Humber/Ontario Real Estate Course 3 Exam Practice

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

  1. REBBA requires that a minimum 5% deposit, based on the sale price, be obtained by a registrant for any conveyance of an interest in real estate

  2. Deposit cheques must be made out to the listing brokerage for any agreement of purchase and sale negotiated by a registrant

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

  4. If a person entitled to a deposit held in trust by the brokerage cannot be located within three years, those funds should be sent to RECO

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 is essential because a deposit serves as a sign of good faith in a real estate transaction, intending to protect both the buyer and the seller. A currently dated cheque ensures that it can be cashed or deposited promptly, which is crucial in formal real estate dealings. Having a cheque that is capable of being presented for payment underscores the need for it to be legitimate and actionable; this means that the brokerage handling the transaction should be able to process the cheque without any issues. A deposit's successful processing is vital for the transaction's progression, as it demonstrates the buyer's commitment and secures the property in question while the transaction concludes. Considering the other statements, it is important to note that there is no legal requirement under REBBA for a minimum deposit amount of 5% on all real estate transactions; the amount can vary based on agreements between parties. Additionally, while deposit cheques are typically made out to the listing brokerage, this is not a definitive requirement for every agreement, as it can depend on the practices or policies of the brokerages involved. Lastly, the handling of unclaimed deposits after three years may not

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