Pre-completion and completion — SQE1 Property question
A worked single-best-answer question on pre-completion and completion, with why each wrong option is wrong — the way SQE1 traps candidates.
Rhys is buying a house from Sana with vacant possession under the Standard Conditions of Sale (5th edition), with completion fixed for Friday. Sana vacated the house on Thursday and handed the keys to the estate agent. Because of a delay at Rhys's lender, the completion money reached Sana's solicitor's client account at 3.15 pm on Friday, and the transaction was completed then.
What is the effect of the time at which the money was received?
- ACompletion is treated as taking place on the next working day for the purposes of apportionments and compensation for late completion.
- BNone, because completion is effective on the completion date whatever time the money arrives.
- CSana may rescind the contract immediately, because time for completion is of the essence.
- DCompletion is treated as taking place on the next working day only if Sana had not vacated by 2.00 pm.
- ERhys must pay compensation for a full week, because late completion is calculated in whole weeks.
Show answer and reasoning
Rule: Under the Standard Conditions, completion money received after 2.00 pm is treated as received on the next working day for apportionments and late completion compensation.
- B The Standard Conditions provide that money received after 2.00 pm is treated as received on the next working day for these purposes. (wrong rule)
- C Time is not of the essence of the completion date under the Standard Conditions; a notice to complete is needed first. (wrong rule)
- D The vacant-possession exception protects the buyer where the seller has not vacated; here Sana had vacated, so the 2.00 pm rule applies normally. (right rule, wrong facts)
- E Compensation is calculated daily at the contract rate, not in weeks. (wrong rule)
Source: Standard Conditions of Sale (5th edn, 2018 revision), SC 6.1.2-6.1.3