In a sub-sale that begins after an agent concludes the price and obtain the green light from both vendor and purchaser, the procedure is as follows:-
1. Purchaser to pay legal fees and disbursements according to the scale fees under the Solicitor's Remuneration
Order. The vendor can jointly seek the same solicitor to act in common, if he decides to save on the legal
fees. The disbursements will carry items (property with title) ie. CTC copy of title, (especially if the
final title is issued) or (property without title) preparation of Deed of Assignment. The other items will
include bankruptcy search (both vendor and purchaser) and the title search, printing costs, phone charges,
postage and miscellaneous fees incidental thereto.
2. The first 2% earnest deposit and the agent fees will be paid by the purchaser. The balance of deposit will
be handed to the solicitor who will hand this deposit to the vendor. To save time and for convenience
purposes, all the payments can be settled upon signing the sale and purchase agreement (SPA Agmt).
3. The SPA agreement ( to be completed within 3 + 1 extended months from the date of Agreement ) will need be
stamped within one month (to avoid late penalty stamping) after signing the SPA, which will also be dated on
the date the SPA Agmt was signed. The cost of stamping will be borne by the purchaser. If property comes
with title, purchaser to bear the cost for adjudication assessment from LHDN on the Memorandum of Transfer
(MOT). This will follow a scale fee calculation under the Stamp Act.
4. Where property is still under charged to the vendor's financier, the sub-sale solicitor will obtain the
redemption statement from the vendor's financier. At the same time, the purchaser will obtain loan from
a bank. EPF withdrawal can also be arranged. When the original SPA is stamped, this original SPA will be
retained by the bank. The EPF only need a copy of the stamped SPA.
5. A financier's solicitor will prepare the loan documentations. The purchaser will then sign and pay the legal
fees and disbursements to process the loan. The sub-sale lawyer will liaise with the purchaser financier's
solicitor for the necessary undertakings to effect the redemption of the property from the vendor's
financier which is still under a charge.
6. The reciprocal effect of money release from the purchaser's financier and handed to the vendor's financier
to discharge the charge and redeem the property to the purchaser's financier is all carried out in a series
of undertaking between the sub-sale lawyer and the purchaser's financier solicitor.
7. The power of attorney of the earlier charge will be revoked upon the discharge of charge.
8. If there is still outstanding amount owed to the vendor after redemption, this differential amount between
the balance of purchase price after deducting the deposit and redemption sum will have to be paid by the
purchaser to the vendor via the sub-sale lawyer's client's account. In fact,the redemption sum released from
the purchaser's financier will also have to enter the sub-sale lawyer's client's account before the sub-sale
lawyer issued a cheque for the same amount to the vendor's financier.
9. An honest sub-sale lawyer will conduct and complete this task as soon as the redemption sum is released form
the purchaser's financier. As such, no interest is earned in the solicitor client's account since this is a
current account where cheques are issued and not saving nor a fixed deposit account.
10. By then, 2 months would have passed and the sub-sale lawyer would have to proceed to seek assessment for
adjudication of stamp duty on the signed and dated Memorandum of Transfer. An important point to note is
that the date on the MOT must be dated within the 3 +1 months duration. Need not be on the same date of SPA
because the registration of transfer will have to be effected within three months from the date of the MOT
or else late penalty will be incurred. Hence, the MOT need not be dated as early as the date of SPA.
11. The purchaser's solicitor will enter a charge and this will correspond with the completion of the
adjudicated, stamped and signed MOT from the sub-sale lawyer. The MOT and the charge of the purchaser's
financier will be registered simultaneously.
12. The keys will be passed to the purchaser and hence this complete the sub-sale purchase.
13. Where property is without title yet, the Deed of Assignment is applied.
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