Humber/Ontario Real Estate Course 3 Exam Practice

When must a receipt of funds record be prepared in the context of real estate transactions?

1. Only if the deposit exceeds $5,000.

2. Only if the transaction is suspected of being fraudulent.

3. For every fund received, subject to certain exceptions.

4. As required by the Real Estate Council of Ontario, under REBBA.

5. If the transaction amount is less than $10,000.

6. Whenever cash is received in a transaction.

The correct answer is: For every fund received, subject to certain exceptions.

The requirement to prepare a receipt of funds record for every fund received, with specific exceptions, is essential in maintaining transparency and accountability in real estate transactions. This practice helps ensure that all monetary exchanges are properly documented, creating a reliable trail of financial transactions. It is crucial for both the protection of clients and compliance with regulatory standards. Having a consistent policy of issuing receipts for funds received minimizes the risk of disputes and reinforces trust in the fiduciary responsibility that agents owe to their clients. There are indeed certain exceptions that may apply, but the overarching rule is to document all transactions thoroughly. In the context of real estate, this aligns with the regulatory requirements that promote integrity and protect all parties involved in the transaction. Thus, preparing a receipt of funds record as a standard practice supports good business practices and regulatory compliance.