Humber/Ontario Real Estate Course 1 Exam Practice

Which of the following deposit-related disclosures are required under the Real Estate and Business Brokers Act?

1. If trust funds are held in an interest bearing account, the rate of interest must be disclosed to the person for whom the deposit is made.

2. If trust funds are held in an interest bearing account, a 2% minimum rate of interest must be paid to the person for whom the deposit is made.

3. If trust funds are held in an interest bearing account, the interest to be paid must be disclosed to all parties.

4. The individual remuneration paid to brokerages or salespersons from the commission trust account must be disclosed to all recipients.

The correct answer is: If trust funds are held in an interest bearing account, the rate of interest must be disclosed to the person for whom the deposit is made.

The correct answer is A because under the Real Estate and Business Brokers Act, if trust funds are held in an interest-bearing account, the rate of interest at which these funds are held must be disclosed to the person for whom the deposit is made. This disclosure provides transparency on how the client's funds are being managed and ensures that the client is aware of any interest earned on their deposit. Options B, C, and D are incorrect: B is incorrect because there is no specific minimum rate of interest stipulated in the act that must be paid to the person for whom the deposit is made. C is incorrect because while disclosure of the interest to be paid is necessary to the client, it is not required to be disclosed to all parties involved. D is incorrect because the individual remuneration paid to brokerages or salespersons from the commission trust account is a separate matter and is not specifically required to be disclosed under the Real Estate and Business Brokers Act in relation to deposit-related disclosures.