The deposit money should be electronically transferred from the buyer’s solicitor account to the seller’s solicitor account, or by a cheque that is drawn in favour of the seller’s solicitor bank account.
As per SCPC 2.2.2 the deposit should be paid by direct credit. This is done to avoid problems that may be caused if the cheque is drawn on a personal bank account and the cheque gets dishonoured. This is not the case in auction sales.
When the buyer pays the deposit money, he owns a lien over the property for the amount of deposit. This lien can be enforced by a court and should be registered under Class C of land charges. When the buyer is in occupation of the land, the lien may have an overriding interest in the registered land. However, it is uncommon that the lien is registered, unless a problem arises in the transaction.
Photo courtesy: neepster