20180521 (Mon)
What is the difference between before and after signing SPA? What is 10% upon signing SPA?
The 10% upon signing of SPA is a condition for the contract. In other words, it is contingent to the contract. See S.32 Contingent Contract, CA50. It a commitment buyer need to honour before SPA can be formed. Depending on the loan facility from the bank, the buyer proceeds to make remaining payment upon signing of SPA till the title (or deed of assignment/novation if no title) is transferred (and charged).
The deposit 10% is and obligation in Pre-SPA stage. This money can be paid to Vendor straight away as there is nothing to hold it back or contingent to it. This 10% can also be claimed by the estate agent accordingly (S.22C(1)(d) VAEP 1981). Thereafter, SPA is signed. There are many other things inside SPA which need to be done. This is at Post-SPA stage.
Thereafter, if the remaining sum (90% or lower) is financed by a loan, the lawyer requires to complete all the documents by the bank before the bank pays the loan. However, if the bank is only giving 70% of loan (3rd property onwards), the remaining 20% is to be paid up before the loan is dispersed. Now, this part of the money is NOT given to the seller but retained in the client’s account of the legal firm until all the obligations mentioned in SPA is completed. This is taken as en bloc in the Post-SPA Stage.
S.22C (1) (d) be entitled to recover in any court any fees, commissions, charges or remuneration for any professional advice or services rendered as an estate agent.