All I need to know about law firm

If you engage a lawyer, you should clarify the scope of services to be provided and the legal fees payable. In general, when you purchase a property, the services that a lawyer can provide you would include:

• Advising you on the transaction documents i.e. terms and conditions in your OTP and/or S&PA.
• Conducting title searches to verify the title of the property identified in the contract matches with the title record in the Land Titles Registry.
• Providing property law, regulatory and financing advice.
• Checking if there are any regulatory notices or government schemes that will affect the property you intend to purchase.
• Lodging a caveat against the title to the property on your behalf pending completion of your purchase. This serves to notify the public and third parties also interested in this property of your valid interest or claim.
• Liaising with your bank’s lawyer who will prepare the mortgage for the bank.
• Liaising with the bank and CPF Board to ensure that your housing loan and CPF funds are in place and ready for drawdown.
• Completing the conveyance by exchanging your payment for the executed
  instrument of transfer.

Law firm will need the following items from you before the meeting.

1. NRICs/Passport – To ascertain purchasers’ citizenship status. (The lawyers are also obligated to check if you own any other properties locally to ensure an accurate calculation of your Buyer’s Stamp Duty)
2. Marriage Certificate / Birth Certificate – It is a requirement by CPF for those who intend to use their CPF figures for your property purchase There will be a form that will need to declare the relationship of the purchasers (i.e. married couples, fiancée and fiancé, or unrelated)
3. OTP – For your lawyers to determine the exact purchase price, size of the unit and address of the unit. It will also contain the 15% payment details and account details to be payable to the developers, which will be pretty crucial for your note as well.
4. CPF Statement(s) – Your lawyer will be taking your instructions as to note on how much exactly the amount of funds from your CPF that you wish to use for your property. (1st property owners can utilise the entire Ordinary Account (OA) figure in it, while 2nd property homeowners onwards will need to have a minimum sum within your Special Account (SA) + OA.
5. Bank Letter of offer– Your lawyer will be need to vet through the clauses to see what the special conditions are in order to disburse the loans, whether the bank have approved enough CPF for your usage etc.

Law firm will also need to know the following details from you before the meeting.

1. Do you own any other property(s) under your name(s)? – To calculate your stamp duty.
2. The loan will be under one/two borrower’s name? – To prepare the mortgage documents.
3. Your email address – To send you an email on the payees name, amount, when to pay and also what are the things to bring for the meeting.

Law firm will need you to bring the following for the meeting.

1. NRIC.
2. Chequebook/Cashier’s order.
3. If you are selling your current property and/or pending refund of your CPF, you will need to show proof of the sale ie completion account, your buyer’s stamp certificate etc.

The lawyer will explain all the documents to you and do all the calculation on the spot for you.

In addition they will let u sign the following :

• Mortgage Document
• Deed of Assignment
• Spousal Consent form
• ABSD form
• CPF LAD Form
• Warrant to Act
• Manner of Holding form

Click here to read about the full details on the meeting.

Its most advisable to select your law firm asap once you have gotten your OTP on balloting day.
But if you are still uncertain about which your law firm to go with, this will be what you might face.

Week 0 to Week 2 – If there’s no law firm indicated, developer will send the sales and purchase agreement directly to your residential address. Note that it will be by registered mail, that means you will need to have someone at home to receive it.

Week 2 to week 5 – If there’s still no law firm chosen, then please note that you have 3 weeks to exercise the S&P from the date of receipt. You will need to sign on the signing page and manually bring it down to the developer law firm to exercise before 3.30pm on the last day, failing which would subject you to have a 25% deduction from the 5% option fee paid.)

Week 5 to week 8 – If there’s still no law firm indicated, then most probably you are on your own, you wont be in time to apply for CPF or bank loan and unfortunately you need a lawyer to act for CPF and the bank.

There are many conveyancing law firm on the market ranging from sole proprietor to partnership to big firms that act for the developers.
You can ask your banker or agents to recommend or us to recommend you (Nett price).

Here are a few pointers to consider:

1. Are they in the approved panel of the bank you have chosen? – if you have chosen ABC bank, then you will want to go with a law firm that is approved by that same bank to act for them. Otherwise the bank will appoint their own law firm to act for them and you will have to pay two sets of legal fees. You should also consider if that law firm is also in other XYZ bank too in case if you decided to change to another bank last min or do a refinancing to XYZ bank in the future.
2. Is GST included? – Some law firms charge GST on the legal fees, this means extra 7% of the legal fees for you. So its better to check with that law firm first before committing.
3. Does the legal fees include $500 mortgage stamping fees? – If you are taking a loan from the bank, then you need to stamp on that mortgage document. IRAS cap the stamping fees at $500, some law firms will collect the $500 separately, so its better to check with that law firm first before committing to avoid a nasty surprise.
4. Does the legal fees include the use of CPF? – Law firms have to pay to CPF to apply for their client’s CPF, so you need to check if the legal fees includes the use of CPF.
5. Bridging loan – If you are using bridging loan, then you need to check if the legal fees includes the cost of bridging loan. There’s additional work to be done, and typically most law firm charge an additional $500 for it.
6. Additional request – Got a wall/cupboard/tabletop/shelves you don’t want the developer to build? All this request are additional work, the law firm have to get your layout with all the before and after diagrams marked clearly, write to the developer, track/chase for a reply, then inform you the cost and then revert to the developer that you wish to proceed or not. Or you might need a time extension due to funds coming in from overseas/you are stationed overseas and requires the documents to be sent to them to sign at the Singapore embassy.Typically most law firm charge an additional $100-$200 for it, some law firm charge more so you need to check with them.

To say a law firm is in the bank panel means that the law firm will be readily approved to act for the bank.

Bank need law firms to act for them, the lawyer will check the purchaser’s details before calling for the loan draw down. The panel is a list of law firm that are accepted by the bank.

The bank will select law firms to enter into their panel based on a few requirement such as:

1. Number of lawyers and their years of experience, the professional indemnity limit (Think of it as insurance in case the client sues the law firm, and the insurance will compensate the client).
2. Number of cases and good track record.

Mortgage stamping fees or Mortgage stamp duty are charged when you take a mortgage for your purchase.

According to IRAS :

Mortgage duty is payable on mortgage document where the interest in immovable property or shares is transferred from the borrower to the lender as security for the repayment of a loan obtained under such an agreement.
Mortgage duty of 0.2% to 0.4% is payable on the loan amount, subject to a maximum duty of $500.

Click here to see the FAQ on mortgage stamping fees from IRAS.

Its important to check if the law firm’s legal fees includes this $500 mortgage stamping fees, otherwise you will be caught off guard when the law firm ask for it.