Hi Dario,

I need you advice. I got a problem buying a condo. I'm buying a condo from a direct owner two months ago. After inspection of the house, vendor give me two weeks to find a loan. And he did not receive any deposit from me. Then I have secured the bank loan (signed the letter of offer) and my lawyer has prepared the S&P draft and has been revised for one time. Now, the S&P is still pending some info ( I think it is related to bank) from the vendor. The vendor had also verbally agreed to let us move into the house next year April by renting his house.

I was trying to call the vendor this two weeks to ask him to give the related info to my lawyer but he did not answer my phone.

Today I received a SMS from his wife saying they will NOT be selling the house as this moment due to they are unable to get transfer of school of their daughter, unable to find a house yet and they miss calculate the penalty the bank impose if they make early settlement. They never tell me that if any above happens, they will cancel the sales

The whole process has wasted my two months time.

My questions are:
1) If I cancel the loan now, do I need to pay the penalty or legal fees?
2) What about fees for S&P?
3) What is your best suggestion for the above? I really wish to get the house.
4) Can I ask the vendor to pay for the compensation for my damages (e.g. legal fees)?

Thanks!

This post has been edited by webber: Sep 21 2011, 11:36 AM

Thank you so much for that advise. Just one quick question, do i need to know the market value of the house? and any idea what are the estimated charges for Lawyer fee?


Thx once again

No no your English is more than fine. The suggestion by bro Hansel in that thread is to disconnect the electricity when payment by the tenant with regard to same is overdue. That is provided for in the tenancy. In a way, it is a penalty, although not in monetary form. The thread was just to point out another option for you.

No worries.

Back to your queries:
1. Yes you can. How much is between you and the tenant. As long as both parties agree, why not? It is legal. No, I've never seen such a late payment penalty being imposed on the tenant. It is not a usual term which is inserted. The usual term basically gives the right to the landlord to terminate the contract in the event of late payment of rent.

Bear this in mind - if you want to impose a penalty on late payment, would it make a difference if the tenant still refuses to pay? The amount will just accumulate. That is why bro Hansel's idea of having a clause which permits the landlord to instruct TNB to disconnect in the event of late payment of bills does sound like a good idea, provided you can find the time to track your account online and write the necessary letters to TNB.

2. Yes, you can. Once again, this is the term which both parties agree. However, you must be careful with drafting of the terms as what amounts to non-payment of utilities must be properly defined. The line must be drawn clearly. This is also not a common term which is inserted in tenancy agreements. Most of the time, the deposit shall be forfeited in the event of any outstanding utility bills at the end of the tenancy period.

1.Yes, the court will order the defendant (tenant) to pay costs to you but it will not be the exact sum which you paid your lawyer. Let's say the fees paid are RM5K. The Court may just decide to award RM3K. With regard to other expenses, what do you mean? Any examples?

2. Yes , you can still claim for any oustanding sum due and owing by him and you have to do it by way of a civil suit in Court.

webber:


1) If the SPA is aborted, the letter of offer is of no effect. By right, the bank ought not charge you anything. Check if anything is stated in the letter of offer. If nothing, check with your mortgage agent.

2) Normally if SPA is aborted then half of professional fees is charged and disbursements incurred only (which is not much - perhaps the relevant searches, letter of confirmation,etc). Some solicitors are gracious enough to just waive whatever fees on the condition that you still appoint them for the next purchase (as you would still need a lawyer then). Some are more "demanding" and would demand to be paid for work done. But don't be fooled into paying them in full.

3) You did not even pay a single cent to the vendor? In that case, there is no consideration (in monetary form) passing from you to him, and thus, it would be difficult to establish a contract to sell. Any booking form/letter of offer to purchase?

Any other factors? Any correspondence by the vendor to your lawyer with regard to the draft SPA? At least something to acknowledge his intention to sell.

If there were correspondence between your lawyer and him, then he can't deny that you have taken steps to prepare the SPA with the intention to create legal relations. As such, that would be a point in your favour.

I can't suggest more as I do not have all the facts before me.

4) If he still refuses to sell you have the option to send him a letter of demand to compel him to do so, or in the alternative (if you just want to give up and move on), claim for damages for costs incurred (legal fees, bank penalty [if any]) .

Yes you would need to find out the market rate. Legal fees would be based on the market rate and is scaled. You can use the legal calculator at the first page to do a quick check.

The bank said that they checked and found another charge on the property.thats why cant release the discharge of charge at the moment .What is this mean ?in this case how long it will take as the buyer financier already pay the redemption sum .

This post has been edited by ken8120: Sep 21 2011, 02:37 PM

Thanks a lot!

I didn't pay any cents because he mentioned no need and we can proceed to SPA if we able to secure a loan within 14 days. He has no lawyer to represent him in this sale. He did review the SPA and ask me (via email) to amend some of the terms (about the duration we can wait until his name is on the title). He did give us his previous SPA (to apply loan) and my lawyer did contact his loan solicitor to get SPA(s) and title document. He also agreed (via email) to give us the presentation number after he has submitted his MOT for name transfer from developer to his name.

In this case, if I send him a letter of demand to compel and he still to refuse to sell , what can I do?

Hi Dario,

I need your advise as well. My SPA Lawyer had quoted me RM4.8k only for SnP and Stamp Duty however from the 1st page when i inserted the figure it came up to RM7.1k. So is that possible to have such difference in the margin?

On top of that, now that i was being offered a home loan and the Bank Lawyer fee which i need to pay is RM4.8k. Do i pay them the moment i sign the offer letter or do i wait until the bank disburse the money to the vendor? not too good with all the terms being used. haha.

This post has been edited by kidmad: Sep 21 2011, 02:59 PM

Hmmm. Good enough to show intention to create legal relations there. If he still refuses to sell after the LOD, then you have to file a civil suit for an injunction against him and at the same time seek for an order for specific performance. However, your case is not a 100% open-shut case, as they call it, as you have not paid him any consideration. You may come unstuck there. Seek for advice and counsel from your SPA lawyer first before deciding. Am sure there is a way to settle it without having to resort to litigation.

What if you win the case (after a few years perhaps, if it goes on for appeal) - and the vendor totally wrecks the house in spite and anger before moving out? It has happened before. You would then be looking at a bigger bill to make good the damage. Yes you may sue him for causing all that but once he has moved out can you trace him and serve the legal papers on him? Doubt so.

Weigh your options carefully. If you really think that it is worth it, then go for it. If there are alternative choices to buy, you might as well save yourself the headache, and legal fees for the civil suit (which will not be cheap as injunctions are costly).

Good luck

Perhaps your property is purchased from developer (in that case there would be 30% reduction in fees) and is below RM350K (in that case there would be a 50% reduction in stamp duty)

Why don't you get a full invoice rather than just being informed of a lump sum of RM4.8k like that? You can then compare it with the many examples in this thread. There's easily 30-40 samples here for all types of loans/SPA and property types.

Dario
The bank said that they checked and found another first charge on the property.The properties with multi storey different owner. thats why cant release the discharge of charge at the moment .What is this mean ?in this case how long it will take as the buyer financier already pay the redemption sum.

This post has been edited by ken8120: Sep 21 2011, 07:12 PM

Dario, thanks for your valuable reply!

In case we don't want to file a civil suit (e.g. give up after the LOD) and want to claim from the vendor for the damage of cost incurred, what I need to do?

Thanks.

ok bro, thank you very much that explains. Well i am suppose to get it but not yet receive anything from my lawyer. How long do they actually need to come out with everything? ATM he just given me a quick quotation that's all.

Sorry boss missed out your earlier post. Too many criss-cross all of a sudden.

How can the bank suddenly find out that there's a first charge over the property? How did they secure their interest in the first place if they did were not the first to create a charge over the property?

Furthermore, the purchaser's financier would not have released the redemption sum unless their interest is secured. If there is another earlier charge created over the title, they would've been reluctant to redeem a loan with a security which is not lodged as priority in sequence.

Are you represented? Ask for a copy of the title search from your lawyer and take a look at it. You can see if there's another charge which is created over the property.

If there is a first charge over the property, there is no way your financier is holding the original title. It will be with the first chargee. Your financier will be the second chargee.

So probably there's more than meets the eye in your case.

You give notice of your claim via the LOD. If the vendor doesn't want to reply, then you go for a civil suit. Same procedure if you want to go for specific performance, or just damages.

Both via civil suit, but of course if it is for damages it is quite straightforward and in all probability, the vendor might even settle out of court and pay you your claim, as long as it is not excessive and you are merely claiming for reimbursement of costs incurred.

Come out with everything? What do you mean? If an itemised note of charges/invoice it is just a single page of paper. Won't take long. 10-15mins? But if you don't ask you don't get it la. What is quick quotation anyway? For any services provided you must insist for a full and itemised quotation.

Unless you really want to be taken for a ride by this lawyer.

If the lawyer is still dilly-dallying over the matter, might as well move on to the next one who is at least more honest than this one.

This post has been edited by dariofoo: Sep 21 2011, 08:23 PM

Dario,so sorry not giving u the clear picture. this property without individual title.its a undivided land.The land have another charge i mean.ground floor (owner A) ,first floor (owner B),2nd floor (owner C) and 3rd floor(owner D).all take loan from the same bank but different branch.Owner D sold his 3rd floor to another buyer who get the loan also from the same bank but once the bank pay the redemption sum to the loan account (owner D account).the lawyer sent the discharge of charge to the bank for execution but the bank find out there is another charge on the land .the charge also from the same bank 1st charge.Why is that? will it affect the sale?

This post has been edited by ken8120: Sep 21 2011, 09:24 PM

Thanks bro, will contact him and get the invoice first. "come out with everything" = the paper work which is for me to sign SnP i believe? My agent told me that i'm suppose to received a draft by this week.

Sorry boss this is beyond my limited expertise and knowledge. I fail to understand how a property without an individual title can have a charge registered in favour of a chargee for one chargor, when the other 3 owners/borrowers do not have a charge created in favour of their lender bank. Same land, same scenario, but different security documents?

And if it is the same bank all the way, how can this same bank just "find out" there was an earlier charge created in favour of...their own selves?

Sorry bro I don't think I can help you out in this. I hope you have a lawyer who can help you settle this mess. Good luck.

Humble apologies

You should be dealing direct with the lawyer at this stage, not going through the agent. Your approach is against the flow of how it ought to be - you have to agree on fees first, then appoint the lawyer to start work. If you allow him to start work, even to prepare a draft SPA, you are deemed to have appointed him. So when the invoice comes out and if you don't agree and want to change solicitors, you will still be billed for work done. So my advice to you is to agree the fees first before confirming that you want this particular lawyer to act for you. Surely you must have confidence in the lawyer before anything. Don't take things too lightly and then later regret.

Good luck,mate.