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Review Your SQE 1 Practice Records

Examination Timing: 00H02M02S

James, a solicitor at Maple & Associates, is acting for Mr. Taylor, who is selling his home for £350,000. When Mr. Taylor purchased the house, he took out a mortgage for £200,000 from a building society, of which £50,000 remains outstanding. James acts for both Mr. Taylor and the building society with respect to this sale. How should James record the receipt of the completion monies from the buyer's solicitor?

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Your selected option: B

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James has the option to choose between recording all the completion monies in the seller's client ledger before transferring the £50,000 mortgage redemption monies to the lender's client ledger, or splitting the receipt so that the mortgage redemption monies are recorded directly in the lender's client ledger, with the remaining proceeds going to the seller's client ledger. Option A is incorrect as it does not address the solicitor's duty to the lender. Options B and C incorrectly use the word "must" rather than "can" or "may," which suggests a lack of flexibility. Option E is incorrect because it would be a breach of the Rules to record the seller's share of the completion monies in the lender's client ledger. 


Key Point: The SRA Accounts Rules provide flexibility in handling client monies, allowing solicitors to choose appropriate methods for recording transactions, provided that they comply with regulatory requirements and maintain clear records for transparency.

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