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Stakeholding Pilot Trial Service
Explanatory Note In the Second
Consultation on the Proposed
Measures to Safeguard Conveyancing
Money, the Ministry of Law (MinLaw)
has proposed a Pilot Trial to test
the proposed workflows. The Academy
is one of the entities involved in
this Pilot Trial. This Explanatory
Note is a brief summary to help
buyers and sellers understand the
Academy’s Pilot Trial Service. As
always, they should consult their
lawyers if they have any questions.
The Pilot Trial Service
1. For the Pilot Trial Service, the
relationship between the various
parties will be governed by
contract, the terms of which are
contained in the Terms and
Conditions, Instructions and Forms
for the Pilot Trial Service. These
documents can be found at the
Academy’s website.
2. Both the Buyers and the Sellers
have to appoint the Academy as
stakeholder. That appointment is
done by:
(a) including the proposed
stakeholding clause into the sale
and purchase agreement or option to
purchase for the property; and
(b) signing Form P8 or authorising
in writing their lawyers to sign
Form P8. The Academy will require
the original written authorisation.
3. For the Pilot Trial, both parties
can either (a) sign the same Form P8
or (b) they can sign separate
copies.
Stakeholding Arrangement
4. The Academy is only stakeholder
of the deposit or balance deposit,
usually the 5% less the option
money. Payment in of this will be
handled by the lawyers.
5. As stakeholder, the Academy will
only release the stakeholding
deposit:
(a) when instructed to do so (using
Form P9) by both the buyer’s and the
seller’s lawyers three working days
before the payment due date (which
is usually the completion date); and
(b) only to a list of authorised
payees.
6. During the Pilot Trial period
only, these requirements can be
waived in the following situations:
(a) Instructions from both the
buyer’s and seller’s lawyers: If the
seller’s lawyers certify that they
had taken reasonable steps to try
and obtain the buyer’s lawyers
signature to Form P9, then Form P9
can be signed by the seller’s
lawyers only; and
(b) Instructions using Form P9 to be
given three working days before
completion or when the money is
needed: If the seller’s lawyers
certify that they had taken
reasonable steps to try, but could
not, submit Form P9 in time, then
Form P9 can be submitted by 10 am on
the payment due date and collection
of cheque / cashier’s order will be
delayed to 3.30 pm for such last
minute payment instructions.
7. If the seller’s existing
mortgagee requires payment by
cashier’s order, the Academy will
provide this on a cost reimbursement
basis at $5. The Academy will be
using its own cheques for all other
payees. Arrangements on the modes
required for payment out will be
handled by the lawyers.
8. Other than the reimbursement cost
for the cashier’s orders or for
stopping/cancelling cashier’s
orders, the Academy is waving all
other fees for the Pilot Trial
Service.
Exceptional Situations
Remnant Money
9. This is a situation where there
is some money left with the Academy
after completion. This can arise in
many situations. An example is when
some portion of the money normally
due to the seller is intended for
someone else but the required letter
of authorisation cannot reach the
Academy within the stipulated time.
10. In this scenario, completion
would take place as scheduled. The
parties will indicate in Form P9
that there is remnant money left
with the Academy and, since the
buyer has discharged the Academy
from its stakeholding obligation to
the buyer, the Academy can release
the remnant money solely on
instructions from the seller’s
lawyers using Form P9A.
Disputes
11. This is a situation where, after
Form P9 / P9A is submitted to the
Academy, some dispute arises, either
between the buyer and the seller or
among the sellers and the Academy is
asked to hold back release of some
or all of the stakeholding deposit.
12. In this scenario, either the
buyer or the seller gives the
Academy notice of the dispute using
Form P10 specifying which cheques/cashier
orders are to be held back. The
Academy will only pay out if a fresh
Form P9 / P9A is submitted or
pursuant to a Court Order.
Dated this 26th day of Feb 2010 |