Humber/Ontario Real Estate Course 3 Exam Practice

Which of the following describes the role of a commission trust account?

1. Used solely for receiving and disbursing remuneration.

2. Returns excess funds over remuneration earned back to the seller.

3. Only disburses earned remuneration to the holding brokerage.

4. Disburses remuneration directly to co-operating brokerage employed salespersons.

5. Maintains both commission and operational funds.

6. Manages all agency-related expenses until transaction settlement.

The correct answer is: Used solely for receiving and disbursing remuneration.

The role of a commission trust account is primarily to handle the monetary transactions involved in real estate commissions in a way that ensures compliance with regulatory requirements and maintains the integrity of the funds. This type of account is specifically set up to receive and disburse payments related to real estate transactions, particularly commissions earned by real estate professionals. A commission trust account is designed to hold funds on behalf of clients, ensuring that these funds are managed properly until they are disbursed as remuneration for services rendered. By using this account, realtors can separate their operational funds from client funds to prevent any potential conflicts of interest or misuse of client money. The correct answer reflects the main function of the account, emphasizing its exclusive purpose in receiving and distributing remuneration, rather than being involved in other activities such as returning funds to sellers or managing operational expenses. Each of the other options suggests functions that are outside the primary role of a commission trust account, which can lead to confusion regarding the account's purpose.