FAQ – “The deposit is due upon subject removal. My client has provided the cheque and I have sent a copy to the other agent, but I am very busy and don’t live near the office. Can I drop it off in a few days?”
In this video Steve Jamieson, Managing Broker of RE/MAX Crest Realty Westside, discusses the requirements for submitting deposits to your brokerage, and procedures to follow if a deposit has not been received by a buyer when due.
Here’s a brief summary:
Deposits must be promptly delivered to the brokerage
Unequivocally NO! You may not drop the deposit off “in a few days.” Deposits must be delivered promptly to the brokerage. However, if you receive a deposit late at night, it is acceptable to deliver it first thing in the morning. Ensure you send a copy of the deposit to the listing agent as proof of receipt.
Refer to Section 27(1) of RESA
Payment into trust account
27(1) A licensee engaged by a brokerage must promptly pay or deliver to the brokerage
- all money held or received from, for or on behalf of a principal in relation to real estate services,
Additionally, always ensure that your Contracts of Purchase and Sale are submitted to the office immediately after ACCEPTANCE. Do not wait until subject removal. Refer to Council Rule 3-2(1).
Associate broker and representative responsibilities
3-2 (1) Records — An associate broker or representative must promptly provide to the managing broker the original or a copy of all records
Your Conveyancing Department will then be expecting the deposit, and will be equipped to notify the Managing Broker if the deposit has not been received in time. It is one of the Managing Broker’s responsibilities to inform all parties to a trade if a deposit has not been received when due. Refer to Council Rule 3-1(4).
Managing broker responsibilities
3-1(4) Notice to parties respecting deposits – A managing broker must ensure that all parties to an agreement giving effect to a trade in real estate are immediately notified if
(a) a deposit contemplated by the agreement that, if received, would be held by the related brokerage as a stakeholder under section 28 of the Act has not been received, or
(b) a deposit cheque or other negotiable instrument that the brokerage received in respect of a deposit referred to in paragraph (a) has not been honoured.
3-1(5) Notice under subsection (4) must be given in writing or confirmed in writing.
If a deposit is late, the Contract of Purchase and Sale is voidable at the seller’s discretion. Whether you are representing the buyer or the seller, it is your responsibility to notify your client of the consequences.
Always keep your Managing Broker informed so that the correct procedures can be followed. Late deposits can have serious ramifications for all parties, including:
- Your buyer missing out on the home they want
- A seller missing an opportunity to accept another offer
- Disciplinary action from the Council if the situation is not handled correctly.
Please note: The Frequently Asked Question video series is used for training purposes within our group of RE/MAX offices. If you are licensed at a different brokerage, you must refer to your own Managing Broker for advice.