Question:
What is the rule for how quickly a brokerage has to provide a deposit receipt?
I am concerned about e-transfers, direct deposits and wire transfers.
Since the days of dropping deposits off at reception and getting a physical receipt right away are behind us, we now have to wait for proof the funds went in, and to match the deposit up with the deal.
Answer:
The correct answer is “within a reasonable period of time in all of the circumstances”. That’s the common law since there is no Statutory or Regulatory provision.
There is an obligation to place the funds into the trust account within 5 business days of receipt. But, that doesn’t cover the person who sent it in, or the time limit to get back to them with a receipt for their records.. Certainly, at the present time the extended limit would be 30 days after the end of the month, which is the obligation to reconcile the account.
Since a late payment can trigger legal rights in favour of a Seller, you would want to ensure that if you are acting for a Buyer, you have evidence yourself that it was submitted within the correct time, and forward that information to the Listing Brokerage.
Large Brokerages face difficult issues, since they are often in receipt of funds which they can’t match up properly because they don’t have sufficient identifying information.
Brian Madigan LL.B., Broker