Part of my work as a lawyer for the past 26 years is conveyancing, entailing inter alia, acting for either the vendor or purchaser in the sale and purchase of immovable assets (real estate).
Conveyancing is not for everyone, but if you enjoy watching paint dry, this area of the law is for you. It attracts that special kind of invigorating excitement.
And perhaps the pinnacle in that regard is when I, as the vendor’s solicitor, have to confirm with the purchaser’s bank that the differential sum has been paid.
The question that now begs to be answered is: what is the differential sum?
I believe this is best explained through illustration and the use of some basic maths that I can assure everyone will not cause any lawyer to convulse over, especially given our inherent phobia for numbers.
Now to that illustration.
Let us first assume that a Vendor wishes to sell his home for RM1 million to the Purchaser.
The Purchaser pays a 10 per cent deposit on the execution of the sale and purchase agreement (SPA), which is RM100,000.
In this context, the balance purchase price (BPP) owing to the vendor is RM900,000.
Let us also assume that the purchaser has secured a loan from one of the local vampiric banks for RM700,000.
Even with the loan, there is still a shortfall of RM200,000. That amount is known as the differential sum, ie the difference between the BPP and the loan (RM900,000 – RM700,000).
Ordinarily, within the terms and conditions of the SPA, the differential sum must be paid first by the purchaser to the vendor before the bank is required to disburse the loan for the vendor’s benefit.
In practice, the vendor’s solicitors will formally confirm with the bank’s solicitors that the differential sum has been paid, and only thereafter is the said Loan disbursed.
I hope everyone is clear so far.
However, let us change only ONE aspect of the variables provided. Let us assume that the BPP and the Loan equal RM900,000. In this circumstance, no differential sum exists.
But here lies the conundrum.
Even where there is no differential sum, from my experience, almost all banks would insist that I provide them with a fatuous confirmation, despite its redundancy.
It is not good enough if I were to state in the written confirmation that the question of differential sum is not applicable to the exercise at hand.
Thankfully, obstinacy is what drives me. From the days I began to practice, rarely, would I voluntarily capitulate over what I see as nuances of idiocy embedded in human form.
I am currently going through one such needless episode. After reminders to the bank’s solicitors that no differential sum exists, and with no definitive progress, I took it upon myself to complain about the matter to Bank Negara Malaysia.
At the moment of writing, I have no idea how this will pan out, but I am absolutely determined, wherever and whenever possible, to do everything within my means to see that we have a thinking and empathetic nation at every societal level in this beautiful country.
Failing that, there is always online shopping for me to momentarily numb my senses from the constant exposure to that human idiocy.
This is the personal opinion of the writer and does not necessarily represent the views of Twentytwo13.