Emma is selling her investment condo unit in downtown Toronto and receives an offer with a $15,000 deposit. The Agreement of Purchase and Sale specifies that the deposit is to be held in trust by the listing brokerage. However, Emma's lawyer suggests that the deposit be released directly to her once all conditions are fulfilled. What should Emma's salesperson advise her regarding her lawyer's suggestion?

Question: Emma is selling her investment condo unit in downtown Toronto and receives an offer with a $15,000 deposit. The Agreement of Purchase and Sale specifies that the deposit is to be held in trust by the listing brokerage. However, Emma's lawyer suggests that the deposit be released directly to her once all conditions are fulfilled. What should Emma's salesperson advise her regarding her lawyer's suggestion?

Answer options:

• The deposit can be released directly to her once conditions are fulfilled if all parties agree in writing. ✅ The deposit must remain in the listing brokerage's trust account until the actual closing date as per TRESA.
• The deposit can be released to her, but only if the buyer's lawyer also agrees.
• Only the Real Estate Council of Ontario (RECO) can authorize the early release of the deposit.

Correct answer: The deposit must remain in the listing brokerage's trust account until the actual closing date as per TRESA.

Explanation: According to TRESA, 2002 (O. Reg. 567/05, s. 26), a deposit held in a real estate trust account must remain there until either the transaction closes (at which point it's typically applied to the purchase price), the agreement is terminated, or a mutual release signed by all parties authorizes its disbursement. It cannot be released directly to the seller prior to closing, even if conditions are fulfilled, without a mutual agreement and direction to the brokerage.