Dual Contract

Dual contract means to make two versions of a sales contract used to get financing at the desire loan price.
 
e.g. want to get 90 million JPY loan for 90 million JPY property
You need to make one contract or property outline document showing the property price is 100 million JPY for banks. On the other hand you also make the other contract showing the actual price of 90 million JPY.
Banks believe the property price is 100 million JPY so for a bank who gives 90% loan of the sales price, you can get a loan of 90 million JPY.

Therefore, originally you could have only gotten 90 million x 90% = 81 million but by showing a 100 million contract you were able to get 100 million x 90% = 90 million as you wished for.

It’s illegal so you will get a penalty such as repayment full loan amount.
However there are many investors who don’t have much cash so this dual contract method is let go on.


Dual Contract
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