It will now be more difficult for dishonest lawyers to abscond with the transfer money when the new measures take effect on August 1, 2011.

The Singapore government has taken steps to ensure the safety of buyer’s money that is deposited with solicitors in a property transaction. This has happened because there were several cases of lawyers running away with the money.

In Singapore, when you buy a property, the process is as follows:-

1. Once a price for a property is agreed upon, the buyer gives the seller an option fee or some people call it earnest money in exchange for the option form. It is usually 1% of the purchase price of the property.
2. Typically within 2 weeks (this again can vary by buyer and seller) the buyer exercises the option by paying the balance of either 4% or 9% (depending on whether the buyer has any other outstanding home loans) and this is the option deposit.
3. The buyer must pay the stamp duty at this time.
4. The balance of the sales proceeds will then be paid, usually within 10 weeks.

The option fee is normally paid directly to the seller, so it is not affected by the new measures.

The option deposit is paid by the buyer to the seller when they exercise the option to purchase the property through the option form. This is where the guidelines come in. The deposit of the option, either by check or by cashier’s order, is now required to be made to either:

• The transfer account of the seller’s attorney on the form “-CVY” or
• The Singapore Law Academy

And this must be stipulated in the option form.

Stamp duty is paid either:

1. Directly to the Commissioner of Documented Legal Acts with the Proof of Payment (the lawyers will electronically seal the necessary documents to obtain the proof of payment) or
2. When depositing in:
   • Your lawyer’s transfer account “-CVY” or
   • Singapore Law Academy

The balance of sales revenue can be paid in 1 of 3 ways:

1. Money to be deposited in the transfer account of the lawyer “-CVY”
2. Money to be placed in the Singapore Law Academy
3. Direct payment to the seller or his designees

Buyer may need to pay additional funds, eg rent calculation, tax payments. In such case, the buyer may be required to reserve such sums up to S$5,000 for each property or S$2,000 for block properties. This however, is optional. The money can be paid into a normal customer account.

To ensure the security of the transfer money, funds in the transfer account or those held by the Singapore Law Academy may only be withdrawn with the joint authorization of the buyer’s and seller’s lawyers. Lawyers who do not comply with the new ruling can be fined up to S$50,000 and/or imprisoned for 3 months.

In conclusion, for buyers, remember to put the suffix “CVY” at the end of the payee when writing a check for the conveyance account and for sellers, never let anyone receive sales proceeds on your behalf unless they are someone else. in whom you trust