As if your property purchase wasn’t expensive enough, you also need to fork out a few thousand dollars to hire a property lawyer.
But guess what, your conveyancing lawyer doesn’t just sit there collecting money from poor, helpless homebuyers.
Property transactions are actually very troublesome for the lawyers themselves due to the amount of time and paperwork that goes into them.
So what happens when you sign on the dotted line? Here’s what your conveyancing lawyer has to do when you’re buying your house:
1. Go through the terms and conditions of your contracts and advise you
When you decide to buy a property, you’re going to be signing your name on a bunch of contracts, beginning either when you pay your booking fee or when you bring home the option to purchase.
You lawyer needs to go through all these documents to make sure he can advise you on all the items he needs to collect from you in order to make sure your purchase doesn’t fall through.
He’ll bug you for your payment of the option fee and get you to come down to the office to sign the various contracts. He’ll also advise you on your purchase, such as whether you and your partner should be buying it as tenants-in-common or joint tenants.
2. Conduct background searches
Each time you engage a conveyancing lawyer to act for you in a property purchase, he and his secretaries have to do a bunch of searches to make sure you’re not being conned.
These include a title search to ensure the guy who claims to be the owner is who he says he is, and a background check to find out whether your seller not secretly an undischarged bankrupt.
3. Send out legal requisitions
Just before the option is exercised, your property lawyer or his secretaries are going to be running around like headless chickens, because there will be a lot of paperwork to do.
Legal requisitions to nine different government arms must be sent out, including PUB, LTA, BCA and so on to ensure nothing is going to happen to your property—for instance, they want to make sure your future home isn’t going to be replaced by an MRT station in 3 years’ time. Only when all the requisitions have come back satisfactorily will the option be exercised.
There are nine such requisitions sent to:
- PUB (Water Reclamation Network) Department for sewage and drainage;
- LTA (Survey and Lands Department) for MRT works;
- LTA (Survey and Lands Department) for street works;
- LTA for Road Line Plan;
- Building Control Authority for alterations/additions made to the property;
- National Environment Agency (Environmental Health Department) for any outstanding issues regarding mosquito breeding, drain chokage, etc;
- National Environment Agency (Central Building Planning Unit) if the property is affected by the current drainage scheme;
- Inland Revenue Authority for any outstanding property tax; and
- URA to ascertain the master plan zoning, any decision on proposals to develop the site, etc.
If the buyer is a foreigner, approval must also be sought from the Land Dealings Approval Unit (LDAU) if the property is landed property. As there are so many types of developments, it is always safer and prudent when in doubt to apply for the approval and LDAU would then say for sure if approval is required or not.
4. Exercise and stamp the option to purchase
When you hire a property lawyer, your deadlines become his deadlines. It now becomes his responsibility to keep tabs on when the option to purchase has to be exercised.
Ideally, he will collect payment from you in advance and then exercise the option to purchase before the deadline is up. He then has to get the option stamped within 14 days.
5. Help you get your financing in order
After you’ve committed yourself to the property purchase by exercising the option, it’s time to start worrying about financing (which you can figure out with relative ease on MoneySmart’s Home Loans Page). You’ll hopefully have gotten your mortgage letter of offer by then.
If you’re using the same conveyancing lawyer to act for you in the mortgage (many people do this because it can be cheaper), he will explain the mortgage documents to you if necessary and then get you to sign and accept.
From then on, your lawyer will also liaise with the bank to get payment for the property and pass it on to the owner or developer.
Your lawyer also needs to place a CPF charge on the property if you’re using CPF funds to pay for any part of the property. From then on, it will be the lawyer who communicates with the CPF board and collects payments from them.
6. Progress payments (uncompleted properties)
If you’re buying a property that’s still under construction, your property lawyer has to keep your file for years and deal with the progress payments on your behalf.
Each time the developer finishes one stage of the construction of the property, your lawyer will receive a notice telling him the amount to be paid and the deadline. Your lawyer will then notify you, the CPF Board and/or the bank, depending on who’s supposed to pay that portion, chase them for the money and then send the money to the developer.
Your lawyer will also be the first to know when the TOP of your property has been received. That means you can now move into your property and pick up your keys.
If you’re buying resale or completed property, the busiest day for your conveyancing lawyer and his team is the day your property purchase is completed.
The lawyer has to calculate exactly how much money needs to change hands and for what. This can be quite confusing because there are factors such as utilities charges, MCST fees for condos, property agents’ fees and so on.
The lawyer or a secretary will then have to meet a lawyer or secretary from the buyer’s firm and exchange the various cashier’s orders and cheques for the keys and other items.
8. Post-completion admin
Once you’ve collected the keys to your apartment, you can start planning your housewarming party or deciding on what renovations will transform the place into your dream home.
Not so for your property lawyer, who still has some admin to take care of, such as sending out notifications to the property tax department and IRAS that the property now belongs to you, so they can come after you to pay taxes.
As you can see, whenever you purchase a property, that translates to months or even years of monitoring your file and making sure no deadlines get missed—not exactly fun and games. So give your lawyer a hug or, er, maybe just buy him a kopi the next time he calls you to bug you to come down and sign some document.
I’m selling my property instead. What does a lawyer do for me?
If you’re on the other side of the picture and you are selling your property rather than buying, your conveyancing lawyer should see if there is an outstanding mortgage and whether there is any penalty payable for early redemption under the mortgage. They should also check if CPF funds have been used.
Once all that has been done, they need to submit necessary notice to the bank for redemption (total discharge of mortgage) and CPF board for discharge of CPF charge.
Aside to that, the lawyer will prepare proof that all miscellaneous charges are paid up. So this includes things like property tax, MCST charges and dues.
To err on the safe side, some lawyers will come up with an inventory list of furnishings, fixtures and furniture that would be included in the sale, to avoid misunderstanding.
Have you ever engaged a property lawyer before? Share your experiences in the comments!