Deposits

Revised March 31, 2026

Receiving Deposits

Real estate deposits are held in a brokerage’s trust account for all parties to the transaction. The broker is the trustee of these funds for both parties. The funds are held in accordance with the terms of the Agreement and are also subject to the requirements of the Act, the By-law and Commission Policies.

Brokerages can implement a policy on what legal tender they will receive. For example, a brokerage may have a policy to refuse cash, EFT, wire, personal cheques etc. If a brokerage refuses to receive a certain type of deposit, the following process must be followed.

Brokerage clients must consent to this policy and be advised of any potential implications of doing so. This policy must be clearly identified in the brokerage agreement. The brokerages who implement such a policy are responsible to notify other brokerages with whom they are engaging in transactions. If a brokerage is dealing with an unrepresented party (buyer or seller) they must be advised in writing of this policy.

The buyer's licensee is responsible for confirming what methods the receiving brokerage will accept and ensuring their client understands this instruction.

Clauses 1.1 (deposit) in the current version of Form 400: Agreement of Purchase and Sale (effective since January 3, 2022) states: 

"The Buyer submits _______________________________________ dollars ($ ______________________________________________ CDN) on or before the _________ day of _________________, 20_________, payable to: _______________________________________________________________ in trust, as a deposit to be held pending completion or termination of this Agreement and to be credited towards the purchase price on completion Balance of purchase price to be paid on closing or as otherwise stated in this Agreement. If the deposit is not delivered as specified, the Seller shall be at liberty to declare this Agreement null and void."

The Commission communicated to the industry on June 25, 2025, that our interpretation of ‘delivered as specified’ should be understood to mean that the deposit funds have been deposited into the brokerage’s trust account by the deadline stated in the agreement. Upon review by the forms committee and advice by legal counsel, the NSREC has approved the following revision to the deposit clause of the APS:

"The Buyer submits _______________________________________ dollars($ ______________________________________________ CDN) on or before the _________ day of _________________, 20_________, payable to (payee):_______________________________________________________________ in trust, as a deposit to be held pending completion or termination of this Agreement and to be credited towards the purchase price on completion. Balance of purchase price to be paid on closing or as otherwise stated in this Agreement. If the deposit is not delivered as specified, the Seller shall be at liberty to terminate this Agreement. If a deposit is being paid electronically, it is deemed received when it is available for deposit to the payee’s trust account."

The effective date of the APS with the revised deposit clause is May 1, 2026.

Based on this revision, ‘deemed received when it is available for deposit’ is understood to mean that the brokerage has received notification from their financial institution that the deposit has been sent to the brokerage’s trust account on or before the deposit due date identified in the agreement.

For example:

• If a buyer sends an e-transfer to the receiving brokerage, the funds are deemed received the day the brokerage receives an e-mail notification from Interac alerting them of the deposit and not the day the brokerage accepts the deposit into their trust account.
• For wire transfers, the funds are deemed received if the buyer or their agent provides the receiving brokerage with a payment confirmation number or code from the buyer’s financial institution prior to the deadline.

In regards to wire transfers, buyer agents must advise their clients to obtain and provide this confirmation number or code to their agent upon facilitating the wire transfer. If the receiving brokerage has not received the funds and/or been provided with a confirmation number or code by the deadline, the deposit is not deemed received.     

A reminder that if any deposit has not been received by the deadline in the APS, the receiving brokerage is to advise the seller immediately in writing and seek instruction, per the Brokerage Transaction and Trust Account Policy, section 506 (c).

As always, licensees must ensure that buyers understand the risks of sending a deposit electronically close to the deadline as there can be a delay between when the funds are sent and when the deposit actually is available for deposit in the brokerage’s trust account. Clear communication with clients and careful attention to deposit timing will help avoid unnecessary disputes and protect all parties in the transaction.
 
If either buyer or seller are disputing that the deposit was not received on time, they are to be referred to their legal counsel.

 Return of Deposits

The release of trust funds is subject to the Commission By-law and outlined in clause 1 of the Agreement of Purchase and Sale. The current version of clause 1.2 states:

"It is understood and agreed that if the Buyer does not complete this Agreementin accordance with the terms thereof, the Buyer shall forfeit the deposit, in addition to any other claim which the Seller may have against the Buyer for the Buyer’s failure to complete. If the deposit is being returned to the Buyer, in accordance with the terms of this Agreement, it shall be done without interest or penalty (unless otherwise specified). The release of the deposit from the brokerage trust account is subject to NSREC By-laws."

Effective May 1, 2026, clause 1.2 will be updated to reference the exact by-law applicable to the return of deposits: by-law 611 (Transactions That Fail to Complete):

"It is understood and agreed that if the Buyer does not complete this Agreementin accordance with the terms thereof, the Buyer shall forfeit the deposit, in addition to any other claim which the Seller may have against the Buyer for the Buyer’s failure to complete. If the deposit is being returned to the Buyer, in accordance with the terms of this Agreement, it shall be done without interest or penalty (unless otherwise specified). The release of the deposit from the brokerage trust account is subject to NSREC By-law 611:

a) At the time a transaction fails to complete, the broker holding the trust funds must advise the parties to the transaction that the brokerage is obligated to hold the trust funds in the trust account until:

i) the parties to the transaction agree, in writing, as to how the money is to be disbursed; or

ii) the brokerage is ordered, by a court of competent jurisdiction, to disburse the trust funds in a specified manner."

To summarize, regardless of whether the funds are being disputed, trust funds can only be released from a brokerage’s trust account with written mutual release from both parties or their respective lawyers. If the deposit is being disputed and one party or their lawyer will not provide written consent, the other party can apply to court of proper jurisdiction for release of funds where a judge or adjudicator can decide to whom funds will be released to. If an adjudicator decides to release the funds to one party, their decision will then allow the broker holding the funds to release the funds to the claiming party. If there is no written mutual release or court order, the broker is unable to return the funds.

The methods by which the deposit can be disbursed are documented in the Commission's Brokerage Transaction and Trust Account Policy.