SQE1 sample questions

Question 91

A firm acts for the landlord of a block of five flats which are held on long leases. The firm does not act for any of the tenants.

The firm has recently resolved a dispute which arose regarding the amount of service charge due in respect of each flat. The tenants claimed that an item of expenditure of £5,000 was not properly due under the service charge provisions of the leases. Pending resolution of the dispute, each tenant paid £1,000 to the firm to be held in the firm’s general client bank account.

The landlord has now accepted the firm’s advice that the disputed amount is not recoverable from the tenants. The landlord asks the firm to make an immediate payment of £1,000 to each of the tenants from the funds the firm is holding in its general client bank account.

Is the firm permitted to make a payment to each tenant as requested by the landlord?

A. Yes, because there is a connection between the payments and the delivery of the firm’s regulated services.

B. No, because the firm does not act on behalf of any of the tenants.

C. No, because the retainer between a solicitor’s firm and a client does not permit payments to third parties.

D. No, because the payments are not linked to the firm’s underlying service in relation to the property dispute.

E. Yes, because the payments will be made within a short period of the dispute being resolved.


A - Yes, because there is a connection between the payments and the delivery of the firm’s regulated services.

Candidates who answered correctly: 68%


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