Humber/Ontario Real Estate Course 2 Exam Practice

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What is typically required when a deposit is held in a trust account?

  1. Buyer's permission for interest payment must be in the agreement

  2. Deposit must be cash only

  3. Funds can only be held in non-interest-bearing accounts

  4. Funds must be in the Trustee's personal account

  5. Deposit is forfeit if held for more than a year

  6. Interest must be returned to the buyer immediately

The correct answer is: Buyer's permission for interest payment must be in the agreement

When a deposit is held in a trust account, it is typically required that the buyer's permission for interest payment must be in the agreement. This means that the buyer needs to agree to receive any interest that is accrued on the deposit while it is being held in the trust account. This requirement ensures that both parties are aware of and have consented to how the interest on the deposit will be handled. Options B, C, D, and E are incorrect because they do not align with standard practices for holding deposits in a trust account. Deposits can be made in forms other than cash, funds can be held in interest-bearing accounts, funds must be kept separate in a trust account, and deposits are not forfeited after a year if properly held in a trust account. Option F is incorrect because the interest accrued on the deposit does not necessarily have to be returned to the buyer immediately; the buyer's permission is required for how the interest is handled.

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