Humber/Ontario Real Estate Course 4 Exam Practice

Which of the following statements is correct regarding the handling of deposits?

1. A minimum 5% deposit of the sale price must be obtained for any real estate transaction.

2. Deposit cheques must be made out to both the buyer's and seller's brokerages.

3. Deposit cheques must be currently dated and capable of being presented for payment.

4. Funds should be forwarded to RECO if the recipient of a deposit held in trust is unknown after three years.

5. Registrants must provide deposit refunds within 15 business days if a transaction fails.

6. The listing brokerage must hold all deposits in an individual trust account.

The correct answer is: Deposit cheques must be currently dated and capable of being presented for payment.

The correct statement regarding the handling of deposits is that deposit cheques must be currently dated and capable of being presented for payment. This ensures that the deposit can be processed immediately upon acceptance of an offer. A cheque that is not currently dated may lead to complications during the transaction process, as it could be considered stale-dated if it's not within the typical timeframe for negotiation and closing. This requirement supports the integrity of the transaction by ensuring that funds are accessible when needed. Other statements present various misunderstandings about deposit procedures. For example, there are no minimum percentage requirements for deposits as they can vary based on negotiation. Additionally, while certain payments might be held in trust by a brokerage for safekeeping, there are specific regulations regarding how funds should be managed, not necessarily requiring joint cheques. Moreover, there are established processes for handling unclaimed deposits that may not involve forwarding them to RECO after a particular duration. The requirement for registrants to provide refunds within 15 business days applies only under specific conditions and circumstances, rather than being a blanket rule applicable to all transactions. Finally, while deposits may be held in a trust account, they are not exclusively required to be maintained in an individual trust account by the listing brokerage; other arrangements