Humber/Ontario Real Estate Course 2 Exam Practice

Broker Kent issues a cheque from the real estate trust account incorrectly, resulting in a deficit. The error is found three days later. What should be done in this situation?

1. A sum equal to the shortfall must be immediately put back into the trust account, once the mistake is identified.

2. Broker Kent should rectify the shortfall during the next real estate trust account reconciliation.

3. Administrative personnel should not be preparing cheques for signatures.

4. Broker Kent must rectify the shortfall within five business days.

The correct answer is: A sum equal to the shortfall must be immediately put back into the trust account, once the mistake is identified.

In this scenario, the correct answer is A. A sum equal to the shortfall must be immediately put back into the trust account once the mistake is identified. In real estate transactions, it is crucial to maintain the integrity of the trust account to ensure that all client funds are handled appropriately. If a deficit occurs due to an error, the shortfall should be corrected as soon as it is discovered to prevent any further issues or discrepancies. It is essential to address any discrepancies in the trust account promptly to uphold trust and transparency in real estate transactions. Taking immediate action to rectify the shortfall demonstrates accountability and responsibility in handling client funds. Options B, C, and D are incorrect because they do not prioritize the immediate correction of the deficit in the trust account. Waiting until the next reconciliation, involving administrative personnel in cheque preparation, or delaying the rectification for five business days can all lead to further complications and potential violations of trust account regulations.