A brokerage receives a cheque for a deposit on a residential purchase and sale agreement. The deal collapses before the deposit is paid into the trust account. What is the brokerage's obligation regarding this cheque?

Question: A brokerage receives a cheque for a deposit on a residential purchase and sale agreement. The deal collapses before the deposit is paid into the trust account. What is the brokerage's obligation regarding this cheque?

Answer options: ✅ The brokerage must still deposit the cheque into the trust account and then issue a refund.

• The brokerage can return the cheque to the buyer immediately, as the deal collapsed.
• The brokerage must seek legal advice before returning the cheque to the buyer.
• The brokerage must only return the cheque if both parties mutually release the funds.

Correct answer: The brokerage must still deposit the cheque into the trust account and then issue a refund.

Explanation: RECA Rules, Section 59(1)(a) requires that money received in connection with a trade must be deposited into the trust account within one business day, regardless of subsequent events such as a collapsed deal. The release of funds from the trust account is governed by trust account release procedures.