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Offers fail to impress Lotus owners

COMPENSATION proposals for the owners of apartments in the 10 buildings near the toppled block in Shanghai's Minhang District failed to win their approval yesterday.

Negotiations due to take place at the Southwest Engineering School, where hundreds of owners were put into 10 classrooms, turned out to be a group discussion among them while representatives of the developer explained the offers via the classroom radio system rather than in face-to-face talks.

There had been chaos the day before when owners of apartments in the toppled No. 7 building in the Lotus Riverside complex and representatives of the developer met to discuss compensation.

Yesterday's "meeting" remained calm, however.

The developer, Shanghai Meidu Real Estate Co, presented three compensation options for the owners yesterday.

Under option 1, buyers will get a 5 percent reduction on the initial price of the apartment if they agree to continue their contract.

But if the 10 buildings fail to meet national standards, owners can enjoy the same deal offered to buyers of the No. 7 building which collapsed on June 27 - a refund plus interest and a 5 percent penalty bonus of the initial price of the apartment or an exchange for an unsold apartment in the complex plus the 5 percent penalty bonus.

The developer will also hire a company to guarantee payments to the owners.

Under option 2, the owners can terminate the contract and be refunded the money paid and the interest.

Under option 3, the buyers can sell their apartments to another company at the June 27 price. The developer is to release the name of the purchasing company this month.

The government will participate in the selection of the company, said Zhang Pengfeng, a lawyer entrusted by the local government as third party in the negotiations. He described the yet-to-be-named company as a "white knight."

"Both sides should cherish the opportunity to negotiate," Zhang said. "Court litigation is the last thing we want to see."

Precise details of all three offers will be announced on July 31 with apartment owners required to make their decision between August 1 and August 15.

But the offers found few takers yesterday, and the owners submitted a list of their requirements to the government.

"The compensation is far from enough," said Cai Jun, who bought an apartment at 17,300 yuan (US$2,533) per square meter in the No. 6 building, which had been found to be leaning by several centimeters. "The building should be demolished for a new one."

Others wanted the government to take over the issue and draft compensation plans.

"I want a new apartment in the same area around the complex," said another buyer identified as Max who sold his old home and had planned to get married in the new apartment. "All I care about is a house for home."

Meanwhile, the developer said it would ask a construction quality inspection institution to check the remaining 10 buildings and release test results as soon as possible.

The institution would also supervise the rest of the construction to ensure it meet state requirements.

Apartment owners will be allowed to participate in the checks if the inspection institution agreed, or they could appoint other institutions if they have questions about the one hired by the developer.

Meanwhile, the site of the toppled building is to be used for greenery and public facilities, and plans will be submitted to the city's urban construction authority, according to the developer.

Talks between the owners of the toppled building and the developer are continuing.

Heads of the developer were "under control by judicial departments," the Minhang government said, but it didn't clarify what the term meant.


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