Humber/Ontario Real Estate Course 2 Exam Practice

Which clause in a real estate agreement specifies that the deposit is non-interest bearing unless otherwise agreed?

1. Must be interest-bearing, as required by REBBA.

2. Is deemed to be non-interest bearing, unless otherwise specified in the agreement.

3. Must be deposited by the employing brokerage within three business days.

4. Can only be released from the trust account by mutual release from both parties.

5. Directs that interest earned on the deposit is shared by the buyer and seller.

6. Requires an independent account to hold the deposit.

The correct answer is: Is deemed to be non-interest bearing, unless otherwise specified in the agreement.

In a real estate agreement, the clause that specifies that the deposit is non-interest bearing unless otherwise agreed is deemed to be non-interest bearing, unless otherwise specified in the agreement. This clause allows for flexibility in the agreement and ensures that both parties are aware of the terms regarding the deposit and any potential interest that may be earned on it. Option A is incorrect because there is no requirement under REBBA for the deposit to be interest-bearing. Option C is incorrect as it refers to the timeframe within which the deposit must be deposited by the employing brokerage, not the interest-bearing nature of the deposit. Option D is incorrect as it relates to the release of the deposit from the trust account, not the interest-bearing status of the deposit. Option E is incorrect as it refers to how interest earned on the deposit is shared, which is separate from whether the deposit is interest-bearing or not. Option F is incorrect as it suggests the need for an independent account to hold the deposit, which is not directly related to whether the deposit earns interest or not.