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.