Concerning Buildings Sold in Advance that Did Not Collapse”.
Solution 1: Return of 5%, Continued Fulfillment of the Sold in Advance Contract
Vanke guarantees that if an apartment cannot be handed over because its structure is not up to standards, the purchaser can cancel the sale-in-advance contract.
For those who choose solution one, Meidu Company will negotiate and sign a “Supplement to the Sale-in-Advance Contract”, and the supplemental agreement will include the following:
1. As a precondition to the purchaser continuing to fulfill their contract, Meidu Company will give up an appropriate amount of profit, that is, give a 5% discount on the total housing price specified in the “Sale-in-advance Contract”. Within 10 working days of signing, Meidu will pay the money into an account designated by the purchaser.
2. Meidu Company promises to continue to fulfill its tasks outlined in the “Sale-in-Advance Contract” according to specified time limits.
3. If the apartment cannot be handed over because its structure is not up to standards, the purchaser can cancel the sale-in-advance contract and their obligations based on entitlements specified in “Solutions for the Collapse of Lotus Riverside Building 7 Incident” and its “Operating Guidelines”.
4. If the above situation occurs, the purchaser has the right, according to “Solutions for the Collapse of Lotus Riverside Building 7 Incident” and its “Operating Guidelines”, to receive reimbursement for losses or compensation for contract violation. Meidu Company agrees to pay reimbursement or compensation, minus the 5% discount already paid, to the purchaser.
5. Because the purchaser choose and executed “Solutions for the Collapse of Lotus Riverside Building 7 Incident” and its “Operating Guidelines” which involve the market value of the apartment, government departments will decide on a organization for this evaluation.
When the “Supplement to the Sale-in-Advance Contract” is signed, Meidu Company will add Shanghai Vanke Real Estate Company, Limited who will also sign the “Supplement to the Sale-in-Advance Contract” and a “Letter of Commitment” with the purchaser. This guarantees that if the apartment cannot be handed over because its structure is not up to standards, the purchaser can choose to execute “Solutions for the Collapse of Lotus Riverside Building 7 Incident” and its “Operating Guidelines” allowing payback to purchaser within a specified time frame (from June 27, 2009 to the end of “Loan Contract” fulfillment date) of all bank interest and public accumulation fund interest on loans. If Meidu Company does not have the funds to pay, Vanke Company guarantees that it will pay.
Solution 2: Negotiate Cancellation of Sale-in-Advance Contract, Return Loan and Interest
Refunded amount = [the principal amount already paid by the purchaser (including paid by self and on loan) + bank deposit interest on amount of apartment price already paid] – loan principal and interest already paid on behalf of the purchaser by the Company to the loan bank and/or the public accumulation fund center.
1. For the purchaser who chooses solution two, Meidu Company will negotiate to cancel the “sale-in-advance contract” and “loan contract” with the loan bank, the public accumulation fund center, and (if necessary) the Shanghai Estate Guarantee Company, Limited [www.jiae.com.cn].
2. An agreement will be reached through negotiation with all parties and Meidu Company will sign an “Agreement to Cancel the Sale-in-Advance Contract” with the purchaser. Meidu Company will also sign an “Agreement to Cancel the Loan Contract” with the purchaser, the loan bank, the public accumulation fund center and (if necessary) the Shanghai Estate Guarantee Company, Limited.
3. After signing the “Agreement to Cancel the Sale-in-Advance Contract” and the “Agreement to Cancel the Loan Contract”, Meidu Company will pay all interest incurred by the purchaser that has not been paid as specified in the “Agreement to Cancel the Loan Contract”. Meidu Company will also directly pay funds into the loan bank and/or the public accumulation fund center accounts.
4. From the registration of the notice to cancel the “Sale-in-Advance Contract” and completion of the registration to cancel the mortgage in the “Loan Contract”, within 10 working days, Meidu Company will pay the “due sum of money” to the purchaser via the bank account indicated in the “Agreement to Cancel the Sale-in-Advance Contract”:
The “due sum of money” = [the principal amount already paid by the purchaser (including paid by self and on loan) + bank deposit interest on amount of apartment price already paid] – loan principal and interest already paid by the Company to the loan bank and/or the public accumulation fund center on behalf of the purchaser.
Solution 3: According to the Market Price on June 27, Vanke Purchases the Apartment
The market price differential = the market price as appraised on June 27, 2009 – the total price in the “Sale-in-Advance Contract”.
1. Government departments will appoint an appraiser with valid qualifications who, on August 15, 2009, will appraise the market value of the purchased apartment on June 27, 2009 for those who choose solution three, as well as issue an appraisal report.
2. After the above appraisal report comes out, Meidu Company will negotiate arrangements for the sale with Vanke Company who will return the money to the purchaser who choose solution three. In addition, Meidu Company will also negotiate the cancellation of the “Sale-in-Advance Contract” and the “Loan Contract” with the loan bank, the public accumulation fund center, and (if necessary) the Shanghai Estate Guarantee Company, Limited.
3. Once an agreement has been reached with all parties, Meidu Company will sign a “Third Party Agreement” with the purchaser and Vanke Company to pay back the money. Meidu will also sign an “Agreement to Cancel the Sale-in-Advance Contract” with the purchaser, and an “Agreement to Cancel the Loan Contract” with the purchaser, the loan bank, the public accumulation fund center and (if necessary) the Shanghai Estate Guarantee Company, Limited.
4. After the “Third Party Agreement”, the “Agreement to Cancel the Sale-in-Advance Contract”, and the “Agreement to Cancel the Loan Contract” are signed, Vanke Company pledges to pay any outstanding loans and interest directly to the bank accounts at loan bank and/or the public accumulation fund center as specified in the Third Party Agreement”, and the “Agreement to Cancel the Loan Contract”.
5. After the “Third Party Agreement”, the “Agreement to Cancel the Sale-in-Advance Contract”, and the “Agreement to Cancel the Loan Contract” are signed, and within ten working days of the completion of the condition below, Vanke Company guarantees to pay the “due sum of money” to the purchaser into the bank account specified in the “Third Party Agreement”.
The purchaser, the loan bank, the public accumulation fund center, and (if necessary) the Shanghai Estate Guarantee Company, Limited must complete the registration of notice to cancel the “Sale-in-Advance Contract” and registration of the cancellation of the mortgage in the “Loan Contract”.
6. The “due sum of money” mentioned in the previous item = [the amount already paid by the purchaser (including paid by self and on loan) + market price differential] – principal and interest paid by the Company on behalf of the purchaser to the loan bank and/or the public accumulation fund center.
7. The “market price differential” mentioned in the previous item = the appraised total market value of the apartment on June 27, 2009 – the total price of the apartment in the “Sale-in-Advance Contract”.
At the same time, Meidu Company announced that, as of yesterday, it had sent by mail copies of the “Guidelines” to purchasers. After purchasers receive the “Operating Guidelines”, they can fill out the “Solution Selection Form” and mail it back to “Riverside Lotus” Sales Center, 599 Luoyang Road, Shanghai (Zip: 201100) before August 15, 2009.
