Standard Operating Guide for Law Firms

Transcription

1 Standard Operating Guide for Law Firms Prepared by Credit Documentation Unit, Credit Documentation & Administration No part of this document may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, chemical, photocopy, recording or otherwise without the prior written permission of: Maybank Credit Documentation & Administration Malayan Banking Berhad (incorporated in Malaysia) UEN S60FC1376L

2 DOCUMENT CONTROL Version Date Change From Previous Version January 2006 December 2008 December nd Release 3 rd Release 4 th Release Malayan Banking Berhad (incorporated in Malaysia) UEN S60FC1376L 2

3 GUIDELINES & STANDARD OPERATING PROCEDURES FOR SOLICITORS Kindly ensure strict compliance with the foregoing procedures and time-lines; failure to do so may entail indefinite suspension of your services &/or any action as the Bank may deem necessary. 1. General 1.1 It is your duty to ensure that you are not or would not be in a position of conflict if you act for both the Bank and for any of the Relevant Party. If you are or would be in a position of conflict by accepting the Bank s instructions, please immediately notify the Bank in writing of the same. In the event you are acting for both the Vendor and the Relevant Party, please seek prior written approval from the Bank [please liaise directly with the relevant lending unit (with copy to the Credit Documentation Unit)]; the Bank may in its sole discretion discharge you from acting for the Bank and appoint another law firm to act in the matter. 1.2 It is your duty to render advice to us on any further action that need to be taken so as to ensure that we act in compliance with prevailing laws in force and that our interests are fully protected in all respects at all times. 2. Documentation 2.1 In respect of all security documentation that you are instructed to handle: You are to adopt the correct form of the legal documents if available on our website [ As solicitors for the Bank, please make appropriate adaptation as you deem necessary in your professional opinion so as to adequately protect the Bank s interest; in which case, kindly advise the Bank s Credit Documentation Unit of the change(s) or adaptations made. In addition, please prepare any other necessary documents required as part of the credit/security arrangements indicated in the Bank s facility letter(s) as you may deem fit to sufficiently protect the Bank s interest. As the Bank will NOT be approving any drafts, you are solely responsible to ensure that all documents prepared for or sent to the Bank are in order. You shall also be solely responsible for the documents adequacy and completeness and shall ensure that the Bank s interests are protected at all times. Accordingly, you assume full responsibility for all legal documentation, which you are instructed to handle and are therefore accountable directly to the Bank When you send any document to the Bank for its execution, you are THEREFORE confirming to the Bank that you have found the document to be in order for its execution. We are relying on you to ensure the authenticity of all signatures to all loan/facility and security documents and the certification of all Board Resolutions, wherever applicable, before forwarding the engrossed documents to the Bank for the Bank s execution. Malayan Banking Berhad (incorporated in Malaysia) UEN S60FC1376L 3

4 2.1.3 Where any document is to be executed outside of Singapore, the document must be executed before a notary public. We would require your confirmation that (a) the execution is in order and (b) the witnessing procedures are sufficient to protect adequately the Bank s interest Where any document is required to be executed by an attorney under an instrument of power of attorney ( Instrument ), you shall ensure that: (i) the attorney has the power and authority under the Instrument to execute the document; Instrument has been deposited in the Registry of the Supreme Court of Singapore; and (iii) Instrument has not been revoked Where a letter of guarantee &/or memorandum of charge over deposits/shares/unit trusts &/or letter(s) of undertaking is/are required as part of the Bank s credit/security arrangements, please obtain the Bank s updated printed form(s) and assist in the execution, duly witnessed by a solicitor Where the Bank makes amendments, solicitors are to ensure that such amendments are properly rectified before lodgement/registration with the appropriate authorities. 2.2 In addition to the above, please take note of the following: For real property (i) Pursuant to Section 44 of the Land Titles (Am) Act 2001, we shall retain the original mortgage presented for registration at the Singapore Land Authority. As such, we do not require the mortgages to be prepared and signed in duplicate. Accordingly, please do NOT forward any duplicate mortgage documents to the Bank. Where any part of the Facility is to be disbursed prior to the final registration of the mortgage(s) or where the bridging loan/facility is to be disbursed, you shall first lodge a caveat against the Property(s). In addition, you shall also lodge a caveat against the existing property(s) to be sold before disbursement of the bridging loan/facility For HDB properties In addition to the documents listed in the Bank s Facility Letter, the Bank requires the following: (i) a copy of the duly signed Home Protection Scheme (HPS) application form, duly completed and signed by the CPF member(s); in cases of HDB Resale flat(s), please obtain, copy(ies) of the latest valid valuation report(s) of such property(ies) prepared by the HDB s assigned valuer for your verification of the market value of the property(ies), HDB case no. and name of assigned valuer as well as verifying that the valuation report with the Bank is identical with that submitted to and accepted by HDB (and submission to CPF Board if there is CPF usage); Malayan Banking Berhad (incorporated in Malaysia) UEN S60FC1376L 4

5 (iii) (iv) your notification to the Bank in the event an independent valuation has been conducted by CPF Board; Prior to any disbursement of the bridging loan/facility, you shall also ensure that any pre-condition imposed by the Bank has been fulfilled, e.g. evidence of sale of the Relevant Party s existing HDB property (including HDB s 1 st letter of Appointment) and the submission to HDB of an authorization letter by the Borrower/Customer to direct HDB to refund the loan/facility to the Bank in the event the purchase of the Property is abortive For JTC land/properties (i) To facilitate issuance of your certification as mortgagor s/chargor s solicitors, the Bank confirms agreement to be subject to the terms and conditions of JTC s latest Practice Circular. Please furnish JTC s confirmation that: (a) there is no outstanding letter of demand or any legal action instituted by JTC against the mortgagor/chargor; (b) there is no outstanding land premium/purchase price, interest/profit or rent due to JTC; (c) there is no breach of the terms and conditions of the Lease/Variation of Lease/Building Agreement/Agreement for Lease relating to the Mortgaged Property; (d) the Environmental Baseline Study (EBS) report (if any) requested has been submitted to JTC; and (e) the minimum investment criteria (if any) has been met and/or the lessee has complied with all JTC investment criteria For restructuring of existing facilities (i) The Bank requires that you review all existing security documentation including all previous facility letter(s) & amended/supplemented letter(s) thereto, in which case, please obtain copies of such documentation from the Bank and prepare any appropriate documentation (including but not limited to upstamping of any mortgage document(s)) as you may deem necessary to protect the Bank s interest. Please note that where the document under review is the Bank s prescribed bank form, your review shall not extend to the contents thereof unless such bank form is not applicable to the transaction For vessel In addition to the documents listed in the Bank s Facility Letter, the Bank requires the following: (i) A certified true copy of the classification certificate and other statutory/trading certificates in compliance with the conditions precedent in the Facility letter and valid beyond the date of first disbursement of the facility as well as not subject to any recommendation/reservation or such other qualifications that may jeopardize/compromise the Bank s security interest [otherwise, please liaise directly with the lending unit/valuer, copied to the Credit Documentation Dept and indicate in the Bank s Report on Title the response by the lending unit/valuer]; Malayan Banking Berhad (incorporated in Malaysia) UEN S60FC1376L 5

6 the requisite endorsements in respect of the loss payable clause and the noncancellation clause for insurance policies/cover notes [to avoid delay in drawdown of the Facility or part thereof, you are to arrange for the requisite maritime insurance upon receipt of notice of drawdown with the effective insurance cover date commencing from the date of drawdown] For foreign Relevant Party The Bank requires that Spousal consent be obtained if the borrower/customer/mortgagor/chargor/ guarantor is an Indonesian national; the spousal consent is to be witnessed by a solicitor (if executed in Singapore)/a Notary Public (if executed outside Singapore) For foreign assets charged to the Bank You shall obtain a legal opinion from a counsel practising at the relevant jurisdiction where the foreign assets are located on the validity, legality and enforceability of the security document(s) executed or to be executed in favour of the Bank. The legal opinion shall cover the applicable points per Annex 1 attached and you shall forward to the Bank this legal opinion when submitting the Report on Title. 3. Searches & Legal Requisitions 3.1. Unless otherwise instructed by the Bank, you shall conduct and make the following searches and legal requisitions promptly: (i) title searches on any property(ies) subject of the Bank s mortgage; (iii) searches on the Relevant Party; and legal requisitions on any property(ies) subject of the Bank s mortgage For title searches (i) If there is a trust/gift in respect of the mortgaged property/charged asset(s), please confirm that there are no adverse implications to the Bank s rights, obligations or security interest. If there is any discrepancy with respect to the tenure and/or area of the property between the results of your searches and those in the Bank s letter of instruction to you, please liaise directly with the valuer/hdb assigned valuer (with copy to the Credit Documentation Unit) and accordingly indicate in your Report on Title the valuer s response For searches on the Relevant Party (i) If any of the Relevant Party is an individual, you shall conduct the following searches: (a) bankruptcy searches; and (b) cause book searches in both the High Court and the Subordinate Courts for the last 2 years. Malayan Banking Berhad (incorporated in Malaysia) UEN S60FC1376L 6

7 If any of the Relevant Party is a corporation, you shall conduct the following searches: (a) (b) (c) winding up search; judicial management search; and cause book searches in both the High Court and the Subordinate Courts for the last 2 years. (iii) (iv) If any of the Relevant Party is a corporation or trading as a firm, you shall also conduct the following: (a) a search at the Registry of Companies ( ROC search ) including the charges that are registered against the Relevant Party (and ensure there are no negative pledges and confirm that no consent is required from prior chargee(s); otherwise, please obtain prior chargee s consent) or (b) a search at Registry of Businesses ( ROB search ). If any of the Relevant Party is a foreign corporation, you shall obtain a legal opinion from a counsel practising at the jurisdiction of the Relevant Party on the validity and enforceability of the security document executed or to be executed by the Relevant Party, as more particularly indicated in the attached Annex 1, and forward to the Bank a copy of the foreign counsel s legal opinion on the matters referred to above when submitting the Report on Title For Legal Requisitions (i) Unless otherwise instructed by the Bank, you shall promptly make legal requisitions to the following authorities (including any other authorities which may be necessary from time to time): (a) the Comptroller of Property Tax, IRAS; (b) Ministry of Environment, Environment Health Department; (c) Public Utilities Board, Sewerage Department; (d) Land Transport Authority, Survey and Lands Department (Street Works); (e) Ministry of Environment, Pollution Control Department; (f) Land Transport Authority, Survey and Lands Department (Rapid Transit Systems); (g) Building and Construction Authority; and (h) Chief Planner, Urban Redevelopment Authority. (iii) For mortgages of HDB properties, you need only apply for legal requisitions to the (a) Comptroller of Property Tax, IRAS; (b) applicable Town Council; (c) Central Provident Fund Board; and (d) Housing & Development Board. Unless otherwise instructed by the Bank, you shall also obtain from the relevant authorities the following: (a) Road Line Plan ( RL Plan ); and (b) Drainage Interpretation Plan ( DI Plan ). As for the DI Plan, you need not obtain the same if the Mortgaged Property(s) is listed in the schedule to Gazette Notification No of 1995 (or any updated gazette notification). Malayan Banking Berhad (incorporated in Malaysia) UEN S60FC1376L 7

8 (iv) (v) You shall not send copies of the replies to the legal requisitions and the RL and DI Plans to the Bank unless they are unsatisfactory or disclose anything adverse. If there are any road &/or drainage reserves, please liaise directly with our in-house valuer Ms Lee Yann Teng at tel: or fax: or Ms Dawne Lye at tel: or the Bank s panel valuer to determine if the value of the property would be adversely affected by such road/drainage reserves. You are to accordingly indicate in your Report on Title the valuer s response Vessels-additional searches (i) You are required to confirm that the admiralty, insolvency, title and other searches as well as the classification certificate is free from recommendations/reservations You shall ensure that: (a) the vessel is duly registered in the port of registration, and (b) the Bank s mortgage is duly registered in the requisite port of registration Debentures-additional searches (i) You are required to obtain the following waivers: (a) Mortgagee s waiver of rights over the charged property affixed to the land, and (b) Landlord s waiver of rights over the charged property affixed to the land. You shall ensure there are no negative pledges granted by the Relevant Party; otherwise, please obtain prior chargee s consent If the Relevant Party is a corporation, and if prescribed by the Companies Act, Cap.50, you shall ensure that: (i) there is no infringement of the Companies Act (Cap 50) [please make your own arrangements to procure the memorandum and articles of association of the Relevant Party] and the company effect with the Accounting & Corporate Regulatory Authority(ACRA), the requisite company charges in favour of the Bank pursuant to the execution of all security document(s) including but not limited to any Deed(s) of Assignment as well as the perfected(if applicable) and registered mortgage(s) for the Mortgaged Property(s). 3.2 If any of the Relevant Party is a corporation, you shall further send to the Bank a copy each of the following items certified as a true copy by a director or the secretary of the Relevant Party when submitting the Report on Title: (i) the resolution passed at the meeting of the board of directors approving the relevant transaction and authorising the affixing of the Relevant Party s seal onto the security and other document; and if applicable, the resolution passed by the shareholders of the Relevant Party at a general meeting approving the relevant transaction. 3.3 You shall ensure that all copies of documents, which are forwarded to the Bank, are current and up to date. Malayan Banking Berhad (incorporated in Malaysia) UEN S60FC1376L 8

9 3.4 All title and court searches are to be updated on the day of any loan/facility disbursement. Please ensure that the final searches are only effected/updated just prior to drawdown (i.e. AFTER all applicable conditions precedent have been met, all security and requisite documents are properly executed and/or perfected to the extent possible under the circumstances and all other obligations have been fulfilled.) You are not required to forward to the Bank copies of the updated title and search results. You need only furnish your confirmation that the updated searches are in order. 4. Disbursement/Implementation of Facility 4.1 Prior to the disbursement/implementation of the Facility or part thereof, you shall, wherever applicable: ensure that it is in order to disburse or implement the Facility or part thereof; ensure that the amount requested for disbursement or implementation is correct (including where applicable, ensuring that the amount of loan/facility disbursement(s) together with the amount of CPF lumpsum withdrawal [where there is CPF utilization] do not exceed the purchase price of the Property as well as ensuring that the amount of CPF usage approved by CPF Board is within the approved limits indicated in the Bank s Facility Letter), and where applicable, such amount requested for disbursement will be used in accordance with the respective purposes specified in the Facility Letter (in the case of purchase, such amount shall be paid directly to the vendor on completion or in accordance with the HDB Agreement for Lease, as the case may be, and if the Property is subject to an existing mortgage which mortgage shall be discharged on completion, such amount shall be paid directly to the existing mortgagee); ensure that all pre-conditions to disbursement have been fulfilled including, where applicable, payment in full of the difference between the purchase price and the Facility confirm the exact figure required to redeem an existing mortgage (redemption figure as at the completion date good after banking hours) at least one day before the completion date in the case of refinancing; ensure that the disbursement is in accordance with the schedule of payment, if applicable; ensure that all security documents have been duly and properly executed by the Borrower(s)/Customer(s)/Mortgagor(s); ensure that the title to the Property and court searches on the Relevant Party(s) are in order and update searches on completion or prior to release of funds; ensure that all legal requisitions replies are satisfactory and are in order; Malayan Banking Berhad (incorporated in Malaysia) UEN S60FC1376L 9

10 4.1.9 ensure that ranking accorded by CPF Board to the Bank s loan(s)/facility(ies) is correct and in the Bank s interest; have lodged a caveat on the Property pursuant to the Bank s Facility Letter/Deed of Assignment (where applicable); ensure that all conditions precedent have been duly satisfied. 4.2 It is therefore your sole responsibility to examine, inter alia and wherever applicable, the title, title deeds, all requisite searches and legal requisitions and ensure that the same is in order and that the security obtained by the Bank is good and fully enforceable by the Bank before advising/ instructing us on disbursement of the Facility or any part thereof. Upon receipt of such advice/instructions for disbursement/implementation from you, we will forthwith proceed with the disbursement/implementation of the Facility or part thereof in full reliance of your professional advice/instructions and on the understanding that the aforesaid duties shall have already been discharged by you prior to such advice/instructions for disbursement/implementation. 4.3 You shall inform the Bank immediately if any of the updated searches &/or any of the above is/are not in order and obtain the Bank s instructions on the matter. 5. Time-lines 5.1 Documentation The Bank will usually execute and return the documents within 2 weeks from its receipt of the same. Bearing this in mind, you shall send the documents to the Bank for its execution well beforehand. 5.2 Fulfilment of conditions precedent All confirmations of meeting conditions precedent are to be furnished to the Bank at least five (5) business days prior to the date of the drawdown. 5.3 Disbursement /Implementation of Facility All notices for drawdown of the banking facility or part thereof should be served on us at least five (5) business days prior to the date of the drawdown. 5.4 Updated Searches All confirmations that updated searches are in order are to reach the Bank no later than 2pm on the date of the drawdown. 5.5 You are to comply with the various time-lines indicated herein with respect to the completion and forwarding of the various forms / documents to the Bank to ensure timely completion of the matter. 5.6 Completion Date is to be indicated clearly in a box on the top right hand corner of all correspondences to the Bank. The Bank will process and prioritize the correspondences to the Bank based on the Completion Date as indicated in the correspondences. Malayan Banking Berhad (incorporated in Malaysia) UEN S60FC1376L 10

11 5.7 The Bank shall not be responsible for any delay due to insufficient time given to the Bank to act on the matter and/or to your failure to comply with the instructions herein. 6. Standard Forms of Correspondence with the Bank 6.1 You shall use the Bank s standard forms to correspond with the Bank e.g. Report on Title for confirming searches and title. 6.2 No alterations/amendments/deletions are to be effected on the Bank s standard forms. Any such forms, which are altered/amended without the Bank s prior consent, may be rejected by the Bank in its absolute discretion and the Bank shall not be liable for any loss and damage as a result of the rejection of such forms. 7. Perfection & Safekeeping of Documents 7.1 Wherever applicable, you shall promptly perfect and register all mortgages in escrow for the Mortgaged Property(s) upon issuance of separate title and you shall ensure that if the Relevant Party is a company, the Relevant Party effects with the Accounting & Corporate Regulatory Authority (ACRA), the requisite company charge(s) in favour of the Bank pursuant to the perfected and registered mortgage(s). 7.2 You shall promptly send all title deeds including wherever applicable, certificates of registration of charges with ACRA and other documents to the Bank for its safekeeping within 2 months of the date of first loan/facility disbursement or completion, whichever is the earlier. 8. Relevant Party 8.1 The term Relevant Party means the Borrower(s)/Customer(s) & the Mortgagor(s) &/or the Chargor(s) &/or the Guarantor(s) &/or the Vendor(s) &/or the Developer(s). 9. Contact Points 9.1 Collection of Cashier s Orders - please contact: For Housing Loans/Facilities ONLY:- Retail Credit Documentation & Administration (RCDA) (tel: / 3492; fax: ) For Mixed banking facilities offered by the Bank s lending unit at the Main Branch Business Centre & Corporate Banking:- Credit Implementation Unit (tel: ) For Mixed banking facilities offered by other Business Centres:- respective Business Centre (contact numbers are indicated in the Bank s letter of instruction to you) 9.2 Details of monthly instalment amount for Housing Loans/Facilities, please contact: Credit Implementation Unit (tel: /7190/7227) Malayan Banking Berhad (incorporated in Malaysia) UEN S60FC1376L 11

12 9.3 Non-execution of security documents/cancellation or termination of banking facilities/abortive transaction, please contact the officer-in-charge at Credit Documentation Unit. 9.4 Collection of title deeds and original security documents including but not limited to mortgages/ agreements executed by the Bank, please contact the officer-incharge at Credit Documentation Unit. Your representative is to produce to the Bank at time of collection, a letter of authorization from you, authorizing him/her to collect the relevant document(s) as well as his/her original NRIC for identification purposes. Kindly ensure that all correspondence [including enclosures] pertaining to the mode of disbursement/drawdown/ implementation of the banking facilities or part thereof including but not limited to your Disbursement Instruction, copies of architects certificates, the Temporary Occupation Permit(s) for the Mortgaged Property(s), relevant sections of the Sale & Purchase Agreement relating to the Schedule of Payment in respect of progressive payment to the Developer as well as your invoice for legal costs is copied to the Credit Executive at Retail Credit Documentation & Administration (RCDA) or the Business/ Branch/ Account Manager at the respective Business Centre/Branch/Corporate Banking/Business Development/Auto Finance Hire Purchase Dept (please refer to the Bank s letter of instruction to you for the facsimile numbers) FAILING WHICH, the Bank will not be able to ensure that disbursement/drawdown/ implementation of the banking facilities or part thereof will be effected by the requisite time-line. In the event a legal subsidy is payable by the Bank, the Bank may not make such payment until all the relevant departments in the Bank have received all the necessary documents. Malayan Banking Berhad (incorporated in Malaysia) UEN S60FC1376L 12

13 Annex 1 The following concerns (whichever applicable) are to be addressed adequately in the foreign legal opinion: - 1) Corporate Status and Power The solicitors should state that the Relevant Party is duly incorporated under the laws of the foreign country and is validly existing under the laws of that country. They must examine the constitutional documents of the corporation and give their opinion as to whether the corporation has the power to furnish the security and whether there are any formalities, as contained in the constitutional documents, which have to be complied with to enable the corporation to furnish the security. Where public registers are maintained, the solicitors should also have done a search and advise the Bank as to the results of such search and the unusual points, if any, which are disclosed by the search. 2) Authority for Execution of Security Document(s) In most jurisdictions, a resolution is required to authorise the execution and delivery of security document(s). The solicitors should advise on such requirements and confirm, after a perusal of such resolutions that the execution and delivery of any security document(s) is duly authorized. Further, that the execution of the security document(s) conforms to the authority granted. 3) Formal Requirements, if any of the Relevant Party The solicitors should advise on whether there are any formal requirements which have to be complied as a condition of the enforcement of the security furnished by the Relevant Party in the foreign jurisdiction. These formalities could include the need to have an attestation of the execution of the security document(s), the possibility of registering the security document(s) with a public office or the need to have the security document(s) stamped. 4) Other Approvals which may be Required The solicitors should confirm that the execution and delivery of the security document(s) is in compliance with and performance by the Relevant Party of the provisions do not violate any laws, statutes, or regulations of the foreign country. The solicitors should also advise on whether there are any other approvals, filings or registration that may be required for the execution, delivery and performance of the security document(s). For example, governmental or central bank approval may be required for guarantees given to foreign parties. 5) Enforceability of Security The solicitors should also indicate the extent of enforceability of the security in accordance with its terms. There may be provisions of the security document(s), which are not enforceable, or there may be defenses in law, which cannot be excluded by the terms of the security document(s). These points should be raised and brought to the attention of the Bank. This will include the nature of obligation of the Relevant Party (i.e. whether the obligation is an unsecured obligation and whether there are any conditions attached to the enforcement of such obligation). 6) Choices of Law The security document(s) will frequently be expressed to be governed by Singapore law. The solicitors should indicate, if the security is to be enforced in the foreign jurisdiction, whether the courts of that jurisdiction would enforce the choice of Singapore law and, if they would not enforce the choice, whether the security would nevertheless still be enforceable. The solicitors should be asked to advise on whether a Singapore judgement obtained against the Relevant Party could be recognised and enforceable in the foreign jurisdiction. The method of enforcement and any limitations on enforcement should be disclosed. Malayan Banking Berhad (incorporated in Malaysia) UEN S60FC1376L 13

14 7) Exchange Control and Withholding Tax The solicitors should also be asked to advise as to whether there are any exchange control limitations on the remittance of any judgement sums paid to the Bank and whether there may be any withholding tax on the same. In addition, any stamp duty or registration or taxes are payable under the laws of the foreign country in connection with the execution, delivery, performance or enforcement of the security. 8) Present Status of the Relevant Party The solicitors should carry out searches on the Relevant Party, where public searches exist in the foreign country, including companies winding up searches, litigation searches and searches to determine if any charges are registered in respect of the Relevant Party. The solicitors should therefore confirm if the Relevant Party is involved in any judicial or legal proceedings, if the Relevant Party is in default of any of its obligations and if the Relevant Party has any secured creditors. Malayan Banking Berhad (incorporated in Malaysia) UEN S60FC1376L 14