Humber/Ontario Real Estate Course 3 Exam Practice

In the context of an agreement of purchase and sale, what is one of the features of a supplementary deposit?

1. Must be indicated on Schedule A of the agreement.

2. Does not affect the balance due on closing.

3. Can be made subject to a condition being fulfilled or waived.

4. Can only represent a maximum of 5% of the total purchase price.

5. Must be paid within 30 days of the initial deposit.

6. Must be placed in an escrow account.

The correct answer is: Can be made subject to a condition being fulfilled or waived.

The correct response highlights a key feature of a supplementary deposit: it can be made contingent on a specific condition being fulfilled or waived. This flexibility allows parties involved in the transaction to set terms that can cater to their unique needs, potentially protecting buyers or sellers in various scenarios. For example, a buyer might want to ensure that financing is secured before committing additional funds beyond the initial deposit. This condition allows for a safeguard, ensuring that the buyer isn't at a financial disadvantage should circumstances change. Other options focus on aspects that may not universally apply or may not accurately reflect the nature of supplementary deposits in real estate transactions. Understanding this choice emphasizes the adaptability in real estate agreements, which is crucial in navigating the complexities of property transactions.