Humber/Ontario Real Estate Course 3 Exam Practice

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Prepare for the Humber/Ontario Real Estate Course 3 Exam with our comprehensive quiz featuring multiple-choice questions. Enhance your understanding of real estate concepts and strategies to excel in your exam!

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According to REBBA requirements, how is a deposit specified in an agreement of purchase and sale held in trust?

It must be interest bearing.
It is non-interest bearing unless otherwise specified.
It must be deposited within three business days.
It is returned if the conditions are not met.
It can only be used for closing costs.
It is optional for the buyer to provide a deposit.

The correct answer is: It is non-interest bearing unless otherwise specified.

A deposit specified in an agreement of purchase and sale is typically non-interest bearing unless otherwise specified. This means that in most circumstances, the funds will not earn interest while held in trust. The Real Estate and Business Brokers Act (REBBA) outlines these guidelines to ensure clarity and fairness in real estate transactions. This understanding helps buyers and sellers know that the deposit they are placing into trust will not generate interest income during the holding period, which is a standard practice unless the agreement specifically states that it will be held in an interest-bearing account. Knowing this ensures that all parties are aligned with expectations regarding the handling of the deposit, which is crucial for transparency in real estate transactions.