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dunbshy
Joined: 23 Oct 2007
Posts: 22
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 Posted: Sun Dec 16, 2007 8:54 pm Post subject: Property under construction, freehold & individual title |
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Dear legal experts,
I'm from the bank & I need your kind advice. My sister bought a property from developer which is still under construction. it's a freehold, landed & individual title being issued. S & P signed on 3rd December and 10% paid to developer upon signing of S & P. The construction has reached 35% & the developer has given us 21 days to pay another 25%. She's taking 90% loan from Bank B, S & P and loan is handled by different lawyer. According to the loan lawyer, 21 days is almost impossible to release the money as that whole peace of land (when it's still under master title) is charged to Bank A for bridging purpose. I assume Bank A is the master chargee? Correct me if I'm wrong.
Seek for your advice for the following:
1.) what is the normal timeframe for the bank to release the 1st drawdown based on the situation above?
2.) understand from loan lawyer that redemption statement from Bank A (Master Chargee) is required in order for the bank to release the 1st drawdown. From my understanding, In order to redeem the title, Bank B must pay Bank A the redemption sum. As such, should Bank B release the money to developer as 1st drawdown OR release it to Bank A?
3.) If there's a delay in getting the redemption statement from Bank A, says the loan lawyer has requested for redemption statement but Bank A haven't come back to us for quite some time, would it be our fault or developer fault? Who should request for the redemption statement from Bank A? loan lawyer or S&P lawyer?
4.) Since individual title is out, is tat a MUST for the bank to lodge caveat prior to 1st drawdown? Can the bank release money without entering caveat?
5.) loan lawyer will only advice the bank for 1st drawdown if all documents are in order. Can I know what are the necessary documents to be in order? MOT? redemption statement? Original S&P? what else?
6.) The bank has given the undertaking letter to developer but the developer refused to accept the undertaking. Dev gave us their format of undertaking & wants our bank to follow their format as the undertaking letter to developer. Is this normal? In return, developer will give undertaking letter to the bank also rite?
Can anyone please help me.. Thanks in advance. |
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tkc
Joined: 13 May 2007
Posts: 248
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| Posted: Sun Feb 03, 2008 9:14 pm Post subject: |
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| ask your sister or the loan agreement lawyer to write a letter to the developer and explain the delay for settling the 25% progress claim. often, the developer will waive the 10% penalty. |
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cynthusc
Joined: 16 Sep 2005
Posts: 310
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| Posted: Thu Feb 14, 2008 9:17 am Post subject: Re: Property under construction, freehold & individual t |
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| dunbshy wrote: | Dear legal experts,
I'm from the bank & I need your kind advice. My sister bought a property from developer which is still under construction. it's a freehold, landed & individual title being issued. S & P signed on 3rd December and 10% paid to developer upon signing of S & P. The construction has reached 35% & the developer has given us 21 days to pay another 25%. She's taking 90% loan from Bank B, S & P and loan is handled by different lawyer. According to the loan lawyer, 21 days is almost impossible to release the money as that whole peace of land (when it's still under master title) is charged to Bank A for bridging purpose. I assume Bank A is the master chargee? Correct me if I'm wrong.
Seek for your advice for the following:
1.) what is the normal timeframe for the bank to release the 1st drawdown based on the situation above? Usually the bank will take about 5 weeks if all parties do their jobs. Is the banker on the Developer's panel?
2.) understand from loan lawyer that redemption statement from Bank A (Master Chargee) is required in order for the bank to release the 1st drawdown. From my understanding, In order to redeem the title, Bank B must pay Bank A the redemption sum. As such, should Bank B release the money to developer as 1st drawdown OR release it to Bank A? Your loan lawyer is doing their job. They need to pay the redemption sum to get a disclaimer from Bank A that the property will not be part of any foreclosure proceedings if the Developer winds up.
3.) If there's a delay in getting the redemption statement from Bank A, says the loan lawyer has requested for redemption statement but Bank A haven't come back to us for quite some time, would it be our fault or developer fault? Who should request for the redemption statement from Bank A? loan lawyer or S&P lawyer? The loan lawyer requests for the RS and Bank A should not take too long. Get the Developer to push them.
4.) Since individual title is out, is tat a MUST for the bank to lodge caveat prior to 1st drawdown? Can the bank release money without entering caveat? No because if the bank does not enter a caveat and releases the money there is a risk that the property is transferred to another between the time they pay the redemption and the final release of the loan. The caveat is the security that the Land Office will inform your bank of any transactions on the Property before it is charged to them.
5.) loan lawyer will only advice the bank for 1st drawdown if all documents are in order. Can I know what are the necessary documents to be in order? MOT? redemption statement? Original S&P? what else? There are many documents. Too many to list here. But in this case I would think they are waiting for the redemption statement and disclaimer from Bank A
6.) The bank has given the undertaking letter to developer but the developer refused to accept the undertaking. Dev gave us their format of undertaking & wants our bank to follow their format as the undertaking letter to developer. Is this normal? In return, developer will give undertaking letter to the bank also rite? It depends on the undertaking. Sometimes the developer gives undertaking that are grossly unfair and the loan lawyer's cannot accept them due to banks policy
The most important thing now is to talk to the Developer to waive the interest. Tell them that the delay is on their bridging financier's part and not yours. Get more time
Can anyone please help me.. Thanks in advance. |
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