Humber/Ontario Real Estate Course 4 Exam Practice

What consideration might a commission trust account handle exclusively?

1. All brokerage financial transactions

2. Any client or customer refunds

3. Clearance of any outstanding brokerage debts

4. Receiving and disbursing solely remuneration

5. Marketing expenses

6. Administering employee benefits

The correct answer is: Receiving and disbursing solely remuneration

A commission trust account is specifically designed for handling funds that belong to clients, such as deposits, commissions, and remuneration for services rendered in a real estate transaction. When considering the options, the correct response emphasizes that the account is utilized exclusively for the receiving and disbursing of remuneration, which is the payment made for services provided, particularly in regard to commissions earned by agents for facilitating real estate transactions. The focus on remuneration as the primary function of a commission trust account aligns with regulations that govern real estate transactions, ensuring that client funds are managed separately and protected. Such accounts are not meant for broader brokerage financial transactions or operational expenses, as they are specially designated for client-related revenue that needs to be accounted for accurately and ethically. In contrast, handling all brokerage financial transactions would overextend the purpose of a trust account. Similarly, managing client or customer refunds, clearance of outstanding brokerage debts, marketing expenses, or administering employee benefits might not meet the strict regulatory and legal definitions tied to a commission trust account, which should remain focused on client funds related to commissions and service payment. This ensures proper fiduciary duty and compliance within the real estate sector.