During its monthly reconciliation, an Alberta brokerage determines that its trust account is short by $5,000. Under the RECA Rules, what must the brokerage do?
Correct Answer
C) Deposit its own money into the trust account as soon as the shortage amount is determined
Rule 88 requires a brokerage, whenever there is a shortage of money in a trust account, to deposit the brokerage's own money into the account as soon as the amount of the shortage is determined. Here the amount is known, so the brokerage funds it immediately; Rule 89 requires written notice to the registrar only where the amount is not yet determined or the brokerage cannot fund the shortage immediately.
Why This Is the Correct Answer
Rule 88 says that if at any time there is a shortage of money in a trust account, the brokerage shall deposit the brokerage's own money into the account as soon as the amount of the shortage is determined. The shortage amount is known here, so the brokerage must fund it right away.
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A real estate brokerage discovers an error in their trust account reconciliation showing a shortage of $5,000. What is the most appropriate immediate action under Ontario's regulations?
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During its monthly reconciliation, an Alberta brokerage finds trust funds that cannot be accounted for, and it has not yet determined how large the shortage is. Under Rule 89(1) of the RECA Rules, what must the broker do?