Housing Loan Rules And Regulations

New conveyancing rules to protect property buyers, sellers

by Jonathan Peeris from TODAY.

Updated 05:43 PM Apr 12, 2011

SINGAPORE - New measures to safeguard property buyers and sellers from rogue lawyers are expected to kick in on Aug 1. Speaking in Parliament yesterday, Law Minister K Shanmugam reiterated that the amendments, which were passed by the lawmakers yesterday, were aimed at tightening safeguards for conveyancing monies held by lawyers.

Mr Shanmugam said his ministry will "continue to work in tandem with all affected parties to ensure a smooth transition for the public". He added: "We expect to bring the new system into operation, with phased refinements, starting from Aug 1."

In June 2006, lawyer David Rasif made off with about S$11 million of his clients' money - most of which had been entrusted to him by an American couple who wanted to buy a bungalow off Holland Road . In November 2007, lawyer Zulkifli Mohd Amin ran off with about S$6 million - some of it allegedly from a conveyancing deal.

Both men remain at large.Under the new rules, conveyancing monies will have to be held in special accounts, which will be offered by banks appointed by the Ministry of Law. Movement of funds within such an account will also be controlled: For instance, two signatories are required before any money is paid out, while clients will have to state the name of the law firm on the cheque when making payments.

An Electronic Payment Instruction service by the Singapore Land Authority will also be made available to facilitate transactions. For complex deals, lawyers representing the property buyer and seller can jointly open an escrow account. Clients who do not wish to deposit money with the lawyers can opt to have it held by the Singapore Academy of Law.

Lawyers who breach the new rules could be fined up to S$50,000 or jailed for a maximum of three months.Said Mr Shanmugam: "Of course, no system can be absolutely secure against a determined criminal who chooses to flout the law. But we have made it more difficult for a crooked lawyer to try to abscond with conveyancing money."