Humber/Ontario Real Estate Course 2 Exam Practice

When interest will be paid on a deposit held in a brokerage's real estate trust account, what is required?

1. Brokerages must maintain both interest-bearing and non-interest bearing trust accounts.

2. Disclose the interest rate to the parties involved in the agreement.

3. No disclosure is required in the agreement regarding the interest rate.

4. The interest rate does not need to be disclosed if the trust account has a variable interest rate.

The correct answer is: Disclose the interest rate to the parties involved in the agreement.

When interest will be paid on a deposit held in a brokerage's real estate trust account, it is required to disclose the interest rate to the parties involved in the agreement. This transparency ensures that all parties are informed about how the interest on the deposit will be handled. It is important for real estate professionals to disclose this information to maintain trust and provide clarity in the transaction process. Option A is incorrect because brokerages are not required to maintain both interest-bearing and non-interest bearing trust accounts. Option C is incorrect as disclosure regarding the interest rate is required in the agreement. Option D is incorrect as the interest rate must be disclosed regardless of whether the trust account has a variable interest rate.