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This post has been edited by Cheras Wong: Sep 19 2011, 07:45 PM

I intended to buy a low cost apartment. It is a sub-sale but it hasn't exceed 5 years. I heard that by law, the owner is not allow to sell his unit.
A friend of mine told me that's alright to buy over.
She mentioned to draft a THIRD PARTY agreement by lawyer and after 5 years the name can be transfer to me.
Are there such case? and is it legal to buy over?

Dear dariofoo

Much appreciate your advice on my scenario:

I have recently bought a condo which was just launched. I signed the S&P in May 2011 and expect to complete in 2014.
The S&P is based on the usual Schedule H format. The land is still under master title and is charged to Bangkok Bank by the developer. I have paid 10% upon signing the S&P and intended to use my own cash (without any loan) to pay balance 90% purchase price thru progress payments.

I have read recently in the paper that a lady, who is also a cash buyer, is unable to sell her shops as she did not obtain the letter of release from the developer's finanacier when she fully settled the purchase price.

In order to protect my interest as a cash buyer, what actions should I take?
What is a letter of release?
Normally a purchaser's financier will request a letter of undertaking from the developer to refund in the event the MOT cannot be resistered in favour of the purchaser. Can I, as a cash buyer, request a similar letter of undertaking? If the developer refuses to give such a letter of undertaking, what should I do to make sure the title (strata) will be registered in my favour if I have settled in full all the progress payment as provided in the S&P?

Thanks in advance.

Dario,i ask my lawyer friend,he say cant take action because in the agreement not written anything related to leaking or defects.

he said this not apply but u say yes

"in the event of any material change in the condition state nature or character of the property between the date of this agreement and the delivery date,the vendors shall forthwith make good the same at the vensdors own cost and expense."

My friend say this clause not cover leaking

how?
diffrerent lawyer different opinion

Wouldn't the car park be marked in the plan annexed to the SPA? Did you check the whole SPA before you signed it? Or did they just give you one single page to sign?

Anyway, you've signed it, the developer will sign it, and get it stamped for RM10. Even if there were missing pages they can just insert it now that you've 'raised the alarm'.

Yes it is standard for them to stamp it first before giving a copy back to you.

There's a binding contract already. You can't back out of it at this stage, unfortunately.

This post has been edited by dariofoo: Sep 20 2011, 02:28 AM

Whether there are restrictions placed on transferring or assigning the property would depend on the principal SPA. That is the only way of ascertaining. Without the benefit of a copy of the SPA, I can't advice you any further in this.

What your friend meant was probably a deed of trust. But it would work if you're buying by way of cash only. Such agreements would be null and void as it contravenes the principal SPA (if the principal SPA indeed contains a clause which prohibits it).'

So if there is such a clause, you bear the risk of it if you decide to proceed to "purchase" it. Do more research before taking the big plunge.




This post has been edited by dariofoo: Sep 20 2011, 02:33 AM

Dear all,

Thank you for your patience.

Shall answer the rest of the queries tomorrow.

Nites.

This post has been edited by dariofoo: Sep 20 2011, 02:34 AM

The document you are referring to is the letter of disclaimer.

Letter of disclaimer is where the end-financier disclaims all rights over your particular unit. When there is a charge on the master title, and subsequently when the strata title is issued, all strata title units will have the charge registered upon it as well. Basically one charge has split into 200-300 'small' charges. As such, when there is a letter of disclaimer, a discharge of charge would be executed by the end-financier, thus releasing the strata title from any encumbrances entered due to the master charge. This will allow the purchaser to obtain a loan and charge it to his financier in exchange for a loan.

Now, after execution of SPA, your lawyer will write to the developer and the end-financier for a redemption statement (RS). The RS will state as to how much is due and owing to the end-financier by the developer with regard to your unit. The developer may also state therein to forward xxx amount to the end financier with regard to part of the progressive payment as their end-financing has to be paid off first before any money can be paid to them directly.

As such, perhaps the following 30% (example only) would go to the end-financier to redeem the end-financing with regard to your unit. Upon full settlement, the end-financier would issue the letter of disclaimer. Sometimes, a statement with the effect of a disclaimer is already issued in the redemption statement - and it will state that the Bank would disclaim all rights over the unit subject to receipt of payment of xxx amount by the purchaser. So once full payment has been made and there's evidence of same, the disclaimer comes into effect immediately.

I do not understand why the lady in that case did not obtain the disclaimer from the bank. There is no reason why the bank ought to withhold same.

In your case, there is no need for a LOU as there would be a clause in your SPA to this effect:
Separate strata title and transfer of title
11. (1) The Vendor shall, at its own cost and expense and as expeditiously as
possible, apply for subdivision of the said Building so as to obtain the issue of a
separate strata title to the said Parcel under the Strata Titles Act 1985.
(2) Upon the issuance of the strata title to the said Parcel and subject to the
payment of the purchase price by the Purchaser to the Vendor in accordance with
subclause 4(1) and the observance of all the terms and conditions herein provided, the
Vendor shall, within twenty-one (21) days, execute a valid and registrable memorandum
of transfer of the said Parcel to the Purchaser, his heir or nominee or lawful assign, as the
case may be.

That is good enough to protect your interests, so don't worry.

The bank (if you take a loan), on the other hand, does not have any contractual relationship with the developer. The bank is not privy to your SPA. If the MOT cannot be perfected later, the charge in favour of the bank would also not be able to be registered. The bank's position would not be secured. As such, the bank would require a LOU from the developer initially in order to protect its interests at a later stage.

Hope the above helps.

Of course different professionals will have different opinions. You must also bear in mind that my opinion is given without the benefit of perusing through documents and is based on the piecemeal information given by you from time to time.

Most of the time the clients wants someone who shares the same opinion with them. If you feel strongly that you can sue the vendor for breach of contract and rescind (cancel) the contract, perhaps you need to seek out another opinion which is same as yours, then perhaps he/she can take up your case and proceed from there.

Good luck ya

Hi dariofoo

Thanks a lot. Your advice is very informative. Just few more queries.

The laywer who prepared the S&P was the developer's lawyer, ie a common solicitor. In this case, should I get another lawyer to write to the developer and end-financier to obtain the RS and subsequently the letter of disclaimer?

Based on your advice, my interest should be well protected with this letter of disclaimer after I settled the redemption sum to the end-financier?

Also, do I need to pay the remaining 90% purchase price to this lawyer as a stakeholder who will release to the end-financier and developer respectively or, I could handle the progress payment myself and the lawyer just need to help me to write to the developer/end-financier to request the RS & letter of disclaimer? What is the pros and cons of these two options? How much will be the legal fees (just an indication) if my purchase pirce is RM350k? (note: I have downloaded the SR2005 that you posted earlier but I could find any clue from there)

Once again, thanks.

Hi DariaFoo,

My father wants to transfer the house to me. It is a landed properly, fully paid with title in hand.

Would you be able to advise what should I do?


Thx

Dario ,1 question for redemption sum.how the redemption sum being paid?

is it the redemption sum is fully paid by bank first to redeem the title or add together with differential sum i paid earlier to the lawyer ?they will use my money(differential sum) first or the bank pay first while my money stil with lawyer ?

Check whether are they representing the developer or representing you. Sometimes it is stated as representing the purchaser. In that case, that lawyer can write to the developer and end financier.

Otherwise, it would be prudent to appoint your own lawyer as I doubt if you can write the relevant letters on your own.

Yes. The letter of disclaimer is quite standard and straightforward. Most banks issue you the disclaimer immediately in the redemption statement - i.e. the disclaimer is subject to settlemenet of redemption sum of XXXX. So there's no need to wait for another letter after that.

No. You can just issue your own cheque paid out directly to the developer as and when the progressive payments are due and the notice for same is issued to you.

There's a link to a site where you can just key in the purchase price and the scaled fees would appear. The SRO takes a bit of getting used to sometimes. For a property worth RM350K, scaled fees are RM2900.00. Since this is a HDA transaction the max charge allowed is 70% of scaled fees, so it is RM2030.00. There might be some slight disbursements incurred - for transport, papers, fax, courier, tel, misc. Differs from firm to firm but should not be more than RM200.00

The above fees included vetting and preparation of SPA as well. Since that has already been done, your solicitor would need to write the relevant letters and assist you to forward the cheques to the developer as and when same is due. That's about it.

dariofoo should entitle an elite tag for all his contribution here.

Hi Dario, I have a tenant that is very bad paymaster. He always pay up late (after 7th day, sometimes a month late), and he only pay if I actually follow up my rental collection.(if I didnt he wouldnt pay) He could drag the utility bill for a few months only to pay.(only if I follow up and make noise)

but the tenancy agreement is about to end soon in a couple of months later. Seeing it that he is such a bad paymaster he could do these.

1. Assume the deposit as the remaining rental. which I know the deposit cannot be taken as rental as said in agreement but usually lousy tenant practice this.
2. Drag a few months utility bill b4 the tenancy end.
3. The Damages of my property is unlikely to be enough to cover by deposit & he could play evil and request me to take the deposit to repair whatever the damage. With that + owning me 1 month rental(if he refuse to pay the last month) + utility bill I'm gonna lose a lot from there.

I am fear that my only 1.5 months deposit(1m rental deposit + half month utility) is too small to cover everything looking at his bad paymaster I am on the losing side, no matter how u see it.

Looking at situation like this since he is a bad paymaster *usually after 7th day, and drag utility bill. I could use his mistake bad paymaster to kick him out b4 agreement ends. *btw, is there a practice that the tenancy void if the tenant do not pay utility bill only? Can I use this utility bill against him as well?

the cons is if I ask a lawyer to notice (usually 1 month), usually mean *informing him that I no longer want him, he could easily disappear with a whole month of rental + a few months of utility bill. Who will be bear the cost for my loss rental income during this 1 month notice + lawyer fees + utility? Can I ask him to bare all these?

how will u suggest me to do to remedy this problem b4 it gets too late. I got the feeling that he will hold the payment up b4 the tenancy end *especially the utility. I just want to minimize my losses.

___________________________________________

Have anyone here heard of tenancy agreement with a penalty for rental late payment? I am tired of chasing my tenant paying my rental ontime every month.

You need to appoint a lawyer who will prepare a simple letter confirming the intent to transfer with love and affection as consideration. Then the MOT will be submitted for adjudication of stamp duty.

There won't be any stamp duty as it is a transfer with love and affection as consideration.

Once transferred, a new title will be issued.

Quite straightforward.

It depends - is the redemption sum more than your loan sum? If more than loan sum of course your differential sum will be used to as top up to cover the redemption sum.

If redemption sum less than your loan sum then loan sum will be disbursed first. Diff sum will be paid in the end with the balance purchase price.

billytong:


What you can or cannot do will all be stipulated in the tenancy agreement. Yes there would usually be a clause that in default of rent (usually when it falls on the 7th of each month), the landlord has to give notice of default to the tenant, and if the tenant still does not make payment, the landlord has the right to re-enter the premises and take vacant possession of same.

However, the right of re-entering the premises is difficult to execute in reality as there would be a padlock at the gate/main grill. The landlord's right does not go up to the point where he can cut the padlocks to effect entry. That, in my opinion, would amount to trespass to property.

As such, if you serve a notice of eviction (with 1 month's notice) and if the tenant does not move out, you have two choices:

1) Straight way - instruct the lawyer to file a writ of distress - to obtain vacant possession and claim for double rent (mesne profits). This may take time - depends on the efficiency of your lawyer as well as the Court.

2) Not-so-straight way - cut off utilities, place another padlock and chain at the grill/gate, instruct management to block/cancel access card, etc etc. The list is endless. This may be instantaneous in its effect, but this is self-help and is contrary to law.

With regard to penalty for late payment of rental/utilities and other measures in relation thereto, do check out the discussion in this thread. The points by bro Hansel are worth a read:

http://forum.lowyat.net/topic/2027543



This post has been edited by dariofoo: Sep 20 2011, 09:51 PM

Dario,during the discharge of charge,my lawyer told me there are discrepencies on the bank 1st charge on the land.what is this mean?will it affected the sale ?Help me

Sorry bro, if I do not have sight of the charge, I can't tell you what discrepancies your lawyer is referring to. What I can tell you is that if there are discrepancies (or mistakes), surely the charge would not have been registered successfully and the existing financier would not have disbursed the loan sum in the first place.

You would be better off to meet your lawyer personally and get more details off what he is trying to say.

Of course, if the discharge of charge cannot be registered, it will be a delay on the vendor's side to complete the transaction and as such, the completion date would be extended in favour of the purchaser.

You didn't mention which side of the fence you are on, so I hope you're on the right one.

Cheers.

Hi Dario, forgive me for either I have bad English or I miss something in the thread. The thread does seems to be very helpful for dealing with TNB. but I couldnt find any penalty related discussion toward tenant if she/he pay late. I do wish to impose penalty fees on any late rental utility payment, as I am getting tired of chasing rental every month, it seems having a penalty is only as good as to discourage them to pay late.

1. Could I impose a penalty fee for late payment on a new tenancy agreement? is that legal? In your own professional experience, have u seen some tenancy agreement in practice?
2. Can I put a clause that if the tenant did not pay up the utility bill, I have the right to void the tenancy agreement?

*I still have one ex-tenant that owe me almost RM2K utility, as the way I see it there is no way I could get back my money. I really hate to repeat this -.-


1) In such all lawyer fees + other expenses incurred due to the 1 month notice, can I ask the court to include this on the claim as well?
2.) What about the tenant did move out during that 1 month notice. And he still owe me more than the deposit he has on me, is there anyway to claim back the remaining if he refuse to pay?

Once again I really thank you for your time and your professional advices.

This post has been edited by billytong: Sep 21 2011, 09:56 AM