Trust Cheque Copies: Front and Back Still Required

Recent changes to federal legislation that governs banking in Canada has resulted in some financial institutions not keeping the paper originals of written, cashed cheques. Additionally, when those banks provide copies of negotiated trust account cheques to the account holder, they are, in some cases, only providing a copy of the front of the cheque.

Section 83 of the Real Estate Act Rules states:
A brokerage may receive electronic copies of cheques used to make disbursements from an account in which money is held in trust, only if copies of both the front and the back of the cheque are received and the original cheque is available on request.

The direction in which some financial institutions are moving with regard to copies of trust account cheques does not fulfill the requirements of Rule 83. Industry members must receive a copy of both the front and the back of the cheque, and the original must be available on request from the financial institution.

It is, however, perfectly acceptable for a financial institution to provide an image of the front and back of a trust account cheque on computer CD provided the files cannot be altered in any way.

In some cases, a financial institution may require that an account holder pays a fee to receive an electronic copy of the front and back of a trust fund cheque – and if that is the case, a brokerage that does not wish to change financial institutions will have no choice but to pay the fee.

Should a brokerage encounter a financial institution that does not wish to provide the front and back side of trust cheques under any circumstances or should the financial institution indicate that they are unable to provide the front and back of a trust cheque, that brokerage is encouraged to contact RECA or change financial institutions to one that is willing to provide electronic copies of the front and back of trust fund cheques in order to comply with the Real Estate Act Rules.

 

 

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