Practice and liability
Commingling
Mixing client funds with the brokerage’s or the licensee’s own money
Depositing an earnest money check into the firm’s operating account is commingling even if not a cent is spent and the money is available in full at closing. The violation is the mixing itself, because it destroys the separation that protects the client.
How the exam asks about it
Distinguish from conversion, which is actually using the money. Commingling is the lesser offense and it is still a violation.
Related terms
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