Published December 30, 2011

New rules streamline conveyancing


IN an effort to streamline conveyancing transactions, Singapore's Ministry of Law has introduced new rules aimed at simplifying the payment of stamp duties and the depositing of monies into conveyancing accounts.

These additional rules, announced yesterday, are aimed at enhancing measures introduced on Aug 1 to protect conveyancing monies from rogue property lawyers by regulating how lawyers can receive and hold these funds.

Starting Jan 1, Singapore Land Authority's Electronic Payment Instruction (ePI) service will allow lawyers to electronically notify banks of the details of conveyancing money paid into conveyancing accounts, instead of using hard copy forms.

The Inland Revenue Authority of Singapore (IRAS) will also accept electronic stamp duty payments via the ePI service, which should reduce processing time, the government said.

These rules are aimed at further simplifying conveyancing transactions following the implementation of measures in August that bar lawyers from receiving and holding conveyancing money in their normal client accounts.

Instead, they are required to hold conveyancing money in conveyancing accounts that can be opened with specially-appointed banks including the Bank of China, DBS Bank, OCBC Bank, the Bank of East Asia and United Overseas Bank.

Alternatively, lawyers can hold these funds through the Singapore Academy of Law's conveyancing money service, or via escrow arrangements. Buyers and sellers who wish to deposit money into conveyancing accounts will have to add the suffix 'CVY' to the payee's name on their cheques, cashier's orders or bank drafts. Withdrawal or payout of money from conveyancing accounts will also require two-party authorisation.

'Hopefully, the new rules that take effect Jan 1 will help us save time and a lot of administrative hassle,' said Elsa Chai, partner with corporate real estate, Rajah & Tann LLP.

'After Aug 1, law firms would usually request clients to issue a cheque payable to the Commissioner of Stamp Duty, and then bring the cheque to IRAS. After IRAS has cleared the payment, it will generate a certificate of stamp duty and send it electronically to the law firm's inbox,' she said.

But, starting Jan 1, stamp duties can be deposited into a law firm's conveyancing account opened with one of the designated banks, and the lawyer can give instructions to the bank to make payment to IRAS electronically, she said.

Upon receiving the stamp duty payment, IRAS will then generate an e-stamp duty certificate to the law firm's inbox, and the law firm can print it for the buyer, she said.

Ms Chai said that the new rules will likely reduce the time taken to send the stamp duty certificate to the law firm's inbox to three working days from five.

In addition, two more banks, CIMB Bank Berhad and Far Eastern Bank, were designated by the Ministry of Law to hold conveyancing monies.

That could prompt the banks to be 'more competitive' when assessing administrative fees for their financial services, Ms Chai said.