Tan Kin Lian's Blog: Legal fees for aborted loan

Thursday, June 10, 2010

Legal fees for aborted loan

Hi Kin Lian
I have signed an OTP to buy a flat and proceed to get a bank loan for it. I have subsequently ask for a AIP(approval in principle) loan approval from a bank. It was stated that the loan is void if HDB disapprove the sale.

The sale was disapproved by HDB and I immediately informed the bank. I was assured that it will be void with no further actions needed from my side. However 2 months later, I was told that I have to pay the law firm, which the bank engage to lodge a caveat 1 month after I faxed in the HDB letter. Can you advise if this is a common practice? Who should be paying for the law firm fee?

I have checked with the bank, however they claim that I should pay for it. I'm still contesting it and I'm asking them to state the clause though it was not mentioned to me beforehand. You might want to highlight to the readers when they are taking up loans from a bank.

REPLY
I think that the bank should bear it unless there can show you a clause in the agreement that states clearly that you are required to pay the fee. If they incur the expenses after the loan has been rejected, then they should bear the cost as it was their mistake.

7 comments:

Anonymous said...: The common man is at a great disadvantage in any dispute with a bank.

For one thing, he may not be able to afford a lawyer, even if commnon sense show the case is in his favour.

And even if he can get a lawyer, he may not win the case and the costs incurred is many times the amount in dispute.; June 10, 2010 10:48 AM
Anonymous said...: I hope this is not the beginning of the practice of large corporations bullying the simple man, as happened in the US.

Large corporations would take the simple man to court, even if they knew they would not win, to send the message to others, not to disagree with them. The simple man would spend sleepless nights and $$$$$$ just to get out of it.; June 10, 2010 10:48 AM
entreprenuer said...: Well, lets get organised and approach big companies for bulk discounts or invoicing.

The idea sounds great but the truth is that people are selfish and want to maintain their privacy.

Airlines used to buy raw material for catering, and amenities like toilet paper and plastic cups.
They banded together and started to negotiate for lower prices from suppliers.

Can we do that as retail consumers?
How about bulk insurance for everyone who owns a car?
How about getting interested buyers of homes together to approach developers for better prices and loans?

Products are designed and produce for the masses, yet they are sold as individual pieces, only because we the individual do not get ourselves organised to buy things collectively.

I think this may be a good idea.

Anyone wants to part their $$ as seed money??; June 10, 2010 1:26 PM
Anonymous said...: Even if he can get a lawyer and win the case, he still lose in terms of money to his lawyer, his time, his mental and physical due to the stress, etcs.

In short, head you lose, tail he wins.; June 10, 2010 3:21 PM
Anonymous said...: Dear Mr Tan
It will be good if your organisation can rope in lawyers to help. I have a friend who got AIP for a property which the Bank subsequently withdraw which resulted in the developer confiscating his deposit. He wrote to the Bank, they ignore. He seek the so called 'legal help' provided by our legal system, apparently his documents was thrown out by the court. As he cannot afford a lawyer, the Bank lawyer intend to throw out his case. I am definitely sure there are many such innocent parties being manipulated by the so called BANKS. Very sad; June 10, 2010 4:59 PM
Anonymous said...: Is there no "class action lawsuit" in Singapore?; June 11, 2010 3:02 AM
Anonymous said...: Hi all

I'm the victim of the case. I'm really caught off guard by the case as HDB rejected the sale due to seller didn't meet the MOP.

Has anyone met with this before or is it just Standard Chartered?

Thanks
Mike; June 16, 2010 11:18 AM