Under the Standard Conditions of Sale (Fifth Edition - 2018 revision), how may the deposit on exchange of contracts be paid?

• A. By bank draft
• B. In cash at completion
• C. By personal cheque from the buyer
• D. By electronic means or cheque drawn from the buyer's lawyer's client account

Answer: (D)

The deposit on exchange must be handled in a way that keeps funds safely in trust from the moment of exchange and ensures they are readily traceable to complete the purchase. Paying by electronic means or by a cheque drawn on the buyer’s solicitor’s client account achieves this: the money sits in a professional trust account and can be transferred to the seller’s side on completion, with a clear audit trail. Cash at exchange isn’t secure or traceable in the same way, and a personal cheque can risk funds not clearing or being dishonoured. A bank draft isn’t necessarily drawn on the buyer’s solicitor’s client account, which is why the standard method specifies electronic transfer or a cheque from the buyer’s solicitor’s client account.