The buyer and seller may enter into a written agreement as part of their trade in real estate, designating that interest earned on the trust fund deposit is to accrue to the buyer or seller. This may be significant in cases where the deposit is a substantial amount and held in trust for an extended period of time.
To properly set up this situation, the brokerage in receipt of trust monies transfers the monies from the real estate trust account into a special trust account in favour of the buyer or seller. On maturity of the special trust, the principal amount returns to the real estate trust account. Interest earned is paid directly to the buyer or the seller by the financial institution along with T-5 documentation for income tax purposes. The brokerage may charge an administration fee of up to $50 for costs involved in setting up and collapsing of these special trust agreements.