Humber/Ontario Real Estate Course 1 Exam Practice

Regarding the handling of offers, when must a brokerage deposit the buyer’s deposit into the trust account?

1. No later than the cheque date.

2. Within five days.

3. Within four business days.

4. Within five business days.

The correct answer is: Within five business days.

The requirement for a brokerage to deposit a buyer's deposit into the trust account within five business days is rooted in the regulations governing real estate transactions. This timeline is designed to ensure that buyer funds are promptly secured and safeguarded within a controlled account, thus minimizing the risk of misappropriation or loss. The five-day period provides a balance between timely handling of the deposit and the practicalities of processing the transaction, such as obtaining checks from the buyer and ensuring all necessary paperwork is in order. Other time frames mentioned, such as four business days or five days, may not adequately provide the same level of security and operational flexibility required for such financial transactions in real estate. Hence, the five-business-day requirement is both a protective measure for buyers and a standard practice in ensuring fiduciary duty is upheld within the industry.