Humber/Ontario Real Estate Course 1 Exam Practice

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If Buyer Tanveer has submitted an offer with a deposit, what is the correct statement?

  1. Deposit funds must be deposited in the brokerage's real estate trust account within five days of receipt by that brokerage.

  2. Deposit funds once placed in the brokerage's real estate trust account, are insured under the RECO Insurance Program.

  3. Deposit funds would be placed in the real estate trust account only if they exceed the minimum requirement of $5,000.

  4. Interest is never paid when deposit funds are placed in the brokerage's real estate trust account.

The correct answer is: Deposit funds must be deposited in the brokerage's real estate trust account within five days of receipt by that brokerage.

When a buyer submits an offer with a deposit, the correct statement is that the deposit funds must be deposited in the brokerage's real estate trust account within five days of receipt by that brokerage. This is in accordance with the Real Estate and Business Brokers Act, 2002 (REBBA), which mandates that all deposits received must be placed in the brokerage's trust account within a specific timeframe to ensure the proper handling of client funds and protect the interests of all parties involved in the transaction. The other options are incorrect because: - Option B stating that deposit funds are insured under the RECO Insurance Program is not accurate. The RECO Insurance Program provides insurance coverage for specific instances such as fraud or misappropriation of funds, but it does not insure deposit funds placed in the brokerage's trust account. - Option C stating that deposit funds would be placed in the real estate trust account only if they exceed the minimum requirement of $5,000 is misleading. All deposit funds, regardless of the amount, must be placed in the brokerage's trust account within the specified timeframe. - Option D claiming that interest is never paid when deposit funds are placed in the brokerage's real estate trust account is incorrect. In certain situations and as agreed upon in the agreement

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