Humber/Ontario Real Estate Course 4 Exam Practice

What must a buyer include in the agreement if they wish to receive interest on their deposit?

1. Interest is automatically owed to the buyer

2. Impacts the balance due on closing

3. Include an 'interest on deposit' clause in Schedule A

4. Interest is automatically owed to the seller

5. Include a specific rate of interest in the agreement

6. Interest is determined by the listing brokerage

The correct answer is: Include an 'interest on deposit' clause in Schedule A

To have interest on their deposit, a buyer must include an 'interest on deposit' clause in Schedule A of the agreement. This clause explicitly states the terms under which interest will be paid on the deposit, ensuring that both parties understand and agree to the conditions for interest accrual. By including this clause, the buyer protects their right to receive interest, making it a clear contractual obligation. In scenarios where the clause is omitted, the default position may lead to ambiguity about whether interest is payable, and under what circumstances it would be accrued. Without this specific clause, the seller and the brokerage may not have any obligation to pay interest on the deposit, which could leave the buyer at a disadvantage. Including a specific rate of interest in the agreement is not necessary as part of the basic requirement to simply acknowledge the right to interest—this makes it clearer why just having the clause covers the buyer's interest without needing additional details at that stage.