A salesperson must not hold transaction money for a Singapore property sale
A worked RES examination question on handling transaction money, from our Paper 2 bank — with the rule it turns on, and why each of the four options is right or wrong.
The question
Mr Lau asks Ms Naidu to hold a large cash deposit for "safekeeping" until completion of this Singapore property sale.
- (i) Ms Naidu must not hold Mr Lau's cash deposit for this Singapore property sale.
- (ii) On a sale and purchase of Singapore property, the only monies she may handle are the commission and the valuation fee.
- (iii) She may deliver a crossed, account-payee cheque drawn in favour of another party, as a permitted exception.
- (iv) She may hold the cash deposit as long as she issues Mr Lau an official receipt.
The answer, and why
Answer: C
The rule. A salesperson must not hold transaction money for a Singapore property sale. On a sale and purchase, the only monies she may handle are the commission and the valuation fee. The one carve-out is delivering a crossed, account-payee cheque drawn in favour of another party.
Why C is correct. (i) not holding the deposit, (ii) commission and valuation fee only, and (iii) the crossed-cheque exception are correct. (iv) is false — a receipt does not let her hold the cash deposit.
The other options.
- A adds the false (iv), holding the cash against a receipt.
- B drops the no-holding point at (i).
- D drops the commission-and-valuation-fee point at (ii).
Exam note. Never hold the deposit; a receipt changes nothing. The crossed account-payee cheque is the only route in.
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