The Weekend Deposit and the "Just Admin" Assistant
A $25,000 deposit cheque on a $480,000 house sale arrives at the brokerage on Friday at 4:10 p.m. The broker's office administrator, who is unlicensed, deposits it into the brokerage's general operating account "just for the weekend" because the trust account reconciliation is not finished. On Monday the deal's financing condition is waived; on Wednesday the buyer walks away and the seller demands the deposit. Meanwhile, the same unlicensed administrator has been texting the buyer's agent to negotiate a $10,000 price reduction and has told the buyers they "should probably waive the inspection condition to win." The broker, who was on vacation, says the administrator is "just admin."
1. Was putting the deposit into the operating account acceptable, and what should happen now that the deal has fallen apart?
Read the worked answer
No. The deposit became trust money when the brokerage took possession of it, and it belongs in the brokerage's trust account - not the operating account, and not "held" anywhere else for a weekend. Reconciliation schedules and staff holidays are administrative problems, not exceptions to the trust rules.
Correct handling
- Deposit into the trust account within the timeframe the Rules require (the next banking day is the safe working assumption - verify the current wording).
- Record it in the trust ledger against the specific trade and payer.
- Reconcile monthly, with the broker reviewing and signing off.
Now that the deal collapsed Nothing changes about where the money sits. It stays in trust until entitlement is resolved. A deposit does not become the seller's because financing failed, and it does not return to the buyer because they asked. Release requires written agreement of both parties, a court or arbitration order, or, if they will not agree, an interpleader application. The brokerage does not adjudicate the contract.
The operating-account deposit is a reportable event. The broker must move the funds to trust immediately, reconstruct and document the trail, review whether any other deposits were mishandled, and assess whether self-reporting to RECA is required. "It was only for the weekend" is exactly the defence that does not work.
2. What are the problems with the administrator's text messages, and where does responsibility land?
Read the worked answer
The administrator has crossed from clerical work into licensed activity, twice.
The line An unlicensed assistant may schedule, draft correspondence for a licensee's review, deliver documents, maintain files, and do data entry. An unlicensed assistant may not negotiate terms of a trade, advise a party about a trade, or hold themselves out as able to do so. Negotiating a $10,000 price reduction is negotiating. Telling buyers to waive an inspection condition is advice about a trade - and bad advice, since it strips the buyers of their main protection.
Where responsibility lands On the broker. Supervision of staff and licensees is the broker's legal responsibility; "just admin" is not a defence and "I was on vacation" is worse. The brokerage should:
- Stop the texting immediately and preserve the messages as part of the record.
- Have the licensee who should have owned the file review what was said and correct any misleading statement to the buyers in writing.
- Assess whether the buyers relied on the advice and whether the trade record is accurate.
- Document corrective action, retrain, and expect supervision to be examined at the next audit.
Advice from an unlicensed person does not become lawful because a licensee signs the paperwork afterwards.