Humber/Ontario Real Estate Course 3 Exam Practice

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What must be included in the agreement of purchase and sale regarding real estate trust account interest?

All earned interest must be paid to the beneficial owner
Deposit funds cannot be sent via EFT
Funds cannot be placed in an interest-bearing security
Terms for interest payment
Interest rates agreed upon by both parties
Conditions for holding the deposit

The correct answer is: Terms for interest payment

The agreement of purchase and sale must include terms for interest payment because these terms clarify how any interest earned on trust account deposits will be handled. Including this information is essential as it defines the rights and expectations of both the buyer and seller regarding the interest generated by the deposit. This ensures transparency and can help prevent disputes over who is entitled to any earned interest. While aspects such as the distribution of interest and deposit fund management are important, the primary focus in an agreement should specifically address the terms under which interest is to be paid, thereby providing a clear framework for the involved parties.