réside

[alan gould]

are these 2 sentences formal or would they b said in conversation?  

la différence réside dans...

c’est justement là que réside le problème

in english there's an equivalent but only when referring to powers or authority:

"legislative powers reside with the federal assembly"

only an educated person would use it.  

[Chantal Savignat]

c’est justement là que réside le problème : would be said in conversation. but it depends on conversation. rather with educated person. and not with the postman, about the letter he lost (we would say "c'est là qu'est le problème" or "c'est là qu'il y a un problème") but with my coworker (computer technology) about a  problem, yes it's possible.