Humber/Ontario Real Estate Course 3 Exam Practice

A real estate trust account deposit must be:

1. Made within three days, according to REBBA requirements.

2. Interest-bearing unless specified otherwise.

3. Non-interest bearing unless specified otherwise.

4. Made in person by both the buyer and seller.

5. Refundable under all conditions.

6. Handled by the buyer's legal representative.

The correct answer is: Non-interest bearing unless specified otherwise.

A real estate trust account deposit must be non-interest bearing unless specified otherwise because this aligns with the regulatory framework governing real estate transactions in Ontario. According to the Real Estate and Business Brokers Act (REBBA), when a deposit is placed in a trust account, it typically does not accrue interest unless there is an agreement between the parties to do otherwise. This ensures that the deposit remains secure and is used solely for its intended purpose within the transaction. In many cases, the expectation is that the buyer's deposit will be held in trust until the deal closes, at which point it can be applied toward the purchase price or handled as per the terms of the agreement. It's important for both buyers and sellers to understand this practice, as it can have implications regarding the handling of funds and the expectations surrounding those funds during the transaction process. Other options provided may not accurately reflect the procedures or legal standards essential to real estate transactions. For instance, deposits do not have to be made in person by both parties, nor are they refundable under all conditions, since various factors such as breach of contract may affect the refundability of the deposit. Thus, the depiction that deposits are non-interest bearing unless otherwise specified captures the standard practice accurately.