Lawyers Corner, A one-stop centre on lawyers and queries
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 Jul 31 2011, 07:47 AM
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#1
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Junior Member
36 posts Joined: Jan 2007 From: mrdefinite.net 
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I have recently purchased an apartment unit and put in 15% for the down payment. I received my copy of the stamped SPA yesterday but to my horror I realised the deposit is indicated to be only 10% in the SPA. I am rather worried now and wonder if something is wrong here?
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Jul 31 2011, 10:42 AM
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#2
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Junior Member
36 posts Joined: Jan 2007 From: mrdefinite.net
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QUOTE(dariofoo @ Jul 31 2011, 09:13 AM) Was all of the 15% went to the vendor immediately upon signing of the SPA? Or was it 10% to vendor and 5% retained by lawyer. Then if you're taking a 85% loan, things would make sense. Thank you for the valuable info, Dario.If you're taking a 85% loan, then the 15% could be like this (10% deposit + 5% differential sum) If 15% was paid to the vendor, then, based on how many lawyers are involved in the transaction, there has to be acknowledgements made. If there's one for each party they can write to each other. If just one your lawyer needs to call in the vendor to sign a letter confirming the typo error and that he acknowledges that 15% was paid. However, I would not advise that the SPA be amended to 15% deposit as this will be the sum to be forfeited by the vendor in the event that the SPA is not completed through your own default. The deposit is always stated as 10%. So, if the SPA is aborted by you, only 10% will be forfeited and the 5% has to be returned to you. Professionally, that extra 5% should not be released to the vendor now. It has to be retained by the lawyer as stakeholder until it can be released together with the balance loan sum.   For your info the 15% was paid to the vendor's lawyer through my agent upon signing of SPA. I am taking 85% loan. Is it a standard practice that the SPA indicates only 10% deposit and the rest is retained by the vendor's lawyer? I'm hoping it is because this is my first time purchasing a property and thus have very little experience in this. If it was a typo error and requires the lawyer for each party to rectify the error in a letter (i.e, nothing to be amended on the SPA), will this delay the disbursement of money from the bank and also transfer of ownership? Right now they are in the process of getting consent from developer and stuff. I am rather worried and wish to be able to get in touch with my lawyer but today is a Sunday so... |
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Aug 1 2011, 08:05 AM
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#3
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Junior Member
36 posts Joined: Jan 2007 From: mrdefinite.net
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QUOTE(dariofoo @ Jul 31 2011, 06:24 PM) Standard practice is 10%. I've never seen any other figure when it comes to deposit upon signing of SPA. 10% appears to be the customary sum which both parties always agree on. Thank you so much bro. Your explanation is really helpful. Your help is much appreciated! If 15% was paid, then the vendor's solicitor would be wise to only remit 10% to the vendor and keep the 5% differential sum as stakeholder. Differential sum : Purchase price (less) deposit (less) loan sum = differential sum. In your case the 5% can be deemed as differential sum. Look at the cover letter by the purchaser's solicitors when forwarding the cheque for the 15% to the vendor's solicitors. It should be cc to you as well. Nothing to worry and nothing to amend as you've stated that you're taking 85% loan. As such, surely the 5% is the differential sum forwarded to the vendor's solicitor as stakeholder. There is no error here. The deposit is still 10% as stated in the SPA. So don't worry about it. Should be ok. Just confirm again with your lawyer tomorrow. Good luck. |
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