Humber/Ontario Real Estate Course 4 Exam Practice

What is required for a brokerage when a regulated trust and loan company deposits $50,000 for a property purchase?

1. A receipt of funds record is necessary for the brokerage.

2. It's required if the deposit is made to a lawyer's account.

3. No receipt of funds form is needed for this deposit.

4. Since the deposit is over $10,000, no record is necessary.

5. A funds record must be completed due to the high amount.

6. The brokerage must notify FINTRAC about the deposit.

The correct answer is: No receipt of funds form is needed for this deposit.

In the context of real estate transactions and the handling of deposits, a brokerage is obligated to follow specific protocols regarding the receipt of funds. When a regulated trust and loan company deposits $50,000, it is considered a significant transaction; however, if the deposit is made directly to a lawyer's account, then a receipt of funds record is not required by the brokerage. This is because the funds are not being held in the brokerage's trust account, thus relieving the brokerage from the necessity to document a receipt for this transaction. In situations where the deposit does not involve the brokerage's own trust account, it simplifies the compliance process, as the brokerage is not directly responsible for managing or recording that deposit. This distinction is crucial in understanding why the requirement for a receipt of funds record is waived in this particular scenario. Additionally, the need for notification to regulatory bodies like FINTRAC typically arises from specific circumstances surrounding transactions, such as suspicious activity or cash transactions, rather than just the amount deposited. In this case, the nature of the deposit and its destination (the lawyer's trust account) dictate the practices required, confirming that no receipt of funds form is needed.