A stakeholder holds the fee pending completion
A worked RES examination question on resale option stakeholder, from our Paper 2 bank — with the rule it turns on, and why each of the four options is right or wrong.
The question
On a completed-property resale, the buyer's exercise fee and the conveyancing moneys must be held pending completion. When the seller asks whether he can have the money early, the agent checks how the safeguards work after the reforms to conveyancing-money handling.
Consider the following statements.
- (i) The 4% exercise fee may be held by the Singapore Academy of Law as stakeholder.
- (ii) Once a stakeholder holds the exercise fee, it may be released to the seller before completion at the seller's request.
- (iii) The 4% exercise fee may instead be held in the vendor's solicitors' conveyancing account.
- (iv) If the stakeholder clause is struck off, the 4% is released to the seller directly.
The answer, and why
Answer: B
The rule. The 4% exercise fee may be held by the Singapore Academy of Law as stakeholder, or in the vendor's solicitors' conveyancing account; if the stakeholder clause is struck off, the 4% is released to the seller directly. A stakeholder holds the fee pending completion — it is not released early on the seller's mere request.
Why B is correct. (i) the SAL stakeholder, (iii) the conveyancing-account alternative and (iv) the strike-off releasing it to the seller are correct. (ii) is false — a stakeholder does not release early on request.
The other options.
- C adds the false (ii), early release on request.
- A drops (i), the SAL stakeholder option.
- D drops (iii), the conveyancing-account alternative.
Exam note. Stakeholder holds pending completion; strike out the clause and the seller takes it directly.
More on Resale option stakeholder
Want a full paper instead of one question?
The free half-paper is 20 questions with a Section B case study, explained to this same depth. The paid sets are ten full 80-question papers across Paper 1 and Paper 2, every figure checked against the current IRAS, CEA, HDB, URA and SLA position.
Looking for past-year papers? CEA doesn't publish them — here's what it does publish.
Independent study material. Not affiliated with or endorsed by the Council for Estate Agencies. No pass guarantee — for study use only.