A real estate brokerage receives a court order to freeze trust funds related to a specific transaction. The brokerage has already received instructions from their client to release these funds for the property closing. What should the brokerage do?
Correct Answer
A) Comply with the court order and freeze the funds until further legal direction
Court orders take precedence over client instructions when it comes to trust fund management. The brokerage must comply with the legal order to freeze funds and seek legal counsel for guidance on next steps while maintaining proper trust account procedures.
Why This Is the Correct Answer
Court orders are legally binding and take absolute precedence over all other instructions, including client directives. Real estate brokerages must comply with judicial orders immediately to avoid contempt of court charges. The brokerage has no choice but to freeze the trust funds as ordered, regardless of client instructions or fiduciary duties. Legal compliance supersedes all other obligations, and the brokerage must seek legal counsel while maintaining proper trust account procedures until the court provides further direction.
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An Ontario brokerage receives a $50,000 deposit cheque in trust on a Friday evening. By when must it be deposited into the brokerage's real estate trust account?
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